New Insurance Rules May Affect Florida Home Sales

New rules from Citizens Insurance may affect the sale (or purchase) of your St Petersburg home.

Starting September 1, 2012, Citizens requires a 4-point inspection for any new or renewal of a homeowner’s insurance policy on a house 30 years or older – i.e., built before 1982, which covers the majority of homes.

The four “points” of the inspection are:

1.) plumbing,

2.) electrical,

3.) HVAC (heating and air conditioning)

4.) and the roof.  

The inspection must be completed by an appropriate Florida licensed inspector and photos must accompany the report.  

It appears that a new 4 point inspection report will need to be done with each annual renewal. In addition to a certification that all four systems are in good working order, there are some other requirements to note:  

• all roofs will need to have at least 3 more years of expected life;
• no polybutylene pipes;
• and if the house has single strand (aluminum branch) wiring, separate documentation of remediation must be provided and certified by a licensed electrician.

Three remediation methods are allowed: 1) entire home rewired with copper; 2) connections repaired via COPALUM crimp; or 3) connections repaired via AlumiConn.

The aluminum wiring situation is similar to the knob-and-tubing situation in older homes. Most real estate sales contracts will state that all systems need to be operating properly but that the seller/owner will not have to upgrade to new codes unless an item needs repair.

However, if the contract is subject to financing, the lender is going to require insurance. If the buyer can’t get insurance for the home, the loan won’t be approved, so the financing clause will allow the buyer to walk away.

So, it’s better to address this issue before you put the home on the market.