To: HagenLawFL.com visitors
Re: Top 8 Contract Issues for Hurricane-damaged Properties
Here is a synopsis of key contract considerations for sellers and buyers of hurricane-damaged homes:
- Insist upon inspections: they protect both parties. Discourage sight unseen offers;
- Seller Disclosures: carefully scrutinize for accuracy and err on the side of disclosure. In FL a seller must disclose any material facts not readily observable, for example, the home flooded and has been repaired;
- Special assessments: pay close attention to who will be responsible post-closing;
- Use the NABOR Hurricane Ian disclosure;
- Encourage the use of Buyer/Seller attorney approval addendum so the party has an “out” if the contract is not approved by the attorney post-signing;
- Beware of potential “boilerplate brouhahas” in the As-Is Contract, especially Standard L. Access as to utilities availability for inspections and Lines 197-8 “Insurance Claims”. Strike and initial as appropriate;
- 50% Rule issues: if base floor elevation is below the current flood elevation & there is heavy damage, renovating without elevating may be problematic. See Leepa.org for building-only values used in calculating 50%. Use a longer Contract inspection period, have the buyer consult with a contractor and consider an explicit contract disclaimer;
- Insurance may be unavailable and financing may be difficult to obtain: a “cash buyers only” listing may be advisable.
Hagen Law Firm is available by consultation to meet with sellers or buyers (including FSBOs) and to represent them throughout the entire sale and purchase process.
Michael S. Hagen, Attorney