Loss by Fire Before Closing

Expert, localized Los Angeles answers provided by Heather Roy

Fire Before Closing
	I'm buying a piece of property which has a building on it that has rentalable value. I've given hard money already. I'm tearing down the building to build condo's and retail - hopefully break ground in 18 months. A fire pretty much destroyed the building last week. Who should be compensated? What if I can't get a construction loan and I'm stuck w/ just dirt - and not the original building. Point is - if I had the original building I could earn income. It seems ethically right to replace what was originally in the contract - right? The owner will get insurance for everything else other than the building - which I feel I should be intitled to? Any thoughts or ideas?

	Have you read your purchase and sale contract carefully? Standard forms usually include a provision about what happens if there's a loss by fire before closing. It's time for you to contact a lawyer, preferably one who specializes in real estate, to find out exactly where you stand.
	Edith Originally published on June 22, 2007

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