Assuming you're working with a Realtor, you really need to pose this question to him/her to get the proper answer. As the others have noted, the standard California Association of Realtors (CAR) contract, which is the one that most of us use UNLESS another is requested by the listing agent, seller, or the bank (if a foreclosure home), is as "as is" contract, meaning that you are buying the home as it is, in its present condition as represented to you by the seller.
Now, things can change a little, if you did not know that these condition existed. For example, if you were not provided with inspection reports for the home, and you hired the termite company to find problem areas and then were told about the dry-rot problems. In this case, the facts are new and unknown to you at the time the purchase contract was made. As a result, you might be able to negotiate who pays for these repairs. Again, speak to your Realtor regarding what steps to take regarding the repairs.
On the off-chance that this home is a condominium and not a single family detached home, the homeowners association rather than the home buyer or seller is responsible for repairs of the exterior of the home. This particular maintenance responsibility is applicable ONLY to condominiums and not to attached homes that are considered "planned developments" because only a condominium association owns the buildings.
So, in the end, trust your agent to offer you the best advice on what to do next. Remember, you can always ask that the seller pay for certain items, but there is absolutely no guarantee that the seller will comply. And if your real estate market is as impacted as ours, there may certainly be another buyer willing to "step into" your shoes and buy the home even with the outstanding dry-rot repairs.
Allison James Estates & Homes