Utilities and Insurance?

[filingin08]

Not sure exactly what we should do, or what we can do legally....

Filed B13 in 2008, but did not surrender house until 2013.

No one has lived in the house since 5/2013 and we've continued paying all utilities and property insurance.

I just got the quarterly bill for the sewer and am wondering what do do... It's not a lot ($40) but there are other nominal expenses with the house as well --- water ($21/quarter when there is no use), electricity ($20), gas ($20). The pilot light is on and I'm assuming the electric is from the automatic light at the curb. All total and including the insurance, we're out about $140/month. We can afford to keep doing this until title transfers, but should we? Or should we cancel insurance and shut off all utilities? Or keep insurance only? Suggestions?

Also, we're in Ohio and with our recent freeze, I'm a little worried about the pipes in the house. We live 2 hours away, so we didn't just pop over nor did we ask anyone else to check. Going there next week for unrelated matter and plan to check on then. If pipe froze/busted and basement is filled with water, who is responsible?

Oh, and as a side note, if NDC is accurate, our last payment was received by the trustee this week!!!

Thanks!

[AngelinaCat]

I would say to keep the utilities on, just so the house can be made to look lived in. Also, if there is an incident with the freeze, you can take steps to mitigate any damage.

As for the insurance, you are in a Catch 22 situation. If you try to make a claim, and the insurance company finds out the house has been vacant, they will drop you like a hot rock. Likewise, most insurance companies will not write a policy for a vacant building.

You may be able to get a basic fire/dwelling policy that will cover the basics and protects you in the event a trespasser falls and breaks a hangnail on your property. Talk to your insurance agent.

Good luck!

[LadyInTheRed]

Congratulations on making the last payment!

You should have all utilities turned off.

Assuming your mortgage will be discharged (don't assume it is in a Chap 13), damage to the house is not your concern at this point. It's the bank's problem.

If burst pipes cause damage to a neighborhing property while title to the house is in your name, you could be held liable for their damages. Liailbity for the damage of neighboring properties is the reason you would keep insurance, if you can get it for a vacant property. If you think the risk of conditions on your property causing damage to a neighboring property is small, you may want to cancel the insurance too.

[LadyInTheRed]

I would say to keep the utilities on, just so the house can be made to look lived in. Also, if there is an incident with the freeze, you can take steps to mitigate any damage.

Hi, AC. You posted while I was typing. I'm curious why you think the OP should care about the house if he/she is surrendering it and the loan is being discharged. Are you concerned about damage to neighboring properties?

You may be able to get a basic fire/dwelling policy that will cover the basics and protects you in the event a trespasser falls and breaks a hangnail on your property. Talk to your insurance agent..

I used to think that injury to trespassers was a concern. But, I have been told that a property owner is not liable to a trespasser for injuries incurred during the trespass. This may vary by state law. Best to check with an attorney about that issue.

[AngelinaCat]

Normally I would say to shut the utilities off, but I was looking at the location of the poster--Ohio--and thinking of this spell of freezing/blizzard weather, that most of us have just experienced this week. Our low on Tuesday night was 27 degrees. My guava bush is not very happy at this point....

[bcohen]

Most houses with a basement use a sump pump to keep the basement from flooding, and once the electricity is turned off, the basement will quickly flood, making the house uninhabitable. If this happens, then the house might NEVER sell, which means that the title will stay in your name indefinitely, thus preventing you from buying another house in the future.

I would suggest keeping the utilities on, and trying to convince the lender to take a DIL if possible, so you can get the house out of your name faster. I would, however, cancel the insurance because it is unlikely that the insurance company would honor a claim anyways since the house is vacant. Also, since the mortgage was discharged in bankruptcy, you are not liable for any loss or damage to the property. The utilities alone should not eat up too much money, and since you don't have a HOA, you don't have to worry about monthly dues and special assessments!

[LadyInTheRed]

My guava bush is not very happy at this point....

If it is going to be that cold again tonight, poor hot water on the ground around the bush.

[LadyInTheRed]

Most houses with a basement use a sump pump to keep the basement from flooding, and once the electricity is turned off, the basement will quickly flood, making the house uninhabitable. If this happens, then the house might NEVER sell, which means that the title will stay in your name indefinitely, thus preventing you from buying another house in the future.

Good point. I didn't think about that.

[AngelinaCat]

If it is going to be that cold again tonight, poor hot water on the ground around the bush.

It had rained here for several days before the temperature went down, so the ground was good and wet. Some of the leaves are curling from the winds wee had. It will be some time before I knew how bad the damage is.

