Home Owners Insurance

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SharonZ

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Hello,
I have a question about who should be listed on the Home Owners Insurance Policy.

We are buying a house on a land contract drawn by an attorney. Amongst other rules in the contract it states "buyers must obtain Home Owners Insurance at a minimum of x amount of dollars". We are to deposit our payments into the sellers checking account. Not a problem. Other than depositing the monthly payments, we don't have any ties to this bank. The bank then does an automatic withdrawal for the mortgage payments from the seller's account. The seller has asked us to name the bank on the Home Owners Insurance Policy. Shouldn't it be the seller listed and not the bank on the policy because our obligation is to the seller? She has the loan through the bank. The bank is asking for a copy of the policy.
Thank you,
Sharon
 
SharonZ said:
Hello,
I have a question about who should be listed on the Home Owners Insurance Policy.

We are buying a house on a land contract drawn by an attorney. Amongst other rules in the contract it states "buyers must obtain Home Owners Insurance at a minimum of x amount of dollars". We are to deposit our payments into the sellers checking account. Not a problem. Other than depositing the monthly payments, we don't have any ties to this bank. The bank then does an automatic withdrawal for the mortgage payments from the seller's account. The seller has asked us to name the bank on the Home Owners Insurance Policy. Shouldn't it be the seller listed and not the bank on the policy because our obligation is to the seller? She has the loan through the bank. The bank is asking for a copy of the policy.
Thank you,
Sharon
Click to expand...

If you are "purchasing" a home on a "land contract", legally you are RENTING the home.

As most of these agreements are written, you are simply paying for an option to PURCHASE the property, maybe.

I suggest you discuss this with the lawyer that assisted you in drafting the papers.

I don't have access to them, nor would it be ethical for me to read them.

That said, you must IMMEDIATELY discover just what the documents mean, and just what you are CONTRACTED to perform over these next many years.

Then you might wish to discuss the issue of insuring property of such an arrangement that you claim to entered into with this property with a couple local insurance agents.

Those agents can advise you as to how their respective companies write such policies.

Know this, many insurance companies will write ONLY renter's polices, because often people such as you are legally renters.

I advise friends, relatives, the occasional wannabe client to avoid entering into these so called "land contracts".

They offer buyers little if any protection.

The rule of thumb is, if you can't obtain (for whatever reason) a traditional mortgage, you're better off renting; because that's what most are doing anyway!!!
 
army judge said:
If you are "purchasing" a home on a "land contract", legally you are RENTING the home.

As most of these agreements are written, you are simply paying for an option to PURCHASE the property, maybe.

I suggest you discuss this with the lawyer that assisted you in drafting the papers.

I don't have access to them, nor would it be ethical for me to read them.

That said, you must IMMEDIATELY discover just what the documents mean, and just what you are CONTRACTED to perform over these next many years.

Then you might wish to discuss the issue of insuring property of such an arrangement that you claim to entered into with this property with a couple local insurance agents.

Those agents can advise you as to how their respective companies write such policies.

Know this, many insurance companies will write ONLY renter's polices, because often people such as you are legally renters.

I advise friends, relatives, the occasional wannabe client to avoid entering into these so called "land contracts".

They offer buyers little if any protection.

The rule of thumb is, if you can't obtain (for whatever reason) a traditional mortgage, you're better off renting; because that's what most are doing anyway!!!
Click to expand...

Thank you very much. Your answer opened my eyes to a new way of looking at this. I will contact the lawyer that drew up the papers.
Thank you again,
Sharon
 
I just spoke with the lawyer who drafted the contract. She said that because we are not financially or legally responsible for anything to the bank (the seller is) we do not have to put the bank on the home owner's insurance policy.
All they need is proof that there is insurance that meets the minimum requirement.
If the bank or the seller wanted their name included on the policy it should have been stated in the contract. She also said if the seller wanted to change the contract she cannot do it unless we both agree to sign it. She also told me that the contract does protect the seller if we default in payment only. We are considered to be the owners of the property.
Sharon
 
OP, I wouldn't be worried about the seller being protected, if I were you. If I were the buyer, I'd desire certain protections for myself. For example, what if the seller were to die, get divorced, get sued for certain tortious acts, go bankrupt, fail to pay taxes and the IRS places a lien on his/her holdings, go to prison, become incapacitated, etc... What protects you from any of those things happening?

At a minimum, you need insurance with a significant umbrella policy for all kinds of catastrophes.

What if lightening struck the home and it burned to the ground?

What if a drunken 18 wheeler driver crashed into your home?

What if your neighbor's kid hit a ball through your window, tipping over a lit candle, which ignited a fire on your curtains, and destroyed the home and it's contents? What if a tornado hit? What about a band of terrorist thugs mistaking your home for the mayor's?

I could go on and on, but my point is, your lawyer's main purpose is to protect YOU. Unless you and the seller used the same lawyer, then I'd really be worried. Always get your lawyer, and finally, it isn't what the lawyer says that means anything, it's what the lawyer writes. If it isn't in writing and signed, it was NEVER uttered!

I hope for your sake, you're okay, because you seem lie a decent person, too many of whom get hurt!!!


Sent from my iPad3 using Tapatalk HD
 
army judge said:
OP, I wouldn't be worried about the seller being protected, if I were you. If I were the buyer, I'd desire certain protections for myself. For example, what if the seller were to die, get divorced, get sued for certain tortious acts, go bankrupt, fail to pay taxes and the IRS places a lien on his/her holdings, go to prison, become incapacitated, etc... What protects you from any of those things happening?

At a minimum, you need insurance with a significant umbrella policy for all kinds of catastrophes.

What if lightening struck the home and it burned to the ground?

What if a drunken 18 wheeler driver crashed into your home?

What if your neighbor's kid hit a ball through your window, tipping over a lit candle, which ignited a fire on your curtains, and destroyed the home and it's contents? What if a tornado hit? What about a band of terrorist thugs mistaking your home for the mayor's?

I could go on and on, but my point is, your lawyer's main purpose is to protect YOU. Unless you and the seller used the same lawyer, then I'd really be worried. Always get your lawyer, and finally, it isn't what the lawyer says that means anything, it's what the lawyer writes. If it isn't in writing and signed, it was NEVER uttered!

I hope for your sake, you're okay, because you seem lie a decent person, too many of whom get hurt!!!


Sent from my iPad3 using Tapatalk HD
Click to expand...

First, thank you for the kind words about me!
Right now, we're making some repairs the insurance company asked of us then we'll be sitting down and talking at length with them. The one thing we don't want is to skimp on the insurance. That's why we aren't doing just the minimum. We had mentioned a lot of what you mentioned to the agent. Some you mentioned we didn't think about and will add this in. There were things in the contract that my husband and I didn't agree with, we had them take them out or we were not agreeing to anything. We were the ones with the money so they were quite agreeable. We were hurt once and vowed it would never happen again.
Sharon
 
SharonZ said:
First, thank you for the kind words about me!
Right now, we're making some repairs the insurance company asked of us then we'll be sitting down and talking at length with them. The one thing we don't want is to skimp on the insurance. That's why we aren't doing just the minimum. We had mentioned a lot of what you mentioned to the agent. Some you mentioned we didn't think about and will add this in. There were things in the contract that my husband and I didn't agree with, we had them take them out or we were not agreeing to anything. We were the ones with the money so they were quite agreeable. We were hurt once and vowed it would never happen again.
Sharon
Click to expand...

Good on you, madam. I hate to see good, decent, hard working, law abiding people get hurt.
I won't worry about you folks, you've got your thinking caps on now.
 
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