Do you have termites? Are you protected against damage to your home from termite infestation? | Butler Snow LLP


Allie Gaiter * is a lifelong resident of Louisiana and has owned a modest home in Pierre Part, Louisiana for 20 years. Allie recently noticed damaged wood around her kitchen window and discolored sheets in the adjacent breakfast nook. She calls her good friend and local contractor, Bob Villa *, to investigate and repair damage. Upon closer inspection, Bob realizes that the problems are due to an active termite infestation in Allie’s house. This termite infestation has caused significant damage to the kitchen and breakfast area walls and floors and will cost Allie thousands of dollars to repair.

Allie’s situation is not unusual. South Louisiana is a prime breeding ground for both subterranean dryland termites (Reticulitermes tibialis) and subterranean Formosa termites (Coptotermes formosanus). These termites are among the most destructive urban pests in the United States, causing millions in losses.[1] Most home insurance policies do not cover first grader claims for damage caused by wood-destroying insects.[2] Fortunately, Allie’s house has been covered by a standard termite contract with a local pest control company, Critter-Ritters, LLC * since it was built 20 years ago. Surely Allie’s termite contract will cover the cost of a re-treatment to clear the active infestation and repair the termite damage, right? Maybe.

Termite and other pest control contracts are governed by the Louisiana Department of Agriculture & Forestry under the Louisiana Pesticide Law.[3] The law requires those licensed to treat subterranean termites to enter into a standard written contract with the owner of the property.[4] The contract must be in a form accepted by the Louisiana Structural Pest Control Commission.[5] In fact, the Commission has issued an approved standard contract for the treatment of underground termites (the “Standard Contract”) for use in Louisiana.[6]

Although the standard contract guarantees the work done by the pest control company and covers the cost of post-treatment and damage repair, it contains numerical limits, exclusions, and places certain obligations on the homeowner. The standard contract guarantees treatment or repair for a period of one year with a customer option to extend it annually for up to four years. However, the pest control company reserves the right to change the warranty conditions from a damage repair and aftertreatment guarantee to a pure aftertreatment guarantee if the customer is notified at the time of an annual renewal.[7] In addition, the standard contract does not cover damage caused by the pest control company at the time the work was carried out, “except for damage caused by gross negligence on the part of the company”.[8] The contractual liability of the pest control company for property damage is also based on “the according to La. RS 3: 3367 required insurance limits “(100,000 USD) and must not exceed them.[9] Another limitation of the standard contract is that all claims for damages only have to be resolved through binding arbitration.[10] Damage caused by “air infestation by underground termites without visible ground contact” is also excluded.[11]

In addition to the above limitations and exclusions, the standard contract imposes certain positive obligations on the homeowner. The house owner is obliged to “keep the treated areas free of any factors that contribute to an infestation, such as wood, rubbish, construction timber, direct wood-earth contact or standing water under pillar-like structures”.[12] The homeowner must also notify the pest control company and promptly correct “faulty plumbing, leaks and moisture from drains, condensation or leaks from the roof or otherwise in, on or under the treated areas.”[13] Finally, the house owner must immediately notify the company in writing if the building in question is “structurally altered, altered or changed in any other way, if soil is removed or added around the foundation”.[14] Failure by the homeowner to comply with these attesting commitments may void all warranties and warranties under the Standard Contract.

Back to our earlier question – does Allie’s termite contract with Critter-Ritters cover the cost of repairs and reconditioning? The answer is yes – provided that: (1) Critter-Ritters has not chosen to change Allie’s contract from a damage repair and retreatment guarantee to a retreatment-only guarantee; and (2) Allie’s property damage does not exceed $ 100,000; and (3) the infestation was not caused by aerial infestation by subterranean termites; and (4) Allie kept the treated areas free of contributing factors; and (5) Allie has provided Critter-Ritters with written notice of any structural changes and / or the removal or addition of earth to the foundation of her home. If not, Allie may face lengthy and expensive arbitration over her lawsuit against Critter-Ritters.

* The names in this blog article are fictitious. Any resemblance to real people, living or dead, is coincidental and not intended by the author.

[1] USDA, Agricultural Research Service, Technical Bulletin No. 1917, January 2008.

[2] Couch on Insurance, §153.85 (3rd ed.); see also Davidson v. United Fire & Casualty Co., 576 So.2d 586 (La. App. 4th Cir. 1991).

[3] La. RS 3: 3201 ff.

[4] La.RS 3: 3370

[5] ID card.

[6] You can find a copy of the standard contract online at www2.lsuagcenter.com/lahouse/termites/precsc.jpg

[7] Standard contract, general terms and conditions

[8] Standard Contract, Section 1 – Execution of Work

[9] Standard contract, section 3.e. – Damage

[10] Standard contract, section 3.g. – Damage

[11] Standard contract, section 3.a. – Damage

[12] Standard contract, section 3.c. – Damage

[13] Standard contract, section 3.c. – Damage

[14] Standard contract, section 3.d. – Damage

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