I have a small commercial building which I sold a couple of years ago on contract for deed to a neighboring business owner. My lender allowed me to do so. I have held the insurance in my name with my lender as the lienholder and the buyer pays me monthly for the premiums. The buyer now wants to get his own insurance. The question is: Do I have him list myself and my lender as lienholders or am I an “additional insured”?
Thanks
Christy
It may vary from state to state or depend on the company but Im buying a apt building on contract and got my own insurance. The seller’s lender and and the seller are additional insured on my policy. Check with local insurance agents.
if I have misunderstood, someone is going to have to pay the taxes. I suspect the seller is going to want you to do that. In owner financing deals I would avoid giving them money monthly to hold for taxes and insurance, but rather would pay them myself. You can set up your own savings account and make monthly payments to yourself for these costs so you will have the money saved when it comes due.
I don’t know what state you are in, but some years ago TX passed a law severely restricting the contract for deed due to the large number of abuses by sellers and the potential for you to lose all your investment when you are late with one payment.
Rather than a contract for deed, try to talk him into taking back a standard mortgage. This will give you some protections because he would have to follow your state’s foreclosure procedures if you got behind, along with other formalities that would have to be observed. He isn’t going to want to do this because he probably knows the contract for deed is almost totally in his favor.
Thanks
Regards
Chantell Wilson
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