"After careful consideration, we will not be renewing termite protection plans in your area."
A homeowner in West Mobile received that notice this spring, according to Lagniappe's May 27, 2026 cover story. The homeowner had used Terminix since the house was built, nearly half a century earlier. They renewed every year, had annual inspections, and at least twice filed small damage claims that were repaired. A May 7 email told them their seven-year Dual Defense agreement had "reached the end of its set term" and would not be renewed.
The homeowner wasn't selling their house. For anyone who is, the same shift lands at a worse time. In a Mobile sale, the termite bond has moved from a routine closing document to something buyers negotiate over. The reason is timing. A sale is when a pest-control company is asked to inspect the house and decide whether to take on a new owner, and that decision now often ends with less coverage than the seller thought they had.
Why the bond carries so much weight in a Mobile contract
Two local facts set this up.
The first is the law. The Alabama Real Estate Commission says caveat emptor, or "buyer beware," applies to sales of existing homes. Sellers and their agents generally don't have to volunteer defects unless asked, except for defects that may pose an immediate health or safety risk, and they can't misrepresent conditions when a buyer asks directly. In practice, a buyer protects themselves with inspections and with the paperwork they ask for.
The second is the insect. Alabama's first Formosan subterranean termite detection was at the Port of Mobile in 1984, according to a 2026 study by Auburn-affiliated researchers. The same study says Formosan swarms in Alabama usually happen from April to June. Mobile attorney Henry R. Seawell IV, who works mainly on pest-control cases, told Lagniappe that "Mobile and Baldwin County have the highest concentration of Formosan termites in the United States." He also said Formosans can build nests above ground once they find moisture inside a structure, so a colony can live in walls or ceilings.
Put those together and buyers lean on a termite contract with repair coverage as their backstop. A Mobile agent quoted by Lagniappe said termite coverage is built into most local deals through wood infestation reports and termite contracts, and that when he represents buyers he typically asks sellers for a contract with damage-repair coverage.
What the state report certifies, and what it leaves out
The document every buyer sees is the Official Alabama Wood Infestation Inspection Report, set out in Alabama Administrative Code r. 80-10-9-.18. It records visible, accessible evidence of active or past infestation on the day of the inspection. Inaccessible spaces don't have to be inspected, and the report isn't an assessment of structural damage or a promise that nothing is hidden.
The report does come with a guarantee. If it certifies the house as apparently free of infestation and an infestation turns up within 90 days, the company that issued it has to treat at no charge. That covers treatment only. It doesn't pay for damage, and it ends after 90 days.
The termite contract is what covers the years after closing, so the contract's terms matter far more than the report's.
Two contracts that both get called a "bond"
Under r. 80-10-9-.16, termite work in Alabama needs a written contract before it starts. The contract has to state the term, the renewal fee, the total price, and whether it covers retreatment only or retreatment plus repair of termite damage. Each contract must run at least one year. The rules set no statewide transfer fee and don't make bonds transfer automatically when a house sells. Transfer terms come from the contract itself.
| Retreatment only | Retreatment plus repair | |
|---|---|---|
| If termites come back | The company retreats the structure | The company retreats the structure |
| If termites cause new damage | Repair isn't covered | Repairs covered within the contract's stated limits |
| Damage that existed before the contract | Not covered | Not promised; the contract has to state its limits |
| What buyers usually ask a Mobile seller for | Less often | More often |
The agent Lagniappe quoted described the gap this way: "You might have what's called a service bond, which they'll come out if you have termites, they'll kill and treat for them, but if there's damage there, they're not taking care of it unless you have that damage repair coverage." Most sellers know they have some kind of termite contract, he said, and far fewer know whether it covers repairs.
The sale is when the company takes a second look
This is the change from earlier years. Service and repair bonds have traditionally transferred to new owners. The same agent told Lagniappe he increasingly sees companies treat a sale as an off-ramp to reduce coverage or close the account. "I go in with the belief that it may not transfer," he said.
Here is how he described it playing out:
- The seller asks to transfer the bond to the buyer.
- The company inspects the house before agreeing.
- After that inspection, the company may decline the transfer, offer retreatment-only coverage, or cite old damage, spray foam insulation, fungus or other conditions as reasons to limit coverage.
- If the inspection finds active damage while the house is under contract, the seller can end up mid-deal with no coverage to offer.
