TREC Paragraph 14 gives Texas buyers a contractual exit or repair path when a home under contract sustains storm damage before closing. The clause covers any casualty loss, from hail damage to full structural destruction, and ties insurance responsibility to the date the damage occurred rather than the closing date. Sellers bear the repair obligation, but the buyer’s real leverage depends on how quickly they document the damage and whether the lender’s appraisal or inspection requirements reset the timeline.
Buyer Protections Under TREC Paragraph 14
- Core protection: TREC Paragraph 14 requires the seller to restore the property to its pre-damage condition before closing, or the buyer can terminate and recover earnest money
- Best suited for: Buyers who discover hail, wind, or flood damage after executing the contract but before the closing date, especially when the seller carries active homeowner insurance
- Watch for: Sellers who refuse to file an insurance claim or argue the damage is cosmetic, which does not override the buyer’s contractual right to demand repairs
- Bottom line: If the seller cannot or will not restore the property, the buyer can walk away with earnest money intact, with no penalty and no obligation to close on a damaged home
Seller’s Options Under Paragraph 14
- Primary obligation: The seller can restore the property to its previous condition before closing, using insurance proceeds or personal funds, keeping the deal intact.
- Insurance claim timing: Filing promptly matters because lenders require proof of completed repairs or an insurance settlement before clearing the buyer’s loan to close.
- Negotiation path: Sellers can offer a credit at closing or reduce the sale price instead of making physical repairs, if the buyer agrees to amended terms.
- Worth noting: If repair costs exceed the insurance payout and the seller refuses to cover the gap, the contract gives the buyer termination rights, so lowballing repairs can kill the deal entirely.
When Closing After Storm Damage Makes Sense
- Insurance covers it: The seller’s homeowner policy covers the full roof replacement or structural repair, the contractor is scheduled, and work finishes before the closing date with no out-of-pocket gap.
- Repair cost is minor: Damage is cosmetic rather than structural, the seller agrees to complete repairs at their expense, and the lender’s appraiser confirms the property still meets loan requirements after the work.
- Closing timeline holds: Contractor availability allows repairs before the rate lock expires. If your lender needs a re-inspection, confirm turnaround time before agreeing to extend closing.
- Main takeaway: Staying in the deal works when the seller has a funded insurance claim, a licensed contractor on schedule, and a written amendment to Paragraph 11 confirming all repairs are complete before the amended closing date.
When Walking Away Is the Stronger Move
- Structural red flag: Damage affects the foundation, roof decking, or load-bearing walls, and the seller’s insurer classifies the loss as cosmetic rather than structural, leaving major repairs unfunded.
- Financial trigger: The seller’s insurance deductible exceeds what the claim payout covers, the seller has no cash reserves to bridge the gap, and unfinished repairs stall the closing.
- Timeline pressure: Paragraph 14 allows up to 15 days for performance, but contractor backlogs after a major hail event routinely push completion past that window, stalling the entire transaction.
- Main takeaway: Termination is strongest when the seller cannot produce a contractor’s completion guarantee within the 15-day Paragraph 14 window, because lenders will not clear-to-close on unfinished structural repairs regardless of contract extensions.
What happens if a property that’s under contract is extensively damaged prior to closing?
TREC Paragraph 14 places casualty loss responsibility on the seller. If the property is damaged or destroyed while under contract, the buyer may extend the performance deadline up to 15 days, and can terminate and recover earnest money if the damage is not adequately resolved.
What is the statute of limitations on hail damage in Texas?
Texas homeowner insurance policies set their own deadlines for filing hail damage claims from the date of loss. Check the specific policy for the filing window. If a home is under contract when storm damage hits, TREC Paragraph 14 governs separately, giving the buyer the option to extend performance up to 15 days, negotiate repairs, or terminate the deal.
What does Section 5.008 of the Texas property code require a written seller’s disclosure notice for?
Section 5.008 requires sellers to deliver a written notice disclosing known material defects and property conditions, including previous storm damage, flooding, roof repairs, and structural issues. The disclosure must cover conditions that could affect the property’s value or the buyer’s decision to purchase, and it applies to most residential sales in Texas.
