Claim Transfers

Effective July 13, 2020, existing inactive and Pending Type 1 claimants, who have not yet had their foundations remediated, will be able to transfer their claims, registered with CFSIC, upon the sale of the home in question to a buyer.

(From inception, CFSIC has always permitted those claimants designated as “active” to transfer their claims.) 

Contractors with questions about how a claim gets transferred should contact ESIS ProClaim by email at cfsic@esis.com or by phone at (844) 763-1207.  Your best source of claim transfer assistance will be ESIS.

What follows is a general Q&A, which answers many questions about the transfer process, including how the process affects contractors.

Question: I’m a Type 1, severity Class 2, inactive claimant. If I sell my home and transfer my claim to the buyer, does that change the status of my claim?

Answer: No. The buyer gets the exact status you had at the moment of transfer. 

Question: I’m in line for a Participation Agreement and have been in line for a while. I’ve been told that I may be in the next round of funding at some point after July 1, 2020, but I still plan to sell my house and give up my claim. Does my exact place in line for a Participation Agreement get transferred to the buyer?

Answer: Yes, if the buyer agrees to all terms and conditions of the Claim Transfer Agreement.

Question: Where can I find a sample of the Claim Transfer Agreement on this site?

Answer: Download a sample of the Claim Transfer Agreement here.

Question: I’m a Pending claimant, and I’m aware that, given current anticipated projected funding, I may never get my claim paid unless CFSIC gets more money. If I transfer my claim because I sell my home, will the buyer be taking the same risk I am?

Answer: Absolutely. We may never have enough money to address any Pending claimants.

Question: Can I transfer my claim without selling my home?

Answer: No.

Question: Does this apply to condos? Does it apply to PUDs?

Answer: No for condos. (Remember that condo unit owners are technically not our claimants... associations are our claimants, because it is the association that owns the foundation.) It applies to PUDs.

Question: I’m a Type 2 claimant. Does it apply to my claim?

Answer: No.

Question: Once I transfer my Type 1 claim to the buyer, can he or she re-sell the home and keep transferring transfer the claim again?

Answer: No. The transfer of a claim can occur only once...from one Original Claimant to one Transfer Claimant. It can never be transferred again by the Transfer Claimant.

Question: Will I be able to sell my home (as an inactive or Pending claimant) first and then transfer the claim at some point after that?

Answer: No. The Claim Transfer Agreement date can only be the same date as the date of the sale of the home or a date prior to the sale (but in no event prior to June 1, 2020).

Question: OK, but I sold my house in the middle of June...how will the retroactive June 1 date affect me?

Answer: As stated above, on and after July 13, 2020, the date of the Claim Transfer Agreement must be the date of the sale of the home or a date prior to the sale. It cannot, however, be a date prior to June 1, 2020. In your example, you would still qualify.

Question: So are you saying that if I sold my home on May 15, 2020, I’m disqualified?

Answer: Yes, that’s what we’re saying...besides, at the date of sale you ceased to be a CFSIC claimant anyway, and the correct thing to do would have been to notify ESIS of your status so that someone else could have access to your funds. We are grandfathering this process back to June 1 as an accommodation only.

Question: Are you still going to stop the Pending application process on June 30 as previously announced?

Answer: Yes. We have already done so.

Question: I’m a Type 1, severity Class 3 active claimant. So if I transfer my claim to the buyer of my home, what am I really doing?

Answer: Looks like you don’t have a Participation Agreement yet, based on the question. So, what you’re doing is transferring almost every right, obligation, and duty you had for your active claim to the buyer of your home, who then agrees to take over those rights, duties, and obligations.

If you’re in line for a Participation Agreement, that puts the buyer in line exactly at the same place you were in. If you have already signed a Participation Agreement, you are transferring that Participation Agreement to the buyer. If your Participation Agreement is transferred to the buyer, the buyer will have to enter into a Termination Agreement with CFSIC terminating that Participation Agreement and entering into a new one with CFSIC.

Question: But what happens to the contractor’s proposal that I signed?

