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My wife and I just bought a house in Huntsville, AL.
This is not our first house - so I've been down this path before, but not with these results.
Prior to putting an offer on the table on the house we were interested in, I researched to find out what termite company had a bond on the house. I spoke to their local representative, who told me that the contract was transferable, with no cost to transfer. We'd only have to pay the yearly fee (less than $200) for their protection service, which included treatment of the house to prevent termites, and full repairs should those treatments still yield termites. I was told to contact them if/when we bought the house to get that policy transferred.
After making an offer and having it accepted, we are now happy residents of that home. As suggested, I contacted the company (that is a national pest control company) and one of their agents came out to complete the paper work.
Upon arrival, he took out a stack of papers and told me that the policy is transferable, but...
He said that the previous owners of the house had the house bonded with another company, and that bond had been taken over by his company, when his company (Company B) bought out Company A.
He informed me that we needed a new bond (certainly not a transfer) and the cost of that would be well over $1000.00 (a thousand dollars). I was furious, to say the least. He talked about all kinds of ways to pay for it in installments, that the yearly rate would stay the same, but a new bond was needed.
He gave me a lengthy explanation that he understood upset me, tried explaining that this only happened because the previous owners had a contract with another company, blah, blah, blah...
At first I said I understood (I didn't sign ANYTHING) - and he proceeded to go to his car and get a device to measure the dimensions of the house, and he'd be back.
It was a cold day in Huntsville, that day, (in the high 20's) and as he started taking the measurements, I got to thinking more about this, and the hotter I got... I let him freeze while he took all the measurements, and when he came back to the door to come in to sign the contract, I read him the riot act.
I explained that after careful consideration, I don't do business with companies that lie to me, and that his company lied to me. I expected to have the contract transferred as explained to me, and that his 'discounted' offer wasn't good to me. I said that if he wanted me as a 'valued customer' he'd have to earn it by honoring what he told me, a cost free transfer of the policy.
Here's my question - do I have any legal way to force his company to do as they told me they would do - provide the same coverage without incurring the cost of having another bond issued?
I welcome your replies and hope some of you are lawyers and can answer that legally.
The thing is they got you over a barrel- you pay and they'll protect. If you don't pay they don't protect- and you'll be searching for another company and be paying for another full treatment and bond.
Another way to look at it- they DON'T HAVE TO PROTECT YOU IF THEY DON'T WANT TOO! At least according to your description of the event(s) that took place.
You say you spoke to a rep then an agent came out. Could it be the agent is an independent sales person versus an employee of the company? I would start back with the rep if possible and or a manager with the company.
Here's how it works in Texas and yes, most States are different across the south. The company has the option to offer you a transfer of warranty or not. I'm not aware of any that will transfer a warranty that doesn't cost near the price of a retreat. The $1000.00 is about what a treatment costs here for the average size home. Chemical costs are about $125.00, labor about $350.00, the rest is gravy. Yes, termite work is VERY profitable and due to regulations, is fairly hard to get into. In Texas, you cannot respray chemical unless you've found active termites. The chemical is considered a ground pollutant. Most will do not more than set out baits in the yard in hopes that the termites will go to those first before going to the house. If found at the baits they are allowed to spray the surrounding area, not retreat the entire home.
As I see it, if you know the home has had a FULL treatment, meaning all penetrations have been treated which would include under kitchen sinks, behind tubs, etc, I wouldn't even suggest ever renewing the service. The hard places have been done, YOU can protect your home every year by buying a termiticide at any feed store and spraying it yourself. All you need is a hose end sprayer. Besides termites, you won't have the need for any bug service either as there won't be any. Termiticides work great on ants, roaches, and insects. It would cost you about 30 minutes of your time to spray the foundation until the ground is wet with solution and about $30,00 of chemical. You need only to do it once a year in the spring when the first rains start. That's when termites swarm. If you want to respray the penetrations like under sinks, tubs, etc, you can buy Tim-Bor online and it's not expensive. A packet will make one gallon of solution and a gallon goes a long way in treating penetrations. https://www.google.com/?gws_rd=ssl#q=timbor+termite
FWIW, in your State you have three types of termites, drywood and subterranean which are easy to control as stated above. They must return to the ground every day for water. But you also have Formosan termites. Those require the house to be bagged and most will use a chemical that takes 100% of the oxygen out of the air in the house. The house sits for 24 hours bagged with a guard to insure nobody enters the house. If you ever get those, no renewal is going to help as nobody can protect your house from those and is excluded from any warranty.
This isn't so much a legal matter as a confusion based upon false assumptions.
When a company buys another company, it commonly takes on the debts and liabilities and has to maintain existing contracts. For instance, if you have a house that you rent out and decide to sell it, the new owner cannot take occupancy until your lease with any current renter concludes according to the lease contract terms. The lessee could sue for damages if he tried.
Your argument is actually not with the current company that is bugging you, but with the terms of the sale. If your sales contract had read "subject to no cost assumption of termite bond" you could go back on the seller and agent to recover the costs. Since the original owner is the party to the contract with the termite company, the damage from lack of fulfillment of contract terms has happened to HIM, not you. You are only a third party and never signed any contract with the company.
If you were to attempt to pursue any legal remedy, you would go after the seller, who would go after the termite company for refusing to honor the contract. Unless that company had done an "assets only" purchase of the original company, my guess is that he would prevail.
If it were me, here is what I would do:
Get a certified copy of the original termite contract.
Examine the sales documentation for a phrase similar to what I described. If there, I would follow up on that.
If there was no phrase like that, I would contact the Board of Realtors and the realtors involved in the sale and make them aware of the flaw so that no one else got dinged.
I would re-contact the termite company and let them know what I had just done and that I was prepared to go public and cost them MORE money if they didn't honor that contract. I would then approach an attorney to explore a class-action suit against the company. No threats, no coercion, just logical follow-up with minimal effort on my part.
If the original company rep you spoke to didn't know that the original contract was with Company A, then they are not responsible for giving your an incorrect answer based on incorrect information. You may not have known yourself at the time that Company B didn't issue the original bond, but that doesn't mean they are liable for your lack of knowledge when their answer was based on that lack of knowledge. I am assuming you asked a general question about "what happens if I buy a home that has bond from Company B?" and you didn't get into specifics and they were not looking up details on that particular property.
As far as their actual responsibility, it would depend not on your sales contract but on the contract the original owner had with Company A, and their rights if the company was sold or transferred. Another relevant factor would be the contract between Company A and Company B and what rights and responsibilities were assigned under it.
You could get an attorney to look into all of this for you, but it's going to cost you more than the $1000.
If the original company rep you spoke to didn't know that the original contract was with Company A, then they are not responsible for giving your an incorrect answer based on incorrect information. You may not have known yourself at the time that Company B didn't issue the original bond, but that doesn't mean they are liable for your lack of knowledge when their answer was based on that lack of knowledge. I am assuming you asked a general question about "what happens if I buy a home that has bond from Company B?" and you didn't get into specifics and they were not looking up details on that particular property.
As far as their actual responsibility, it would depend not on your sales contract but on the contract the original owner had with Company A, and their rights if the company was sold or transferred. Another relevant factor would be the contract between Company A and Company B and what rights and responsibilities were assigned under it.
You could get an attorney to look into all of this for you, but it's going to cost you more than the $1000.
Sound advice.
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