We try to help when a property is under contract or pending closing by deferring payment for damage repair costs and other work until the closing, and also accepting compensation from the proceeds of the sale. We are pleased to offer deferred payments, and it has proven to be a real benefit to those who must put on a new roof to satisfy the buyer’s demands but do not have the necessary funds available to pay for the roof out of pocket.
Because the price may be different for an insurance job than for a cash job, we are careful to explain the differences to the homeowner so that there is no confusion when submitting the invoice to the title company for payment. And, of course, when we are completing a job for cash, we will do what we can to keep the cost to the homeowner down as much as possible.
We are entitled to receive the amount the insurance company will agree to pay. We will submit an invoice in the amount we believe the insurance company should pay us, and we must be paid that amount at closing from the proceeds of the sale or other funds available to the seller. If our negotiations with the insurance company result in them agreeing to pay us less, we will revise the invoice and refund the amount that the seller overpaid.
Occasionally, the amount an insurance company agrees to pay the roofing contractor exceeds what was paid at the time of closing. Remember, the agreement is to do the work for the amount the insurance company agrees to pay plus the owner’s deductible and any supplements, plus overhead and profit if applicable. Therefore, if the insurance company agrees to pay more than the original invoice at closing, the homeowner will receive that extra amount but is obligated to pay it to the roofing contractor.
The title company handling the closing must collect the outstanding invoice for the roof work. They also have a responsibility to satisfy the pending lien before issuing the title policy stating that the property is free and clear of any liens or encumbrances other than those specifically listed on the title policy. This includes the covenants, conditions and restrictions, and other items. The buyer is not purchasing the property subject to the money owed for the roof work.