Answer: It is important to bear in mind that if the Original Claimant (seller) is an active CFSIC claimant (with or without a Participation Agreement) and has already signed a contract with a contractor, the contractor will have to terminate the signed contract, and the buyer and the contractor will have to enter into a new contract between them, with the understanding that this may work out fine for the buyer and the existing contractor...OR either party may decide that they don’t want to continue.

Question: But I’ve got a signed contract and am in line for a Participation Agreement. What happens if the buyer and the contractor can’t agree on the terms of the original contract or, alternatively, the contractor simply backs out of the arrangement?

Answer: The buyer can seek the required two proposals for construction services from CRCOG-approved contractors to substitute for the original contractor, one of which will eventually substitute for the original contract. CFSIC will keep an active claim “active” for a period of 180 days from the date of the Claim Transfer Agreement in order to allow time for this to happen. If it isn’t accomplished by then, the claim is removed from our system, it is no longer active, and the buyer is no longer in line...and must therefore start the process all over again as if the claim had never transferred. If we are not accepting applications at the time that happens, then the buyer may have to wait for years to reapply, or may never get an opportunity.

Question: Who is responsible for contacting ESIS ProClaim to tell them about the sale of a home?

Answer: Only the original homeowner (Original Claimant). ESIS will not accept communications of any kind from real estate agents or from Transfer Claimants (home buyers) regarding a claim transfer.

Question: Okay...what happens then?

Answer: When you provide ESIS ProClaim with your claim number by phone or email and indicate that you want to transfer your claim to the buyer of your home, they will provide you with a Claim Transfer Data Form to complete. You will send it back to them completed. The Superintendent’s office will then contact you and send you a Claim Transfer Agreement, which will require your signature and that of the buyer, as well as separate witnesses. You will return the fully-executed Claim Transfer Agreement back to the Superintendent’s office. Once this agreement is fully executed and received in the Superintendent’s office, the transfer of the claim can occur, and the permanent records of the claim are changed with regard to who the claimant is. 

Question: I’ve already signed a proposal with a contractor. Who is responsible for telling the contractor that I’m selling my home?

Answer: You are. It is not ESIS ProClaim’s responsibility or CFSIC’s responsibility to do this. It also cannot be the real estate agent or the homebuyer. If you want to transfer your claim, you have to do this yourself.

Question: What happens then?

Answer: ESIS ProClaim will contact your contractor and terminate the Contractor Acknowledgement in force covering the original claim. This is a critical point: at that point, the contractor must immediately refund to CFSIC any deposit CFSIC has paid to the contractor for the original claim. The contractor can then provide a new contract to the buyer for precisely the same terms and conditions as the original contract, complete a new Contractor Acknowledgment in the buyer’s name...or may refuse to do all of this. It is the contractor’s option. It could be that at this critical point, the buyer does not want to accept the contract originally proposed. Just be careful: the buyer has 180 days to stay in line.

Question: But I’ve signed a contract, my claim is active, and I’m in line for a Participation Agreement. If the contractor refuses, does that make the buyer start all the way from the beginning?

Answer: No. If the contractor refuses to provide the buyer with a new contract, we will permit the buyer to seek alternative proposals from CRCOG-approved contractors. If a contract with a new contractor is not approved by ESIS and signed within 180 days from the date of the Claim Transfer Agreement, the claim is voided and the buyer has lost his or her place in line.  

Question: What will CFSIC accept as evidence that the Original Claimant has transferred the home to the Transfer Claimant?

Answer: A copy of the recorded deed.

Question: But I have a CHFA loan agreement that I’ve just entered into. What happens to that?

Answer: You have to address that with CHFA.

Question: My contractor started work on my foundation last week. Can I still transfer my claim?

Answer: No. Once work starts on your foundation, you have to see it through, or you terminate your construction contract. We cannot permit a claim to transfer if even the most preliminary part of the remediation process has begun.

Additionally, you can go to the “For Homeowners” section of this site and specifically to subsection 20 to learn more.