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StatMan
USA
9 Posts |
 Posted - 11/24/2003 : 17:42:28
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Here's a current scenario. I'm an interested party in this case.
Seller and Buyer are set to transfer ownership of a house in California on Friday. Seller has homeowners policy in effect with a his insurance company, SIC. Buyer gets homeowners policy lined up with different insurance company, BIC.
On closing day, Seller departs house that is in good condition at 9:00 a.m., headed for escrow office. There, many documents are signed by Buyer and Seller before noon at the escrow company's office. Buyer returns to work and Seller goes out to lunch.
Seller has two days to vacate, written into the deal with Buyer. After lunch, Seller returns to the house and finds it full of water. He attempts cleanup then realizes it's too much to handle and calls SIC at 2:30 p.m., reporting the problem and filing a claim. SIC reads him the stock set of instructions, leading him to shut off water and electricity. Seller dials his realtor's number and tells the answering machine what's going on, then resumes mopping. Realtor receives message at 6:30 p.m., instructs Seller to call SIC back to get somebody out there right away.
Meanwhile, documents get hauled around from escrow company and title company to county courthouse or wherever these deals are recorded.
DryCo, dispatched by SIC but officially "working for" Seller, arrives to begin opening walls, pulling up carpet, and drying. Source of water is discovered as broken upstairs toilet water supply line. (Insert a fallen tree here if you need to make this relevant for cat adjusters.) By Sunday, three out of three bedrooms, one of three bathrooms, kitchen, and the laundry room have walls opened and carpet pulled up.
Adjuster is assigned on Monday.
Realtors focus attention on "time of recording" and on Monday morning learn from the title company the the deal "recorded" at 4:50 p.m.
You work for SIC and you get this case. How do you handle it? Specifically,
1. What do you communicate immediately to Seller? the Buyer?
2. What additional information do you need from Seller and Buyer? What do you do with this info?
3. What's covered? Can you find a way to pay Buyer's loss of use through Seller's policy?
4. Who will make the repairs? (Seller's contractor? Buyer's contractor?) Who cares and why?
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Edited by - StatMan on 11/26/2003 11:13:32 |
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DonP
USA
22 Posts |
Posted - 11/24/2003 : 18:42:33
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What was the time of loss? |
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Amber
USA
23 Posts |
Posted - 11/24/2003 : 19:01:42
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| Loss was discovered at 2:30 pm |
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trader
USA
236 Posts |
Posted - 11/24/2003 : 19:21:57
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| Ownership was transferred from Seller to Buyer at the escrow agent's office when Seller & Buyer signed the papers. Seller's policy was canceled and Buyer's policy was effective at this time. |
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StatMan
USA
9 Posts |
Posted - 11/24/2003 : 19:47:50
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| <reply to DonP deleted, answer rewritten into initial post> |
Edited by - StatMan on 11/26/2003 11:16:16 |
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CCarr
Canada
1200 Posts |
Posted - 11/24/2003 : 20:40:07
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Stats, I can't offer an answer to your Q3 at this point, but I have been working on a time line, and have a few more questions. First, the time line based on provided information;
Prior to closing day Friday November 14th -
(a) "seller has HO policy in effect", with SIC, annual term effective 12.01 AM 05/01/03
(b) "buyer gets HO policy lined up", with BIC, annual term effective 12.01 AM 11/14/03
Closing day Friday Nov 14th (the date of loss)-
9.00 AM - seller stops by house for a "memory walk" through the rooms. No damage visible.
"before noon" - many docs signed at escrow office, buyer returns to work, seller goes out to lunch
between "before noon" and 4.50PM - closing docs move from escrow office and title co to cty court house, or wherever
"after lunch" - seller returns to house, finds it full of water
2.30PM - seller calls SIC, files claim
after 2.30PM - seller calls realtor's number, l/m
4.50PM - transfer of deed is stamped with cty seal, a.k.a. "recorded"
"after 6.00PM" - realtor receives sellers "after 2.30PM" message
6.30PM - seller realtor arrives at house, insisted to (Via phone or in person?) that SIC "representative" (not an adjuster?) have remediation / repair work start NOW
8.00PM - Dryco, hired by SIC arrives, begins remediation and determines cause of water damage
"by Sunday" - extensive remediation / repair is underway by Dryco, which was hired by SIC
Monday - SIC adjuster is assigned Monday, talks to buyer to get 'contact info'. Buyer objects to his policy getting involved. Seller & buyer realtors focused on the "recorded time" of property transfer
So Stats, I don't want to answer your four questions yet, particularly your Q3, although the assigned adjuster for SIC may have "created" an answer already through their actions.
