I have a home in Michigan that has fire damage. The cost of the repairs exceed the value of the house. . What can/should I do with the house?

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I have a home in Michigan that has fire damage. The cost of the repairs exceed the value of the house. . What can/should I do with the house?

The house is paid off. It is unlikely the repairs will increase the value of the
house because it is Flint which remains very depressed. If I just take the
insurance money and don’t do the repair what do I do with the house. Can I just
walk away without repercussions? If so who do I contact? Can I sell it for a
nominal fee with an ‘as is’ agreement?

Asked on February 20, 2018 under Real Estate Law, Michigan

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

If the insurer provided money directly to you and the money did not come with some agreement (that you had to sign to get the money) that you had to make the repairs, the money is yours to do with as you like. While an insurer can put restrictions on the settlement paid you, they have to actually put those restrictions on it--if they don't, it's simply your money and there are no repurcussions to doing with it as you will.
You can absolutely sell the house "as is" as long as the contract of sale is clear that it is as is and as long as your marketing of the house is honest and accurate. Note that you *do* have to disclose to possible buyers any damage or issues of which you are aware but which are not readily or reasonably discoverable by buyers before purchasing the home--"as is" doesn't protect you from lawsuits for undisclosed hidden conditions known to you. You do not need to disclose anything which is readily observable. Examples: say you do not fix a hole burned in the roof or chopped in the roof by firefighers: that is obvious, and you do not need to disclose it. Say that as a result of water used to fight the fire, there is now mold inside the walls which you are aware of but which a buyer would not likely see--that you have to disclose.
 


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