It is prudent for property owners to maintain property insurance to protect against slip and fall injury claims. Coverage is especially important in cities like Philadelphia where each property owner is responsible to maintain their own sidewalk. If an allegedly injured person files a lawsuit, the City of Philadelphia is only secondarily responsible. This means that the property owner must pay the judgment. If the city contributes to the judgment, the property owner must reimburse the city for any amount paid.
Uninsured situations most often occur with estate properties, unoccupied properties, and buy and hold investments. For example, when a homeowner dies, the heirs may allow coverage to lapse. Investors who purchased properties without an occupant may also neglect to obtain coverage for various reasons.
An undefended injury claim can be catastrophic to the property owner or estate heir. Below are some of the major problems an injury case can present:
Most buyers of real estate finance their purchase through a mortgage. When a buyer mortgages a property, the lender will record the mortgage note with the local recording office. The recorded note provides notice to the world that the property is encumbered by a mortgage.
When the loan is paid off, the lender will give the borrower a document called a mortgage satisfaction. A satisfaction is the borrower’s proof that the property is released from the mortgage. The borrower can then sell the property free and clear of the mortgage.
Real estate investors searching for property acquisitions often locate properties with deceased owners. These properties might make a good investment if the property could be legally purchased from the owner. But if the owner is deceased and left no heirs, or the heirs cannot be found, it may not be possible to purchase the property.
These properties are unfortunately sold at a sheriff tax sale when the taxes go unpaid. The potential acquisition may no longer make sense when the investor must bid at the tax auction against many other investors.