When a storm hits AFTER you have signed a purchase agreement!

A tree fell on the home I was about to buy!When thunder storms have swept through the Minneapolis / St. Paul area, several of our clients have asked about what that means regarding their new home. An event of any magnitude could bring about substantial damage including hail, flooding, or even straight-line winds blowing a tree over and onto the roof. Obviously, you take a good look at the home during your showing or perhaps a 2nd showing. Then you get the 3-hour hand-held tour of a trained home inspector to point out the good, the bad, and sometimes the ugly of what you are about to call home.

Then comes the waiting game, you have to line-up your appraisal, mortgage, and title work in order to have closing. What happens during this 20 to 30-or-more day period when the seller still lives there and you are not able to call it a done deal quite yet? I mean… something could happen, even with no storm. A toilet overflows, the plumbing breaks and floods the basement over a weekend, or an electrical short occurs and starts a fire damaging the garage and part of the attic.

There is a part in the standard Minnesota Purchase Agreement on line 149 – 154 of page 4. The line is called “Risk of loss” and we will always make a point to share this when helping you make an offer. It starts: “If there is any loss or damage to the property between the date hereof and the date of closing, for any reason, including fire, vandalism, flood, earthquake or act of God, the risk of loss shall be on the seller.”

What happens when a storm damages my new home?.pdf
It goes on to discuss substantial damage and potential cancellation of the purchase agreement at the buyer’s option. Key word is “substantial”… a stain in the carpet may not be substantial.. a tree falling on the roof, of course, is. At least, in my opinion, any potential remedy includes the seller fixing, the seller’s insurance company fixing, and even the buyer’s acceptance of any damage occurring before closing. After the big day, well… that’s another story!