In the Alphabet Soup of Lending: Fannie, Freddie, FHA…just a quick reminder for the buyers of attached properties – townhomes and condos.
First of all…along with the cavalcade of foreclosures, lenders would find the inside of units had been destroyed and would not have any recourse to assist with repair costs.
Now lenders have wised up and have made it a condition of purchase that the buyer insures the interior of the property. Since buyers of attached properties have “walls in” responsibility, they need to be accountable for any potential damage to the interior of the unit caused by leaks or appliances.
Also….both buyers and their Realtors should triple check what the Homeowners Association master insurance covers; a portion of which your condo/association fees contribute toward that premium.
While these policies typically protect the exterior from outside walls to roof to common areas…just make sure you’re not going to get stuck with a repair bill for an exception for which you assume you are covered, just because you think you have insurance coverage by the homeowners association.
At the end of the day, you just never want to get caught swinging in the wind.