What The Hail? Guidelines On Handling Damage If Your House Is Under Contract.

Published June 16, 2012 by Julie Provenzano

Devin Mott Rambie from Legacy Texas Title passed along some great tips this week after the epic hailstorm on Wednesday night. Whether you are selling or buying or home, here's a helpful guideline to understand each parties' responsibilities and options under the contract. 

1. Protecting against Casualty Loss (Hail, Fire, Tornado, etc) 

a. If casualty loss occurs prior to contract, buyer responsible for discovering loss during Option Period (subject to Seller’s Disclosure if known). 
b. If casualty loss occurs after contract is signed, but prior to closing, TREC Paragraph 14 controls: 
     i. Seller shall restore property to prior condition prior to closing; 
     ii. If Seller unable because it’s beyond Seller’s control (catastrophe, materials unavailable, etc.), Buyer may: 
          1. terminate contract, 
          2. extend time to repair and closing date up to 15 days, or 
          3. accept property with insurance money and deductible credit. 

2. What to do if Casualty Loss occurs after contract is signed prior to closing? 

a. Re-inspect (Paragraph 7.A.) to determine if Property is impacted. Even if outside an option period, seller still has duty under Paragraph 14 to repair casualty repairs (Paragraph 14) 
b. If damaged by casualty loss, take action pursuant to Paragraph 14. If not damaged, ask inspector/roofer to document no damage in writing to ensure Buyer’s insurance won’t try to avoid future damage as preexisting condition. 
c. Don’t close hoping to make post-closing claim on Seller’s insurance. Address the matter before closing. Communicate with insurance company prior to closing and obtain proper documentation to ensure seller’s insurance company is willing to assign claim to buyer (if applicable). Seller’s insurance company does not have privity (legal relationship) with buyer, thus, it is critical to determine insurance company’s position and properly document. 

Laurence Henry
Attorney at Law
LegacyTexas Title

Hail damage