Buyer Places Own Insurance


Your buyers purchase a vacant home.

On the revisit, the neighbor discloses that he was watching/taking care of the house, but that he’s no longer doing that.

What is the seller’s responsibility when it comes to checking on the house while sold pending and vacant?


If the property is vacant, the insurance company may issue a vacancy permit for 30 days. Then, they might renew and issue a second vacancy permit for another 30 days. After that, it’s too late, so if there is damage, then there is no insurance to cover the loss. Also, there’s nothing in the Agreement of Purchase and Sale to cover the lack of insurance.

The property is placed at the Seller’s risk pending sale. But, this may not be satisfactory to the Buyer. The Seller may have no money!

So, a solution might be to have the Buyer place their own insurance coverage upon the property. They have an “insurable interest” in the property even though they haven’t closed the deal.

Brian Madigan LL.B., Broker

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