Hurricane Aftermath: Who Pays?

Hurricane season is around the corner. If it invites itself to our neck of the woods and you're under contract, things could get tricky. I'll share some suggestions, and if you have any additional questions feel free to write me.

The real estate industry almost always experiences some setbacks, as hurricanes delay transactions, damage houses under contract and halt new construction.

Who pays for repairs depends on the amount of damage that was caused by the hurricane, as per contract.

Risk of Loss: If any portion of the property is damaged by fire or other casualty before closing and can be restored within 45 days from the closing date to substantially the same condition as it was on effective date, seller will, at seller's expense, restore the property and the closing date will be extended accordingly.

If the restoration cannot be completed in time, buyer may accept the property 'as is' with seller assigning the insurance proceeds for the property to buyer at closing, failing which either party may cancel this contract.

Who pays for repairs?

If the property is damaged by a casualty (hurricane, fire or tornado) before closing, the seller will be obligated to repair the property so that it is essentially the same condition as it was-and has the same features it had on the effective date.

If the seller is able to repair the property in time (45 business days), the buyer will be obligated to close. If not, the buyer may decide to take the property "as is" (with the damage from the hurricane) together with the seller's insurance proceeds and close on the closing date.

Under what circumstances can either party cancel the contract before closing?

Either party may cancel the contract if the repairs cannot be completed within 45 business days from the original closing date stated in the contract and the buyer decides not to take the property with insurance proceeds.

What is the legal definition of risk of loss?

Risk or loss is the liability for loss or damage if it occurs. The risk of damage can pass to the buyer when the contract is signed, or the risk of damage could be placed with the seller rather than the buyer.

***If you're thinking about making a move, the best time to get started is now-before the hurricane season.



For professional advise on all aspects of buying or selling real estate, please contact me at-786-287-9272 -email:Richard@RichardRecuset.com

Richard Recuset-Multi-Million Dollar Producer-The Recuset Group