June 17th, 2024 at 1:20 pm
The new insurance contingency will generally give buyers the opportunity to determine the availability of affordable insurance for the property they are purchasing, without risking the loss of their escrow deposit. C.A.R. has also added an “insurance contingency” to its standard-form Notice to Buyer to Perform (NBP), and Contingency Removal (CR-B).
The new insurance contingency addresses the difficulty that homebuyers may currently experience getting property insurance, or affordable property insurance. Aside from properties in a “high” or “very high” fire hazard severity zone, a property may be located in another type of fire hazard zone (e.g., Wildland Fire Area), that makes it difficult for a buyer to get fire insurance. A buyer may also experience difficulty getting other types of insurance as well, such as flood or earthquake insurance.
As a buyer’s agent, you are encouraged to give your buyer C.A.R.’s Buyer Homeowners’ Insurance Advisory (BHIA), which explains the possible issues with getting property insurance. Also make sure that your clients investigate into the availability of insurance early on in their homebuying process.
Stay Tuned Next Week: Next week’s Legal Tip will address the other standard-forms C.A.R. will be releasing the week of June 24, 2024, including the forms that will comply with the upcoming changes to our practice under NAR’s Settlement Agreement.
-Thank You to Nicki Marcellino (La Jolla Manager) for suggesting this week’s legal tip!
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