Читать книгу Property Management Kit For Dummies - Robert S. Griswold - Страница 74

Before you close escrow, take a final walk-through to make sure that the property hasn’t been damaged before closing. I was an expert witness in a case in which the new buyers learned this lesson the hard way because they didn’t visit the rental home before closing.

When the sale was complete, the new buyers excitedly went to see their new property, which had sat vacant for nearly a week during escrow. They were shocked to find the home flooded and severely contaminated with mold. The buyers sued the seller, claiming that someone had intentionally or inadvertently left the water supply line valve to the refrigerator’s icemaker open, allowing water to cover the entire first floor. The buyers were unable to prove that the damage occurred while the seller still owned the property, so the seller’s insurance company denied the claim.

Ultimately, the buyers’ insurance company agreed to pay for some of the damage, but not before the buyers went through more than two years of expensive and emotionally draining litigation; they also lost rent because the property sat vacant the entire time. The buyers could have avoided this mess if they had inspected the property just before the close of escrow and stopped the sale until the damage was addressed.

Although you may trust your insurance agent implicitly, don’t allow your escrow to close until you have written documentation confirming that your insurance coverage is in force. A property can suffer a catastrophic loss or liability claim hours after it changes hands, before the new owner’s insurance coverage is in place. The previous owner’s policy automatically ended upon the sale, so you need to make sure that there is no gap in coverage, even if you have your new policy start slightly before the day you close escrow. It’s better to have overlapping coverage for a couple of days than to discover that you had no coverage when the tornado or hurricane came down your street.