Legal Question in Real Estate Law in Arkansas

Re: Insurance

It would be necessary to read the sales contract you entered into with this gentleman in order to give an accurate answer to your question.

However, under no circumstances turn the check over to him. Use it to either rebuild your house or to pay off the loan depending on the wording in your sales contract.

This post is not legal advice and does not create an attorney-client relationship. It is a comment on the legal question posed by the poster and should not be relied upon in any way. All readers are advised to consult an attorney to address their specific legal concerns.

Re: Insurance

I concur with Arnold, not to turn the check over. I also have not seen the sales contract or its wording, so any comments will be general and not specific to your question. Most contracts of the type you describe give the buyer certain rights of ownership (like claiming deductions for real estate taxes paid by the buyer), but make this ownership contingent on meeting all conditions of the contract. I presume the contract also incorporates your mortgage loan? If so, what does the mortgage document say about insurance proceeds? Do they get applied to repair the house, or are they to be used to reduce the loan? It appears that the house was totally destroyed. In that case, both the mortgage language and the sales contract need to be examined to see the language on total destruction. I presume the loan payments were to be credited to his purchase price? If so, my general anwer would be as follows, if supported by the language of the documents involved: You are entitled to be paid the remaining balance of the original purchase price less any payments made to date or other credits to which the buyer is entitled. This should include the payment of the balance of the loan, if the documents specify this happens on a total loss. If the insurance proceeds are less than what you are owed, the buyer gets nothing. If the insurance proceeds are greater that what you are owed, including having the loan paid off, the buyer is entitled to the excess. I really need to see the documents involved to give you a proper answer.

Re: Insurance

A review of your executory contract would be required to answer your dilemna...