Contracts

Under Alaska law, which party in a residential real estate transaction bears the risk of loss if the property is damaged before closing but after the purchase agreement is signed?

AThe buyer, once the contract is signed
BThe seller, until closing and transfer of possession
CThe insurance company for both parties
DThe party who possesses the property at the time of damage✓ Correct

Explanation

Under the Uniform Vendor and Purchaser Risk Act (adopted in modified form by many states), the risk of loss generally remains with the party in possession at the time of loss. In Alaska residential transactions, this is typically the seller until closing and delivery of possession to the buyer.

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