The Bottom Line Up Front
If a Texas home takes hail or storm damage while under contract, TREC Paragraph 14 governs what happens next. The seller bears the risk of casualty loss until closing, and the buyer holds the stronger position. But the friction sits in the details: restoration timelines, insurance claim ownership, and whether the seller actually follows through on repairs before the deal closes.
Paragraph 14 of the TREC One to Four Family Residential Contract allows the buyer to extend the time for performance up to 15 days after casualty damage when the seller cannot restore the property due to factors beyond the seller’s control. If the property cannot be restored to its previous condition within that window, the buyer can terminate and recover the earnest money deposit. Sellers who refuse to file an insurance claim or delay roof replacement create the most common disputes. Hail damage confirmed by an independent inspector strengthens the buyer’s position. The contract does not require the buyer to accept a damaged property or wait indefinitely for repairs.
- TREC Paragraph 14 places casualty loss risk on the seller until the deed transfers at closing.
- The buyer may elect to extend the performance deadline up to 15 days when the seller cannot restore the property due to factors beyond the seller’s control.
- Buyers can terminate and recover earnest money if the property cannot be restored to previous condition.
- Sellers who refuse to file insurance claims or complete repairs face contract termination and potential legal exposure.
- An independent inspection documenting hail or wind damage strengthens the buyer’s negotiating and termination position.
Contract Rights After Storm Damage in a Texas Home Sale
Paragraph 14 of the standard TREC residential contract protects buyers when storm damage occurs before closing. The seller carries the obligation to restore the property to its previous condition at the seller’s expense. If restoration is not possible or the seller refuses, the buyer can terminate the contract and recover the full earnest money deposit. This applies regardless of when during the contract period the damage occurs.
| Scenario | Buyer’s Rights Under Paragraph 14 | Recommended Action |
|---|---|---|
| Hail damage confirmed, seller agrees to repair | Seller must restore property to pre-damage condition before closing | Schedule a re-inspection after repairs to verify quality and completeness |
| Storm damage confirmed, seller refuses to repair | Buyer can terminate and recover full earnest money | Send written termination notice citing the Paragraph 14 casualty loss provision |
| Repair timeline extends past the scheduled closing date | Buyer can negotiate a closing extension or terminate | Amend the contract in writing with a new closing date tied to repair completion |
| Seller files insurance claim and keeps the proceeds | Buyer has no automatic right to the seller’s insurance payout | Negotiate assignment of insurance funds as a condition of closing |
| Damage found during the final walkthrough | Paragraph 14 applies up to the moment title transfers | Document damage immediately, notify seller in writing, and delay closing if needed |
Buyers who find storm damage should document everything with timestamped photos and get an independent inspection report before making any contractual decisions. Written notice to the seller is required because verbal agreements carry no weight under the TREC form. If the seller has already filed a homeowner’s insurance claim, the buyer has no automatic right to those proceeds under the standard contract language. That requires a separate negotiation. Request assignment of insurance funds as part of any written amendment to the original agreement.
What Happens When a Texas Home Is Damaged Before Closing?
The TREC contract gives buyers three paths when storm damage hits before closing: accept the property as-is with insurance proceeds assigned, negotiate a repair agreement before funding, or terminate the contract and recover earnest money in full. The choice belongs to the buyer, not the seller, once a casualty loss is confirmed under Paragraph 14.
Buyers who skip an independent damage assessment before choosing their Paragraph 14 option give up their strongest negotiating position. The seller’s insurance adjuster works for the seller’s carrier. Get a licensed inspector or roofing contractor to document the full damage scope and estimated repair cost before you accept any offer. That independent report determines whether you negotiate from strength or walk in blind.
Your lender adds another layer. Most mortgage companies will not fund a loan on a property with confirmed unrepaired storm damage. If the seller agrees to make repairs, get a written amendment to the contract specifying the scope of work, a completion deadline, and your right to a re-inspection before closing. If repairs cannot be completed before the closing date, file a formal extension. Without that extension, you risk losing rate lock protections and missing contractual deadlines that could give the seller grounds to terminate on their end.
How Does Hail Damage Affect a Property Under Contract in Texas?
Hail damage creates a financing obstacle that goes beyond cosmetic concern. Most lenders require a damage-free roof to fund the loan, so even moderate hail hits can stall closing until the seller files an insurance claim and completes repairs. The timeline pressure from Paragraph 14’s 15-day extension window makes early detection critical.