[Blossoms]

Most houses with a basement use a sump pump to keep the basement from flooding, and once the electricity is turned off, the basement will quickly flood, making the house uninhabitable. If this happens, then the house might NEVER sell, which means that the title will stay in your name indefinitely, thus preventing you from buying another house in the future.

I would suggest keeping the utilities on, and trying to convince the lender to take a DIL if possible, so you can get the house out of your name faster. I would, however, cancel the insurance because it is unlikely that the insurance company would honor a claim anyways since the house is vacant. Also, since the mortgage was discharged in bankruptcy, you are not liable for any loss or damage to the property. The utilities alone should not eat up too much money, and since you don't have a HOA, you don't have to worry about monthly dues and special assessments!

I live in Ohio, where many houses have basements. Some have sump pumps, many don't. My husband and I have rented two houses with basements, where neither had a sump pump. The house we're currently renting does. Interestingly, in the city we lived in prior to moving recently, there was a ton of rain and flooding one summer, and our basement didn't flood, but my husband's friend, who lived not even a quarter of a mile from us got about a foot of water in his basement. Homeowners insurance doesn't normally cover flooding though, right?

[AngelinaCat]

I Homeowners insurance doesn't normally cover flooding though, right?

That can be tricky. The Flood insurance that everyone hears about is a separate policy from your homeowner's insurance, that the mortgage companies are likely to insist that you purchase, if your home is located in an area designated as a 'Flood Zone'.

Here is a link to the FEMA website on the subject:

http://www.fema.gov/floodplain-management/flood-zones

Whether your homeowner's insurance would cover an instance of flooding in your home caused by a broken pipe, or runoff from a neighbor's yard, is a good question to ask your insurance agent. I would think that the first scenario would be covered; I don't know about the second.

[filingin08]

Well.... before we could make any decision regarding the utilities/insurance, we got a call from our neighbor saying she noticed what looked like ice coming from the kitchen window. YIKES!

Pipes broke, in two places... water EVERYWHERE... We've been sleeping in the house infrequently (last time late Dec) as we've relocated 2 hours south. Praying the house is not considered vacant and the claim is approved. Even then, though, I guess we'll just pay for the water mitigation and let the house sit. We surrendered it months ago and should be discharged in another month or so (ndc shows case as COMPLETE!).

Meeting with insurance adjuster Thursday. Stress level through the roof until then... Ugh.

[AngelinaCat]

Just do not volunteer any information.

When I told my independent insurance agent, that we were rebuilding the house, and living in a camper alongside the house, this was not acceptable to ANY insurance company that my agent tried to fit me with.

[ValleYum]

Congratulations on making the last payment!

You should have all utilities turned off.

Assuming your mortgage will be discharged (don't assume it is in a Chap 13), damage to the house is not your concern at this point. It's the bank's problem.

If burst pipes cause damage to a neighborhing property while title to the house is in your name, you could be held liable for their damages. Liailbity for the damage of neighboring properties is the reason you would keep insurance, if you can get it for a vacant property. If you think the risk of conditions on your property causing damage to a neighboring property is small, you may want to cancel the insurance too.

Oh, if only LITR... Our city had a minimum water/sewer bill of $60. They will not take it out of a legal owner's name until title is transferred (it's all about the revenue these days, I guess). After 3 months of non-payment they send your bill to collections and/or place a lien on the house. I have read that post-petition bad debt is hard on credit recovery** so we opted to pay that and our small HOA dues until the house was DIL'd or foreclosed once we moved out.

**Several PM companies and apartment complexes here stated on their credit applications that a discharged BK was fine (likely would incur a larger deposit) but that ANY post-petition bad debt other than medical or student loans would result in an immediate denial of the application.


RE Water damage: If you have the power off in a home during the winter months remember to leave any cabinet/vanity/utility room doors OPEN so that air can circulate around the pipes. Even in the coldest of cold temps, that will aid in a degree or two difference in water temp inside the pipes. Water expands when it freezes and makes an unholy mess when the pipes can't bear the structural stress and burst.

filingin08? I wish you good luck with the property adjustor. Some insurance companies say furniture in home = occupied - can you pull your policy documents online and see what your policy said?

[filingin08]

ValleYum - Thanks for the suggestion to pull the policy. The only thing it states as to vacant is that they will not cover freezing pipes if the house is vacant AND you have not left heat on or turned water off. It mentions vacant as it relates to vandalism and then says it won't cover if 30 days vacant prior to event. From this, I think we should be okay, we'll see tomorrow...