Fire Insurance w/ Lease Option - Posted by Glen SoCal

Posted by John on April 02, 2002 at 02:07:41:

Personally I believe the both would recieve payments - - one as a renter one as a landlord - provided that both took out specific policies for their positions. But the best thing would be to shop around insurace companies and ask - you don’t want a microscopic clause in the 47th page half way down that states “no damages shall be liquidated if said property is insured by another party with a vested interest in the aformentioned property…etc”. I have put a clause that my t/b’ers must get third party and fire insurance - and I kindly offer a phone number of a company where they can get a good deal - the one I use.


Fire Insurance w/ Lease Option - Posted by Glen SoCal

Posted by Glen SoCal on April 02, 2002 at 01:39:53:

I searched the archives and couldn’t isolate my search well enough to answer a question I have about fire insurance and what to do with a Lease/Optioner who would be put out of a property while repairs were completed.

A simple scenario would be that I buy a property on Contract for Deed. I lease/option the property. I purchase a landlord’s fire policy and encourage the L/Oer to get renters insurance.

Now lets say a fire burns the property to the tune of 5 months of confusion until the property is repaired.

The tenant still has the ‘option’ to purchase the property, but in the meantime, would a policy pay for their rent elswhwere as a policy would for an owner while they were dispossesed? Or would the owner get reimbursed for loss of income/rent while awaiting reconstruction and pass that money to the Optioner while they pay for similar habitation elswhere while awaiting repossesion of the property?

Has anyone worded this scenario in a an option agreement?

Any feedback would be appreciated.

Thanks, Glen