- Lender roof requirements: FHA, VA, and conventional lenders all require a functional roof with no active damage before they release funding at closing.
- Insurance claim timing: The seller’s insurer needs time to send an adjuster, which eats into the 15-day Paragraph 14 window. File early.
- Independent inspection matters: Get your own roofer’s assessment before accepting the seller’s adjuster report, since insurance estimates often undervalue hail repairs.
- Repair completion before closing: Lenders will not fund if repairs are only scheduled but not finished, so confirm completed work with a re-inspection before the closing date.
What Is the Deadline to File a Hail Damage Claim in Texas?
Texas homeowner insurance policies require prompt notice of hail damage, and each policy sets its own filing deadline from the date of loss. When a home is under contract, the seller holds the active policy and bears responsibility to notify the insurer. Waiting until after closing complicates the claim because coverage ties to the policy in force when damage occurred.
- Policy terms vary: Most Texas homeowner policies specify a window for filing claims after a covered loss. The seller should pull out the policy and review the notice requirements immediately after storm damage is confirmed by inspection.
- Date of loss controls coverage: Insurance applies based on when the hail struck, not when ownership transfers at closing. The seller’s policy covers the damage because the seller owned the property when the storm hit.
- Seller refusal has consequences: A seller who delays or refuses to file gives the buyer grounds to terminate or renegotiate under the contract protections already in place. The longer the seller waits, the weaker their negotiating position becomes.
- Document everything early: Get an independent inspection report within days of the storm, not weeks. Timestamped photos, written repair estimates, and the inspector’s findings give both the insurance adjuster and the buyer concrete evidence to work from.
Texas Seller Disclosure Duties Under Section 5.008
Texas Property Code Section 5.008 requires sellers to deliver a written Seller’s Disclosure Notice covering known material defects, and that obligation does not expire when the original notice is delivered at the start of a transaction. When storm damage occurs while the property is under contract, the seller must amend the notice to reflect newly discovered conditions. Failing to update creates post-closing liability.
If storm damage occurs after your original Seller’s Disclosure Notice was delivered, prepare a written amendment listing each affected component: roof, siding, windows, HVAC, fencing. Attach the insurance adjuster’s scope-of-loss report or an independent inspector’s findings. Deliver the amendment to the buyer’s agent before closing. Verbal notification does not satisfy Section 5.008. Only a written update to the notice creates a defensible record.
This disclosure duty runs parallel to Paragraph 14 but serves a separate legal function. Paragraph 14 addresses the buyer’s contractual options after casualty damage. Section 5.008 creates an independent statutory obligation that applies regardless of how the parties resolve the contract dispute. A seller who files an insurance claim for hail damage has created documented awareness of a material defect. Choosing not to amend the Seller’s Disclosure Notice after filing that claim strips away any defense of ignorance. The adjuster’s scope-of-loss report and the claim filing record become the buyer’s primary exhibits in a post-closing repair lawsuit.
Who Is Responsible for Damage Before Closing When the Buyer Has Not Taken Possession?
The seller carries the risk of loss for any damage that occurs before closing when the buyer has not taken possession. Under the standard TREC residential contract, the seller’s obligation to restore the property or negotiate a price adjustment stays active until the deed records and the buyer receives keys. The buyer holds no financial responsibility for storm repairs during this window, regardless of damage type or severity.
| Action | Timeline | Cost Impact |
|---|---|---|
| Seller files insurance claim promptly | Within days of storm | Adjuster inspects before closing, repair estimate funds the restoration |
| Seller delays insurance filing | Weeks after storm | Insurer may deny or reduce claim for late notice |
| Buyer exercises Paragraph 14 termination | Before 15-day extension expires | Earnest money returned in full, buyer exits with no repair liability |
| Buyer takes no action on termination | Past contract performance deadline | Loses termination right, may close on damaged property with no guaranteed fix |
Timing is critical. Both sides feel the pressure. Sellers who file insurance claims within days of the storm give adjusters enough time to inspect the property and prepare a repair estimate before the scheduled closing date. Buyers who evaluate the damage report and decide within the contract’s performance window retain their full termination rights under Paragraph 14. Waiting creates compounding problems: the seller’s insurer may question a delayed claim, the buyer’s lender may refuse to fund a damaged roof, and contract deadlines pass without the buyer taking action, stripping away the right to walk away with earnest money.
