Hi jjj,
I see that the grass and the general level of the land at the far corner, beyond the mulching, is above the timber cladding, which would not be your responsibility. How can they exclude that? And to prove it was the mulch they would have to show that this was the point of entry.
Termites can move in quite quickly, and 4 months would be enough for them to build a mud tunnel, but NOT enough for a destructive infestation. A colony is said to be capable of eating about 1 ft of a 2x4 timber in 6 months.
From a building standpoint, any timber house is vulnerable to termites, and if they are about, the main requirement is to inspect the foundations for mud tunnels which go up the stumps (hopefully concrete) and over the metal ant caps.
Australian Standard 3660 says
"Frequency of inspections"
Regular, competent inspections should be carried out at least on an annual basis but more frequent inspections are strongly recommended.
Additional inspections are recommended when bridging or breaching of a barrier may have occurred, such as by home additions, alterations, earthworks or landscaping adjacent to the building. Such routine inspections will not prevent termite attack, but will allow evidence of further termite activity to be detected, provided access to all areas is available and there are no concealed entry points. Early detection will allow remedial treatment to be commenced sooner and damage to be minimised.
Regular inspections will not prevent termite attack, but may help in the detection of termite activity. Early detection will allow remedial treatment to be commenced sooner and damage to be minimised. "
So, in that district they should have been inspecting their property regularly to ward off damage. It seems they are manoeuvering early to try to grab your bond.
Get some advice from the Qld Tenancy Tribunal, and tell them you are doing this
http://www.rta.qld.gov.au/Contact-Us
Street address
Level 23
179 Turbot Street
Brisbane Queensland
Postal address
GPO Box 390
Brisbane QLD 4001
Ph 3046 5400
Cheers