Insuring And Selling a Sinkhole Home

I inherited a sinkhole house from my parents. It is in a deed-restricted community, and turning into quite the money pit.

It has no physical damage, other than a few hairline cracks which have been there for years. And there is no sinkhole per-se, but when some neighbors reported sinkholes, my parents had a ground inspection. Their insurance was then terminated, due to the findings. The ground is unstable.

The home is forty years old. It has a new roof, and a recently replaced pool liner. Unfortunately, because of the HOA, it must be maintained meticulously. I cannot afford to keep doing this. The electric for the pool pump alone is over a hundred a month, then there is the lawn, which is expected to be kept “lush and green”. The fines for that are $1000 a pop! The HOA rules with an iron fist.

Since it is uninsurable, I am afraid to rent it out due to liability.

How can I get rid of this money pit?

Our Answer

Just because your insurance was cancelled by one carrier doesn’t mean your house is entirely uninsurable. You mentioned that others in the community have the same problem. I recommend asking them how they've navigated insurance in light of the sinkhole.

Overall, your question is a hard one to answer – but if I owned your house, I’d get my own expert assessment of the true condition of the property. This involves hiring a number of inspectors. You mentioned a ground inspection. Who did it? Nothing short of a civil or structural engineer is appropriate in a situation like yours.
Next, determine how big this problem is for the community as a whole. If, indeed, it's a community-wide problem, lobby for a community-wide solution. It's easier for many to get something done than one. From there, talk with realtors to find out what it will take to get this house on the market and sell it.