Property Damage from Natural Disasters Prior to Closing
UPDATED: August 14, 2013
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In most states, if your contract does not specify who bears the risk of damage to the property from disasters like fire, hail, flood, or wind, the risk of loss is on the seller. In other words, if the building is damaged by fire before the closing, the buyer can cancel the purchase unless the seller restores the building to its prior condition. However, you and the seller can tailor the contract to contain a risk of loss provision which meets both your needs and wishes. Then, if there is a later legal dispute, a judge or arbitrator will make every effort to carry out the intentions of the parties as stated in the contract.