Arizona Real Estate Notebook

by Phoenix attorney Christopher A. Combs, partner with Combs Law Group, P.C.

Question: Last year I purchased a townhouse in Scottsdale. The seller had only owned the townhouse for three months and had never even lived in the townhouse. The termite inspection report that I had done showed that there was no evidence of current or past termite infestation. After closing, I had the walls in my townhouse re-painted, and last week I saw evidence of new termites coming through one of the freshly painted walls. I contacted the termite company that did the termite inspection report to treat this new termite condition. When they treated the wall, they also pulled up the carpeting and found evidence of prior treatment for termites. The termite inspection company has been very nice and has agreed to treat my termite problem at no charge. I intend to sell my townhouse in the next three years, however, and because I know that I will have to disclose this termite problem to potential buyers, I am concerned about loss of value of the townhouse. Will I lose value when I sell my townhouse? If so, do I have a claim against the seller?

Answer: First, you need to determine whether the termite company can successfully treat your new termite problem. If you then have no evidence of any new termite problem in the next three years, a potential buyer should have some assurance that the termite problem has been successfully treated. Second, when you sell your townhouse you can purchase for the buyer a termite warranty which would require the termite company to treat at no charge any termite problem. The result should be that, if there is no evidence of termites in the next two or three years, and a termite warranty is purchased, any loss in value should be minimal. Remember, in Arizona the expression is that a home “either has termites or will get termites!”. Finally, if the seller only owned the townhouse for three months and never lived in it, a claim against the seller for non-disclosure would be difficult to prove. [emphasis added]