The Bottom Line
TREC Paragraph 14 puts the repair obligation on the seller when storm damage hits a Texas home before closing. Buyers hold three clear options: accept the property with assigned insurance proceeds, negotiate a repair agreement before funding, or terminate the contract entirely. Hail damage adds a financing layer because most lenders will not fund a loan on a damaged roof, which means even moderate hits can delay or kill a closing until the seller files a claim and completes repairs.
The key factors come down to timing and documentation. Sellers carry the active insurance policy and must file promptly under their policy’s deadline from the date of loss. Section 5.008 disclosure duties do not expire after the original notice, so new damage triggers a new obligation. Buyers who understand these protections before a storm hits are in the strongest position to protect the deal or walk away clean.
Frequently Asked Questions
Who carries liability for property damage that occurs before closing if the buyer hasn’t taken possession?
Under the standard TREC One to Four Family Residential Contract, the seller bears the risk of loss until closing. Paragraph 14 states that if any part of the property is damaged or destroyed by fire, windstorm, flood, or other casualty, the seller must restore it to its previous condition as close as reasonably possible. The buyer has not taken title or possession, so the seller retains full responsibility. If the damage is so severe that restoration is not feasible within the contract timeline, the buyer can terminate and receive their earnest money back.
How does the 15-day extension under TREC Paragraph 14 work?
When casualty damage occurs while a property is under contract, Paragraph 14 allows the buyer to extend the closing deadline by up to 15 days when the seller fails to restore the property due to factors beyond the seller’s control. This is the buyer’s election, not an automatic extension. During this period, the buyer should monitor repair progress and request documentation of all completed work. If the seller cannot restore the property within those 15 days, the buyer gains the right to terminate the contract and recover their earnest money deposit.
Can a buyer terminate the contract if storm damage repairs are not completed before closing?
Yes. If the seller fails to restore the property to its previous condition within the extended timeframe allowed by Paragraph 14, the buyer can terminate the contract. Upon termination, the buyer is entitled to a full refund of their earnest money. This is a contractual right, not a negotiation point. The buyer does not need to accept a credit at closing or agree to incomplete repairs. Buyers should document the damage thoroughly and communicate in writing through their agent to preserve their termination rights under the contract.
What common mistakes do buyers make when dealing with pre-closing storm damage in Texas?
The biggest mistake is closing anyway without confirming repairs are complete. Some buyers accept a seller credit instead of actual repairs, then discover the damage costs more than the credit covers. Another common error is skipping a re-inspection after the seller claims repairs are finished. Buyers also sometimes fail to notify their lender about the damage. Most lenders require the property to be in the same condition as the original appraisal. If the lender discovers unrepaired damage at closing, they can delay or deny funding entirely.
Does the seller’s homeowner insurance cover hail damage that occurs while the home is under contract?
The seller’s policy typically covers the property until closing because the seller still holds title. Coverage depends on the specific policy terms and the type of damage. Hail damage is covered under most standard Texas homeowner policies, though some policies in hail-prone areas carry separate wind and hail deductibles calculated as a percentage of the insured value. The seller files the claim, not the buyer. Buyers should ask for copies of the insurance adjuster’s report and compare it against an independent contractor estimate before accepting that repairs are adequate.
Should the buyer get an independent inspection after storm damage occurs during the contract period?
Always. The seller’s insurance adjuster works for the insurance company, not for the buyer. Their estimate may undercount damage or miss items that affect the home’s structural integrity or roof lifespan. Hire a licensed inspector or a roofing contractor who is not connected to the seller’s claim. Compare their findings against the adjuster’s scope of work. If the independent inspection reveals damage the seller’s repairs did not address, the buyer has stronger grounds to request additional work or exercise termination rights under Paragraph 14.
What happens if the seller collects insurance proceeds but does not complete repairs before closing?
The seller has a contractual obligation under Paragraph 14 to restore the property. If they collect insurance proceeds and fail to complete repairs, the buyer should not close. Document the unrepaired damage with photos and an independent inspection report. Notify the seller in writing through your agent that repairs are incomplete and that you will exercise your termination right if work is not finished within the Paragraph 14 timeframe. If you close on a property with known unrepaired damage, you inherit the problem. The seller’s insurance claim does not transfer to you.
