Buying a Fire Damaged House

When buying a fire damaged house make sure your contract for purchase does not allow the seller access to the home after the closing and settlement.

By Ilyce Glink and Samuel J. Tamkin

Q: I bought a house after a fire. The sale was “as is.” After closing, the seller filed an emergency motion to access the house. She requested access two times up to two weeks after her move out from the home. The house’s roof is half collapsed. The home is not safe. I asked the seller to sign a waiver of damages, but the seller refused. How do I handle this situation?

A: You have an interesting situation on your hands after buying a fire damaged house. Normally, when you buy a fire damaged house, the home is yours at closing. When you sign papers and delivery your money, you’re the owner of the home.

Role of the settlement when closing on a home

The whole purpose of the closing is to give you ownership and possession of the home. In certain circumstances, the seller might negotiate for a post-closing possession of the home, but that’s normally when the seller needs or wants to stay in the home for a certain period of time after the sale.

So, unless you negotiated some right to allow the seller to remain in the property, we’re not quite sure why the former owner is trespassing through your property. Frequently, when a rental apartment goes through a fire, the landlord immediately terminates the lease and the tenant might need to get into the damaged unit to gather whatever belongings can be salvaged.

Terms of the Contract can control after closing

We assume your situation is different. When you purchased the home, we would think that the purchase contract conveyed the home and its contents to you as they were on the day of the sale. This would mean that whatever was left behind would now be yours. We don’t think it is fair of the seller to sell the home to you in its “as is” condition and then pick and choose what the seller wants from the home after closing.

If you closed the deal with a real estate attorney, talk to the attorney to figure out what’s going on. You need to understand more about what rights you have under the purchase and sale agreement for the home. What, if any, rights you gave to the seller to remove anything from the property.

The real question is why didn’t the seller come to you and ask permission to recover some personal items? We’re sure you’d have been fine with giving the seller access to remove those items. We think it’s strange that the seller filed an emergency motion to get into the home and think this indicates that the seller knew that he shouldn’t be going back to the home but could if he convinced a judge to give him access.

Did you participate in that motion? If you didn’t, you might have a legal right to go after the seller. Not sure it’s worth your time and treasure. It would depend on what you thought the seller took out of the home or if he caused any further damage. If you used an attorney to close on the home, that should be your next call. If not, you may want to find one and ask some questions.

The seller is taking advantage of you and the situation. From where we sit, that isn’t fair. Either the seller sold the property to you with everything that was in it or not. If he did, he shouldn’t get access. If he did, you need to know what rights he has and for how long.

With the property in such poor shape, consider securing the site, and figuring out whether your next step is to restore the home or tear it down.

By the way, we think the waiver of liability issue is a red herring. While it would be good to have a waiver, you should have insurance to cover you in case something happens at the property. In any case, keeping the seller (and anyone else) out of your property is your best bet when buying a fire damaged house.