Navigating the CL-100 Wood Infestation Report Contingency in SC Real Estate Deals

South Carolina's warm, humid climate makes it a paradise for homeowners-and an absolute breeding ground for subterranean termites and wood-destroying fungi. In coastal areas like Myrtle Beach, Charleston, and Hilton Head, termites cause more structural damage to residential properties each year than fires and storms combined. Because of this constant threat, virtually every mortgage lender and closing attorney in the state requires a specialized inspection before a real estate deal can close.

This mandatory document is officially known as the CL-100 Wood Infestation Report, commonly referred to as a 'termite letter.' However, calling it a simple termite letter is misleading. A CL-100 inspection also checks for wood-destroying beetles, active decay fungi, and elevated moisture readings in the crawlspace. A 'dirty' CL-100 report gained just days before closing can bring a real estate transaction to a screeching halt, sparking fierce legal battles over who has to pay thousands of dollars in structural repairs.

This guide explains the strict regulatory rules governing CL-100 reports in South Carolina, who bears the financial burden of treatments, and when a buyer can legally walk away from a home with a failed inspection.

Step-by-Step Process for Handling the CL-100 Contingency

Navigating the CL-100 process requires strict adherence to contract timelines. Whether you are buying a historic home in Beaufort or a suburban house in Spartanburg, follow these steps to protect your investment.

Step 1: Schedule the Inspection Within the 30-Day Window

Under the S.C. Code Ann. § 46-13-10 and state regulations enforced by the Clemson University Department of Pesticide Regulation, Pendleton, an official CL-100 report is strictly valid for 30 days only. Do not order the inspection the day you go under contract if your closing is 45 days away, or you will have to pay for a second inspection before closing.

Step 2: Review the Official Form CL-100 Findings

A licensed pest control operator will inspect the accessible areas of the home and issue Form CL-100, South Carolina, Department of Pesticide Regulation, Official South Carolina Wood Infestation Report. Review the bottom of the form carefully to see if the inspector checked the box indicating visible evidence of active infestation, prior structural damage, or wood moisture content of 28% or higher below the first main floor.

Step 3: Submit Repair Requests Under the Contract

If the report is not clear, the buyer's agent must formally submit the failed CL-100 to the seller along with any required contractual notices, such as Form 525, South Carolina, Association of Realtors, Repair Addendum, before the contract's wood infestation contingency deadline expires.

Step 4: Seller Completes Treatment and Structural Repairs

To deliver a 'clear' report, two different professionals are often needed. A licensed pest control company must chemically treat active insects or fungi, while a licensed general contractor must evaluate and repair any rotted or termite-damaged floor joists and subflooring.

Step 5: Obtain a Clean Re-Inspection Letter for Closing

Once repairs and treatments are finished, the pest inspector returns to the property to verify the work and issue an updated, clean CL-100 letter (or an official clearance letter from the contractor), which is sent directly to the closing attorney and mortgage underwriter.

Who Pays for Termite Treatments in SC?

In South Carolina, who pays for the initial inspection versus who pays for the treatment depends on the purchase contract and the type of mortgage loan. In a standard transaction using the state Realtor contract (Form 310, South Carolina, Association of Realtors, Agreement to Buy and Sell Real Estate), the buyer typically pays for the cost of ordering the initial CL-100 inspection report so that the inspector is working strictly for the buyer's best interest.

However, if that inspection uncovers active termites, wood-destroying beetles, or elevated crawlspace moisture that requires remediation, the contract generally obligates the seller to pay for the chemical treatment and structural repairs needed to produce a clear report. If the seller refuses to pay because the repairs are too expensive, the contract outlines specific walk-away rights for the buyer.

Lender Requirements for FHA and VA Loans

If you are using a government-backed mortgage, the CL-100 rules are inflexible. For VA loans, the Department of Veterans Affairs mandates a 100% clear CL-100 Wood Infestation Report on virtually all South Carolina properties. Under traditional VA rules, the veteran buyer was prohibited from paying for the inspection, though recent regulatory updates allow buyers to pay in certain negotiated circumstances; nevertheless, any active infestation or structural rot must be completely eradicated and repaired prior to closing before the VA lender will fund the loan.

For FHA loans and conventional mortgages, lenders will universally freeze the loan if the closing attorney or appraiser sees a CL-100 indicating active termites, fungi, or structural instability. Underwriters will not approve a mortgage on a house that is actively being eaten by insects or rotting from crawlspace moisture.

Can a Buyer Walk Away Over a Failed CL-100?

Yes, provided the contract is drafted properly and deadlines are met. Under the standard South Carolina Wood Infestation Report contingency, if the CL-100 reveals active infestation or damage and the seller notifies the buyer that they refuse to treat the pests or repair the wood damage, the buyer has the legal right to terminate the contract and receive a full refund of their earnest money deposit.

What if the buyer decides to close anyway without forcing the seller to fix the moisture or rot? That is a massive legal trap. In McLaughlin v. Williams, 379 S.C. 451 (SC Court of Appeals 2008), a buyer closed on a South Carolina home after receiving a CL-100 that clearly warned of wood-destroying fungi and moisture levels of 28% or more. When the buyer later sued the seller for fraud over hidden water intrusion, the court ruled against the buyer, holding that a purchaser cannot reasonably rely on a seller's clean disclosure statement when they are handed a CL-100 report warning them of the exact problem before closing. If a seller actively hides termite damage with fresh paint or fake repair invoices, however, you can sue them for fraud under S.C. Code Ann. § 27-50-40 in a venue like the Horry County Court of Common Pleas, Conway.

How Much Do CL-100 Inspections and Repairs Cost in South Carolina?

Costs vary drastically depending on whether the inspector finds a clean crawlspace or decades of hidden moisture damage:

• CL-100 Inspection Report Fee: Typically costs between $100 and $200.
• Re-Inspection Fee: If repairs are required, having the pest company return to issue a new clear letter costs $50 to $100.
• Liquid or Bait Termite Treatment: Treating an average-sized South Carolina home for active subterranean termites costs $800 to $2,500, depending on linear footage.
• Crawlspace Fungus & Moisture Remediation: Installing a vapor barrier, dehumidifier, and fungicide treatment typically ranges from $1,500 to $5,000.
• Structural Wood Repairs: Sistering or replacing rotted floor joists and sill plates can easily cost $2,000 to $15,000+.

Timeline Rules for the CL-100

Under S.C. Code Regs. § 27-1085, a CL-100 report expires exactly 30 calendar days after the date of inspection. If your closing is delayed by even two days and pushes past that 30-day mark, your mortgage lender will reject the expired report, and you will be forced to pay for a brand-new inspection before the closing attorney can disburse funds.

Frequently Asked Questions (FAQ)