What Happens If a Hurricane Damages a Home While It’s Under Contract?

A home can be under contract for weeks before closing. If a hurricane damages the property during that time, both the buyer and seller may have urgent questions: Who handles the damage? Does the sale still move forward? What happens to the closing date?

The answer depends on the purchase agreement the parties signed. In Alabama, the Alabama REALTORS® Legal Helpdesk says the seller generally bears the risk of loss while the seller remains in possession, and the purchase agreement sets out the parties’ rights and responsibilities.

Start with safety and documentation

Wait until authorities say it’s safe before visiting a storm-damaged property. Once access is safe, document visible damage with photos and videos, and promptly notify your real estate agent and insurance company. Avoid starting repairs or making assumptions about who will pay before the parties review the contract and speak with their insurance professionals.

What does the Alabama REALTORS® contract say?

In the September 2025 Alabama REALTORS® Residential Purchase Agreement, the seller agrees to keep sufficient hazard insurance in place until closing and delivery of the deed. If the property is destroyed or materially damaged and the seller cannot restore it to its previous condition before closing, the agreement gives the buyer the option to cancel before closing and recover the earnest money, or accept the property in its damaged condition. If the buyer accepts the damaged property, the agreement says the insurance proceeds for the damage go to the buyer, less the seller’s deductible.

That is an overview of one standard form. The signed agreement, any addenda, and the facts of the damage matter. The parties may have agreed to different terms.

The closing date may need attention

A storm can delay inspections, repairs, insurance decisions, or other steps needed to close. Don’t assume the date automatically changes. The Alabama REALTORS® Legal Helpdesk advises that the contract language controls; if the agreement doesn’t address the delay, the parties may need to agree in writing to extend a deadline.

Keep communication clear

The buyer and seller should review the agreement with their agents and contact their insurance professionals promptly. If the damage is significant or there’s a disagreement about the contract, an Alabama real estate attorney can advise each party about their legal rights. Put any agreed changes in writing.

A hurricane during a real estate transaction can feel overwhelming, but you don’t have to sort through the next steps alone. The Renee Marshall Team can help keep communication organized, explain the transaction process, and help you understand what questions to raise as you decide how to move forward.

This article provides general information about Alabama residential real estate transactions and is not legal or insurance advice. Contract terms and circumstances vary.