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Residential real estate: Getting a mortgage in fire season

Summer is a time in many parts of Canada when the risk of forest fires is at its highest. There are parts of Alberta, like the Fort McMurray area, that are especially susceptible. When it comes to residential real estate in certain parts of the province that are more apt to experience fires, mortgages can be affected, especially if homeowners have been evacuated, the home has suffered damage or is completely razed by fire or if a fire causes a person' employment situation to change.

Before any lender will release mortgage funds, a home must be insured. Homeowners in areas in close proximity to a fire may find it difficult to obtain insurance since most insurance companies won't insure a home which is in a certain distance of a fire that is active. During fire season, this can be a problem.

For instance, a purchaser signs the waivers for a property which closes in a few months. Everything is fine at the time of the signing of the waivers, but when the homeowner goes to pay for the insurance on the home and there are fires in the area, the homeowner may be unable to actually get that insurance. That is where certain conditions are wise to include in these offers.

An Alberta lawyer who practices law in these areas may be able to read over a contract to ensure it includes a clause which states if the purchaser is unable to secure home insurance because of an active fire or evacuation, the closing date will be pushed back until such a time insurance can be secured. This clause may save a purchase a lot of stress. Working with an experienced lawyer during a residential real estate deal may make the difference between a happy deal and one fraught with tension.

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