Justin McNorton, owner of BOSS Pest Solutions in Theodore, which still offers damage-repair bonds in Mobile and Baldwin counties, described the same pattern from the pest-control side. "We get a lot of calls from sellers because their bonds are not transferring," he told Lagniappe.
Spray foam deserves a mention. Attorney Chris Simmons, who represents homeowners in pest-control cases, told Lagniappe that spray foam insulation can hide termite activity because inspectors can't easily see behind it. A seller who added spray foam for energy savings may find it listed as a reason to limit coverage at transfer.
Why companies are tightening
Lagniappe reported that as of May 1, 2026, Terminix's website showed termite services as unavailable for some Alabama Gulf Coast addresses. A Rentokil Terminix spokesperson, Hannah Bernhard, said the company had adjusted availability for new residential and commercial termite agreements in certain ZIP codes, and that existing customers would keep their full protection and regular inspections under their service terms. The homeowner’s experience shows a contract can still end when its set term runs out. We found no later report through early October 2026 saying whether that ZIP-code policy has changed, so treat any company's availability as something to confirm address by address.
The cost of getting it wrong is large in this market. In March 2026, an American Arbitration Association award ordered Terminix to pay the Archdiocese of Mobile $25,878,087.84, including $8.6 million in punitive damages. The Cathedral-Basilica of the Immaculate Conception accounted for nearly $10 million of the compensatory damages. Terminix said it respected the arbitration process but was disappointed with the result. Seawell told Lagniappe that many new bonds are retreat-only, meaning the company retreats and tries to kill a live infestation but isn't responsible for repairs.
What replacement coverage cost one homeowner this spring
The homeowner's quotes, reported in May 2026, show one Mobile household's options. They aren't market rates. The homeowner had been paying about $300 a year.
- Orkin: $2,495 for initial treatment, then $600 a year with a 10 percent annual increase
- Redd: $875 for initial treatment, then $450 a year
- Arrow: $1,095 for initial treatment after a former-Terminix-customer discount, then $350 a year, with no damage-repair coverage
- Cook's: no initial charge with proof of prior coverage, then $530 a year with damage repair included
Lagniappe calculated that keeping damage-repair coverage at those rates meant a 77 percent increase over the homeowner's previous $300 annual cost. The agent in the story said he has seen repair contracts from about $400 a year to as much as $1,500, often through smaller independent companies that take more work to find.
For a seller, that range matters when negotiating. If the buyer's contract calls for a transferable repair bond and the current company won't transfer one, the seller may be paying to replace it, and the price depends on who will write the policy.
Before you list, and before you sign
Simmons put it simply: "Just because you got a bond doesn't mean it's a repair bond." He added, "Every year it's a new contract," because terms can change at renewal. For sellers, that means pulling the current contract and checking whether it says retreatment only or retreatment plus repair, what the repair limits are, and what the company requires to transfer it. Making that call before the house goes on the market gives you time to line up an alternative. If the original treatment was done under a state waiver, Alabama rules require that the waiver go to the next owner for the guarantee or contract to transfer.
Buyers should write the termite term into the purchase contract itself: which type of coverage, and who pays for transfer or replacement. In one Alabama Supreme Court case, the purchase contract required the seller to transfer the existing bond at the seller's expense, and the pest company then issued a renewal to the buyers. Buyers using a VA loan should know that VA requires wood-destroying insect information statewide in Alabama before it issues the Notice of Value. Seawell told Lagniappe that state rules call for inspecting every reasonably accessible part of the house, including the interior, exterior, attic and crawl space. "So if they're at your house for 10 minutes, they're not doing it right."
Frequently asked questions
Does a clean wood infestation report mean the house has no termite damage? No. The Alabama report covers visible, accessible evidence on the day of the inspection and isn't a structural assessment.
Will my bond transfer automatically when I sell? Alabama rules don't require that. Whether a bond transfers, and on what terms, depends on the contract and on the company's inspection.
When do Formosan termites swarm around Mobile? Usually April to June, according to the 2026 study. WKRG reported in May 2025 that local calls tend to peak around Mother's Day.
This post is general information, not legal advice. If you're planning to sell in Mobile and aren't sure what your termite contract covers, Jessica Jenkins-Nguyen can go over the contract with you before you list, so you know whether it will transfer and what a buyer will likely ask for. Schedule a Free Consultation and bring your current bond paperwork.
