You will get the mine and they will get the shaft. - Posted by Dr. Craig Whisler CA NV
Posted by Dr. Craig Whisler CA NV on September 14, 2003 at 11:45:39:
You can do neither. Unless your contract specifically states that buyers are to maintain insurance and what you can do if they let it lapse, all you can due is grin and bear it. In a bilateral contract you have only the rights specified therein, unless both parties consent to modifications. You cannot buy insurance and add it to the end of the contract without the buyer’s permission. You cannot force them to sign a new note with tougher terms, though they may voluntarily do so.
Ask them to do so and as an added inducement tell them that if you have to insure it you will only insure for the remaining amount of the note and you will make YOURSELF the loss payee, not them. If there is a fire, you will get the mine and they will get the shaft. Just say that only by agreeing to an new insurance policy, at their expense, can they protect themselves and the equity that they are building in their new home. Say it is as much for their benefit as it is for yours. Tell them that you are offering to do them a FAVOR, by paying for it yourself now so they will be covered and letting them pay you back later, at the end of the contract. Stress that their monthly payment will not increase.
When you phrase it properly you may be able to get yourself out of this jam. If they agree, just write it up as a short addendem to your original agreement, and have both parties sign it. No need to disturb your original documents. This is the only way that you can add it to the end of your contract.
You have just attended $300 seminar, sponsored by the school of hard knocks. Been there, done that.
A wise man learns from others mistakes, a fool scarcely by his own.
Thanks Philip, for sharing your experiences with us. By doing so you have probably helped many others avoid the same seminar.
Sharing information, to help others, is what this board is all about.