Bronchick, L/O, Insurance, and the Due-On-Sale-Clause - Posted by Emmett-NC

Posted by Stacy (AZ) on May 20, 1999 at 15:31:47:

Here’s a repost of Bronchick’s answer to a question on the “Legal Forum”. If your property is in a land trust
it seems to answer your question.

Question by Mike Acord:

If I take title in a Land Trust do I have to double insure the property if I’m trying to avoid due on sale issues or is there an easier way?

Answer By William Bronchick:

Once you transfer title to the trust, you should have the insurance company name the trustee as the new insured. If you change beneficiaries, the title is still in the name of the trustee, so no further change is necessary.

CAVEAT: I hear that Flordia insurance companies are giving homeowners a hard time about this because they feel that the trustee has no legal claim to the property. This is simply not true, but it can create a practical problem. I recommend never using the words “land trust” when speaking to the “unenlightened.” Simply call it a “living trust.”

Bronchick, L/O, Insurance, and the Due-On-Sale-Clause - Posted by Emmett-NC

Posted by Emmett-NC on May 19, 1999 at 21:19:19:

I am new to RE Investing, and I have a question based on the posts to this board. I recall in Bronchick’s two part series about Dancing around the Due-On-Sale Clause, that one of the ways a lender will find out about it is if you are put as a beneficiary of the home insurance policy, since all beneficiaries receive copies of the policy. BUT…In Bronchick’s Legal Form for L/O it says that the seller must put you as a beneficiary on the insurance policy. He even has recommended it on posts to this board and on his LegalWiz board. Is there something I am missing as to why it is on the form, and he recommends it too? Won’t that violate the due-on-sale clause? Thanks in advance for your guidance!