An American Tale

An American Tale

We have acquaintances who have a property they rent in the US. It had been successfully let to a young woman who lived with her partner until earlier this year.

Then the couple split, the partner moved out and then came back and burnt the house down.

A terrible experience for a landlord (and the tenant of course) wherever it happens - so why are we reporting it here? Well, it is different in America...

The ex-partner was charged with arson, the insurance company was contacted, they sent an assessor who confirmed that the building needed to be demolished and rebuilt and authorised payment for the necessary works.

Then our acquaintances were told that normal practice in the US is for the insurance company to blacklist a landlord after paying out for a rebuild, so their best bet was to sell the plot as if they went ahead with the rebuild, they would not be able to insure it.

However, for some strange reason, if they bought a property somewhere else, they would be able to insure it.

So that is what they did, they sold the plot as a building plot and also received the full demolition and rebuild cost from the insurance company AND a payment equivalent to a years rent to cover loss of rent during the process, so they were much better off than if they had simply sold the property before it was burnt down.

A great outcome but not the reason this story is reported.

The really interesting bit is that the fire was started late in September and the plot was sold and all monies were in the bank from the sale and the insurance by early November. Less than 6 weeks.

The UK insurance industry compares well with this example, we know of many landlords who have had their claim settled in a matter of days when there is clear and undeniable evidence of the claims as there is in this case. But can you imagine anything involving land or property transactions happening that quickly in the UK? True things are getting better with the land registry and many searches are now possible online, but for 'normal" to be less than several months we have a long way to go unfortunately. (And in the same timeframe the ex-partner was charged, brought to court, found guilty, sentenced and is now serving a substantial period in the state penitentiary - something else that could take months or years here).

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