My questions to help me are;
(1) what is the "policy period" of the SIC policy?
(2) what is the "policy period" of the BIC policy?
(3) on the Declaration Page of both of the above policies, as part of the printed wording (not typed in), are both policies effective as of whatever date at 12.01 PM? Or, what is it?
(4) does property law in CA create effective transfer as of the "recorded time" of deed transfer, or at a generic time relative to that "stamped" recorded time?
Good puzzle, but I need more pieces.
By further edit, I have updated the timeline with the additional available information. Also, as per Stats instructions from his response to Q4, effective transfer will be considered as of the "recorded time" of deed transfer. |
Edited by - CCarr on 11/25/2003 12:26:14 |
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Ghostbuster
476 Posts |
Posted - 11/24/2003 : 22:00:22
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When Seller received his check and signed off on closing papers as Buyer was signing his papers, the seller no longer had a legal interest in the property. The house now belongs to the buyer. The Risk is now the concern of the Buyinsco. When the Seller went into the Buyers house at 2:30, it appears he was trespassing. This causes me to wonder if the Seller committed an act of vandalism, or posiibly if the Buyer and Seller are acting together in a fraudulent act to get the house remodeled on the carriers nickel.
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StatMan
USA
9 Posts |
Posted - 11/25/2003 : 00:39:05
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CCarr, your questions repeated and their answers:
(1) what is the "policy period" of the SIC policy?
-- starts roughly six months before this closing day, and Seller has discussed with agent that he's selling and got advice "just let us know when it's sold and we'll process a refund"
(2) what is the "policy period" of the BIC policy?
-- starts on closing day and ends a year later
(3) on the Declaration Page of both of the above policies, as part of the printed wording (not typed in), are both policies effective as of whatever date at 12.01 PM? Or, what is it?
-- it's 12:01 a.m. for both BIC and SIC policies
(4) does property law in CA create effective transfer as of the "recorded time" of deed transfer, or at a generic time relative to that "stamped" recorded time?
-- I don't have a written legal reference yet, but real estate attorney pal says that YES, official deed transfer occurs at time of "recording" which is usually done by a "sale walk thru" at the county office by a title company employee. Behavioral evidence: Both realtors focused on this time and waited anxiously for Monday morning to get the document back from the title company to see what time the deal "recorded".
-- Adjuster talked to Buyer on Monday, gets BIC contact info. Buyer said "But you can't file a claim on my policy, even if it was in effect at the time of the damage. Seller has a contract to provide me a house in good condition, and can't use my policy to restore the house."
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Edited by - StatMan on 11/26/2003 11:17:56 |
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KileAnderson
USA
875 Posts |
Posted - 11/25/2003 : 00:57:09
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It does seem odd, if the deal was done before lunch, what was the seller (former owner) doing in the house at 2:30 p.m. Did the buyer (current owner) give seller permision to be in the buyer's house? How did he get in? Did he not turn over all keys at closing? I see GB's point, this particular part of the story does seem odd.
Was a walkthrough done on the day of closing? If yes and both parties agreed that the property was in satisfactory condition at time of walkthrough on closing day then this I would think is the assumed condition of the property at closing.
No one knew of any water loss at time of closing. Water loss is discovered after closing so I would believe that a reasonable person (the legal standard) would agree that the damage occurred after closing.
We now turn to the law of the particular state and if it states that title transfer occurs at time of recording 4:50 p.m. and loss was discovered at 2:30 p.m. then I would say that SIC is on the hook under the laws of the state which is all that matters. This is assuming that your real estate attorney friend is correct which I have no reason to doubt that he is if he specializes in real estate law.
