Home sold as is......insurance claim?

Question

I'm not sure if this is the place to post this.  My vacant home is under contract sold as is no contingencies or inspections. After the offer was signed by both parties the buyer who is a builder had his roofing contractor go up on the roof & found hail damage ( no notice to me of the inspection). Buyer contacted me asking to place a claim for the damage & now wants the proceeds of the claim which is to be paid by the insurance in two payments Actual cash value & Recoverable depreciation. There is a clause in the purchase agreement pertaining to casualty loss proceeds will be assigned to the buyer but the damage occurred in July & the purchase agreement was signed in November. Obviously both parties would like the money, so the question is am I obligated to assign the insurance funds to the buyer?

Grant R. · Answer

@Alan Risberg  Thoughts:

1. This is not an as-is purchase if you have responsibilites for either party in the contract for damages occurring prior to the sale process.

2. If you choose to involve insurance, you will want to avoid any liability of insurance fraud and protect yourself. This means using the money yourself for the repairs, and documenting it for both the buyer and the insurance company.

3. If you choose to exit the deal, do so with the assistance of an attorney.

Alan Risberg · Answer

Will I understand your comment & thank you.

The claim was filed after the purchase agreement was signed. No monies have been paid out yet.

The home is in Lake county Indiana

This is the clause in our agreement.

Casualty Loss: Risk of loss by damage or destruction to the Property prior to the closing shall be borne by Seller, including any deductible(s). In the event any damage or destruction is not fully repaired prior to closing, Buyer, at Buyer's option, may either (a) terminate this Agreement with prompt return of earnest money to Buyer or (b) elect to close the transaction, in which event Seller's right to all real property insurance proceeds resulting from such damage or destruction shall be assigned in writing by Seller to Buyer.

I no longer feel I can trust the buyer seeing as he put someone on the roof without notice or permission. Further conversation with the buyer shows the guy is pretty underhanded.

So the question remains is the buyer of an as is property entitled to the soon to be Insurance pay out of either the Actual cash value and or he recoverable depreciation (assuming the work is performed)? The damage occurred in July according to the adjuster the purchase contract was signed in November & the claim was placed in December. Thanks for any assistance.

Will Fraser · Answer

Hi @Alan Risberg, I’d say that you have the obligation to complete the repair work that the funds are paid out for, or assign those to the buyer (for them to complete the work).

To do otherwise would be counter to the use of the insurance funds intended by the policy issuer.