Foreclosure creates insurance gap

One city’s move to demolish a landmark because of costly fire damage is raising questions about what if any coverage should be mandated on a property in foreclosure

Insurance News

By

Lyle Adriano

A permit was issued by the provincial government, ordered by the City of Bathurst, to authorize the demolition of a foreclosed former Bank of Montreal building that was razed by a fire on November 28.

Some Bathurst residents, however, are against the demolition, citing the historical and cultural significance the building has for the city.

With ideas of salvaging the building taking shape, one problem potentially holds the recovery plans back: the building’s lack of insurance coverage.

Brian Kenny, environment and local government minister and local MLA, put the demolition on hold, noting the significance of the building.

"We've had so many people from our community say let's maybe save that building because you know, we have a habit of taking the easy way out to be able to tear the building down."

The former bank was constructed back in 1919 from Quebec limestone. While the building’s foundation is solid, it needs a new roof, said Kenny.

A committee assembled by the Liberal MLA comprising of businessmen and women, contractors, and architects was tasked to evaluate the feasibility of salvaging the building.

"The important thing today is to make sure we don't tear the building down and look at all the possibilities," remarked Kenny.

Although the building appears to be relatively serviceable, its aforementioned lack of insurance coverage after it was repossessed means it would be difficult to find someone who will pay for its redevelopment; a “no man’s land” situation, as Kenny put it.
 
 

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