💥 Scenario:
A home goes under contract with an active termite bond disclosed on the Property Condition Disclosure Statement.

Approximately two weeks after ratification, the seller cancels the termite bond. The buyer is not provided written notice during the contract period.

After closing, the buyer learns the bond was cancelled mid contract and that no termite coverage was in place through closing. The buyer now faces an unexpected post closing expense to establish new coverage.

🧭 Broker Guidance:
A disclosure reflects conditions at the time it is completed. When a disclosed condition changes during the contract period, that change should be communicated in writing.

If a termite bond matters to the buyer, expectations must be protected in the contract, not assumed. Without a written contingency, cancellation becomes a negotiation issue, not an enforceable obligation.

Silence creates risk.

✅ Action Steps for Agent:

If a termite bond is important, draft a contingency requiring the buyer be able to transfer the bond.

Advise sellers not to cancel disclosed coverage during contract without broker guidance.

If coverage is cancelled, notify all parties in writing immediately.

Address the change by addendum, such as requiring replacement coverage or a credit.

Document confirmation from the pest company showing coverage status and dates.

If a dispute arises, call your BIC before responding.

 

💡 Broker Tip:
Never assume “disclosed” means “protected.”

If your buyer expects a transferable termite bond, write it into the contract.
No language = no leverage.