Posted by Natalie-VA on April 22, 2006 at 11:45:37:
Mike,
My decision on this would first depend on how the various agreements addressed this possible scenario (if at all). It would also depend on why the house burned down. If it was no fault of the T/B, I would give him his option money back at a minimum. I might even consider giving him his rent credits if he was paying above market rent. It just seems like the right thing to do.
–Natalie
L/O insurance ?s - Posted by mike
Posted by mike on April 21, 2006 at 19:30:47:
Lets say I L/O a house with my option being 85K. I then L/O it to my t/b for 100K. My t/b pays an option fee of 5k with $150.oo of rent credited to his payoff. He qualifies for a loan and is getting ready to exercise his option when the house burns to the ground. Its insured for 100k so my seller’s bank gets paid off with 15K left. My t/b stands to lose all his option money plus the rent credits. I’m in second place on the mortage so the remainder of the insurance goes to me…what do you do in a situation like this?