Here's my question, is this all purely academic or has there been some attempt by one or both of the carriers to deny coverage? |
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StatMan
USA
9 Posts |
Posted - 11/25/2003 : 01:41:27
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<reply to Kile deleted, info edited and moved into original post>
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Edited by - StatMan on 11/26/2003 11:19:14 |
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Buster Cherry
14 Posts |
Posted - 11/25/2003 : 06:12:56
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Suppose this was an all cash sale and there is no mortgage involved/needing to be recorded. Seller signs deed, deed is sealed and delivered to buyer or buyer representative. Seller has no responsibility to record deed, and buyer for whatever reason doesn't want deed recorded (maybe doesn't want wife he is separated from to know he is buying house), and therefore holds deed in his possession with the idea that he will have deed recorded months or even years from now.
Was there a conveyance of the property?
Does the seller still own the property even though he has cashed the sales proceeds check?
Why is the term signed, sealed, delivered usually the standard for a real estate transfer but not here?
I think I would get a second opinion on when the actual transfer of real estate interest took place, and I strongly suggest like Ghostbuster it occurred when the seller signed, sealed and delivered the deed to the buyer. Recording of the deed is merely posting a public record of the prior private act between the two parties.
Just out of curiousity, what would have happened if the deed had not not been recorded until after the weekend, and the damages were discovered on Saturday or Sunday? Aren't most seller insurance policies cancelled effective the date of 'closing' instead of the date of recording? |
Edited by - Buster Cherry on 11/25/2003 06:22:57 |
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StatMan
USA
9 Posts |
Posted - 11/25/2003 : 10:45:49
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<reply to CCarr deleted>
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Edited by - StatMan on 11/26/2003 11:21:01 |
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CCarr
Canada
1200 Posts |
Posted - 11/25/2003 : 12:52:06
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Stats, I have again edited the timeline, to try and be consistent with your information; but I have a couple of other concerns.
The SIC "representative" that the seller's realtor communicated with after 6.30PM - who initiated that call, you or the realtor? Who / what is this SIC "representative"? Is it an after hours person on the SIC claims 'help line'? How do you / did you distinguish that from the yet to be assigned adjuster? What comments relative to this did the Dryco people have when they showed up at 8.00PM? Did the Dryco people say an "adjuster" had dispatched them? Did Dryco have you sign an authorization form to proceed with whatever work they wanted to do? If so, did you retain a copy, does it have a claim number and "adjuster" name on it?
Now, I have growing concern for the validity or intent of your presentation of this scenario into this forum. You responded earlier to Kile saying, "it's a real case". Your last post, specifically your last sentence, causes me to doubt the sincerity of that. In fact, your 'writing style' leads me to other assumptions as to your identity; far removed from that of a policyholder of SIC seeking input into a troubling claim situation.
Others can proceed as they see fit, but I'm reluctant to offer any comment on your 4 questions, until I am satisfied "who" you really are or who you are representing; or the true intent of your effort here. |
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StatMan
USA
9 Posts |
Posted - 11/25/2003 : 14:18:46
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Update on the hiring of DryCo: Both SIC adjuster and DryCo say that DryCo's client is Seller. No paperwork exists as far as I know. DryCo has established history with service on SIC claims, so jumped when somebody (who, I don't know - agent? hotline operator?) said jump. DryCo arrived at house (8:00 p.m.), was handed key to house by Seller, and went right to work. Seller left.
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Edited by - StatMan on 11/26/2003 11:23:13 |
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KileAnderson
USA
875 Posts |
Posted - 11/25/2003 : 14:44:33
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If the course of action and coverages have been determined, and too your liking as well, what's the problem? If repairs have not yet been done, why? Is it just a time issue and the damage just occured? Is there a dispute over the scope of damages and no agreed price? Are you just waiting for your favorite contractor to finish his smoke remediation jobs so he can do yours?
Just curious. I don't see the purpose of your research and questions unless there are unresolved issues involving this claim. |
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ChezCache
4 Posts |
Posted - 11/25/2003 : 15:50:01
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| StatMan, excellent topic and coverage situation regardless of who you are and what role you play in the scenario. Please let us all know how it all plays out. |
Edited by - Tom Toll on 11/26/2003 06:01:31 |
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Topic |
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Damage on closing day
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