Is it legal to sell my house after an insurance claim without all the repairs completed?

UPDATED: Oct 1, 2022

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Is it legal to sell my house after an insurance claim without all the repairs completed?

Over the winter a tree fell on the roof of our rental home. The insurance cash settled did not cover all of the damages. We paid for the tree removal. We have little funds left to complete repairs but we do have a small amount of remaining money. Someone would like to buy the house from us. They are aware of the situation and the insurance issue. Is it legal to sell the house although we have money left from the claim and have not completed the repairs?

Asked on February 1, 2019 under Real Estate Law, Ohio


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

If the money was sent directly to you (i.e. check made out to you) and there were no "strings" attached, it is legal: the insurer decided that the value of your claim was X and wrote you a check for that amount. What you do after that with the money is up to you.
It would not be legal if the settlment or payment from the insurance company came with a requirement that you submit invoices, etc. to prove the work was done, or if the checks were actually made out to contractors but you cashed them somehow: in that case, by not using the money for what it was sent to you for, you committed fraud on the insurer. 
But again, if there no limitations on what you could do or had to do, just a check, then it's your choice whether to repair, how much to repair, how to repair, etc. and you could simply keep the money.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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