I’m in the process of purchasing a foreclosure with and for my mother. In the “Memorandum of Foreclosure Sale”, bolded and underlined states the following:

“The risk of loss from fire, casualty, condenmation actions, whether or not notice was given posting the property or otherwise, or other causes of loss, and all liabilities of ownership of the property pass to the Buyer upon execution of this Memorandum of Sale.”

My insurance agent balked, but my attorney convinced him that I should have a policy in effect, immediately, prior to closing on the property.

Its an interesting situation – I don’t own this vacant house, have no legal right to occupy or even step foot on the property, but I have liability. There are trees down from the hail storm (high winds in this particular subdivision that day). But wait, it gets worse – there’s an above-ground pool, full of water with no fencing around it. There are neighbor’s kids everywhere.

In the end, my insurance agent wrote a policy with a $5000 deductible, only $100,000 in limit coverage until I own the property, at which time I have to cure some of the issues that are evident and he will rewrite it with appropriate coverage.

Post script: A tree guy analyzed the danger, concluded none, but is the first one on the property – day after we close. The pool managed to find itself a leak, draining it and relieving some worries on my part that a child was in danger. I have no idea how it got those two huge holes, allowing it to drain on its own. Sure was lucky, though.