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After completing all of the paperwork on the purchase or sale of a property a battery of people move into action. Two of the most important activities are the insurance inspection and the survey. Both of these activities are performed by different people and are generally completed the week prior to closing. Recent transactions alerted me to a need for both buyers and sellers to request that these activities be performed as soon as possible after all the pertinent contracts documents are signed by all parties.
Many insurance companies have endured massive losses due to hail, hurricanes and flooding in recent years. One company in particular has endured more loses than others and has initiated a restrictive policy based on their economic model relative to roofing (materials, conditions and installations.) I live in a subdivision of one hundred and thirty-five homes where every roof was replaced due to a hail storm in 1992.
In the transaction I mentioned earlier, it was discovered that the roof was installed eleven years ago without felt underlayment. The building code where the property is located clearly states that the roof was installed correctly and that felt underlayment was not required. However, the insurance inspector informed the buyer that the roof was uninsurable and advised my client (the buyer) to seek a way out of the contract. The seller elected to call another insurance agent to inquire as to the insurability of his roof. The seller's agent assured all parties that the roof was not only insurable but in sound condition. Fortunately these discrepancies were discovered nearly a month prior to closing and to date the transaction is back on course.
In another recent transaction an encroachment was discovered by a survey crew 24 hours prior to closing. The encroachment was a power easement that encroached on the apron of an in ground pool. As it turned out the title company agreed to insure the buyer for "forced removal" and the parties agreed to proceed .
The message here is that if it can happen it will. I urge both buyers and sellers to get all the t's crossed and i's dotted as early as possible.
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