New liability while waiting out the foreclosure

The house is yours until the foreclosure sale is held by the bank.  So when the leaking toilet in the condo damaged  the unit below, my client the homeowner stands to be responsible for the repair.

Only the client cancelled her homeowners insurance after she moved out of the condo.  To make matters worse, she filed bankruptcy before the pipe burst.  So any liability she has for the damage to her neighbor’s property will not be discharged in the bankruptcy.

I usually make this point about liability following the property with extreme examples:  the toddler who breaks their neck on the porch;  the burglar who falls through the skylight.  We all wince at the thought.  But here, my tale of potential liability played out with water pipes.

As long as you are the owner of the property, you need liability insurance.

Related posts:

1. Protect yourself prior to foreclosure
2. Foreclosure Sale May Not End Financial Liability
3. Beware the HOA when walking away