Selling a Fire-Damaged House in Cleveland: Taxes, the Insurance Hold and Your Options

By the ACC Solutions team

Short answer: yes, you can sell a fire-damaged house in Cleveland as-is, before or after the insurance claim is settled. Before you decide, know two Ohio rules that take money out of a fire claim before it reaches you: delinquent property taxes get paid first on claims over $5,000, and on a big loss, Cleveland holds back part of the payout until the house is repaired, torn down or secured. This post explains both, then the ways to sell. It's general information, not legal or insurance advice.

Rule 1: Back taxes come out of the claim first

Under ORC 3929.86, an insurance company can't pay a fire claim on a structure in an Ohio city or township when the amount recoverable is over $5,000 until it gets a certificate from the county treasurer. You request that certificate from the Cuyahoga County Treasurer and give it to the insurer.

• If the certificate shows no delinquent taxes or city costs, the insurer pays under the policy (subject to Rule 2).
• If it shows delinquent taxes, assessments, penalties or charges, or costs a city already certified for removing, repairing or securing the building, the insurer sends that amount from your proceeds to the treasurer.

So if you're behind on taxes, the claim check will be smaller than the settlement. Our post on selling with delinquent property taxes in Cuyahoga County covers the tax side.

Rule 2: On a big loss, Cleveland holds part of the payout

When the agreed loss equals or exceeds 60% of the total fire policy limits on the building, the insurer must send part of the proceeds to the city's designated officer:

• $2,000 for each $15,000 of the claim (and each fraction of that), or
• the amount in a contractor's signed estimate for removing, repairing or securing the building, if you submitted one by the time of the proof of loss.

The city keeps that money in a separate fund as security. It's returned to you when the repair, removal or securing is done and the officer has the required proof, no later than 60 days after receiving that proof, if the city hasn't spent anything. If the city did pay to board up, repair or demolish, those costs come out first and any remainder goes back to you within 60 days after the costs are paid. You can also submit a contractor's signed estimate after the transfer, and the city returns anything above the estimate, as long as it hasn't started the work itself. The law also lets the city and owner agree to another reasonable plan for the damaged property.

Example with made-up numbers: on a $60,000 agreed fire loss that is at least 60% of the policy limits, the hold is 4 × $2,000 = $8,000, unless a contractor's signed estimate sets a different amount.

Does this apply in Cleveland? Rule 2 applies only in cities and townships that adopted it and filed it with the Ohio superintendent of insurance. Cleveland adopted it in Cod. Ord. 3103.01(g), which names the Director of Building and Housing as the designated officer and uses the money for demolition, boarding up, repairing or securing properties. One Cleveland detail matters to sellers: under that ordinance, repair, removal or securing isn't complete until the building is demolished or can be occupied for its intended, legal use, as verified by the Director. Proceeds left unclaimed eventually go to the city's Property Rejuvenation Fund (§ 138.08). For a suburb, ask the city or your insurer; the Ohio Department of Insurance's fire loss synopsis explains the program.

Your three ways to sell

1. Repair, then sell

You settle the claim, rebuild with permits, get the city's hold back with proof, and list the house. This can bring a higher price, and it's the clearest way to meet Cleveland's "able to be occupied" standard for getting the hold back, but you carry the house, the taxes and the insurance through the rebuild, and you manage contractors. Our post on selling a house with unpermitted work explains why permits matter when you sell.

2. Sell as-is after the claim settles

You take the insurance money (minus any taxes and hold), then sell the damaged house. Ask your insurer and the city how the hold is released if the house is sold rather than repaired, and get the answer in writing.

3. Sell as-is with the claim still open

Possible, but it raises a question to settle up front: who keeps which insurance proceeds after the sale. Read your policy, tell your insurer you're selling, and have an attorney or your title company put the answer in the purchase agreement. If you have a mortgage, the lender may also have a say in how proceeds are paid.

Checklist before you sign anything

1. Secure the house. Board openings and keep people out. If the city has to do it, its costs can come out of the hold.
2. Get the fire report and your claim number and keep every letter from the insurer.
3. Request the treasurer's certificate so you know what taxes come off the top.
4. Ask whether the 60% rule applies to your claim and how much is being held.
5. Get a contractor's signed estimate for repair, removal or securing; it can set or reduce the hold.
6. Collect city letters (violation, condemnation, board-up). See selling a house with code violations.
7. Plan your disclosure. Ohio's residential property disclosure law (ORC 5302.30) covers most sales of one- to four-unit homes; describe the fire and the repairs honestly.

Mistakes we see

• Expecting the full settlement and finding back taxes taken out.
• Forgetting about the city's hold and never filing the proof to get it back.
• Signing a sale with an open claim and no written deal on who keeps the proceeds.
• Leaving the house open, which invites more damage and city costs.

Selling a fire-damaged house to ACC

ACC Solutions buys houses in any condition across Cleveland and Cuyahoga County, including houses with fire, water or mold damage. No realtors, no fees, no commissions, no repairs or cleaning, and you pick the closing date. Tell us the address, where the insurance claim stands and any city letters, and we'll talk through how the tax and hold steps fit your sale. Asking for a cash offer is free and carries no obligation. Start at We Buy Houses Cleveland, or see selling a house that needs major repairs and selling an inherited house.

ACC Solutions team
Phone: (216) 238-5999 · Email: support@accmgmtsolutions.com · Contact form
6545 Market Ave N, Canton, OH 44721

Frequently Asked Questions

Can I sell a fire-damaged house in Cleveland as-is?

Yes. You can sell before or after the insurance claim settles. If the claim is still open, settle in writing who keeps which proceeds after the sale.

Do delinquent taxes come out of a fire insurance claim in Ohio?

Yes, on claims over $5,000. Under ORC 3929.86, the insurer needs a county treasurer's certificate first and sends any delinquent taxes and assessments from the proceeds to the treasurer.

How much does Cleveland hold back from a fire claim?

When the loss is at least 60% of the policy limits, the insurer sends the city $2,000 for each $15,000 of the claim, or the amount in a contractor's signed estimate for removing, repairing or securing the building.

How do I get the fire-loss hold back?

Complete the repair, removal or securing and give the city's designated officer the required proof. The fund is returned no later than 60 days after the proof, minus any costs the city paid.

Does ACC buy fire-damaged houses?

Yes. ACC Solutions buys houses in any condition in Cleveland and Cuyahoga County, including fire damage, with no realtors, fees, commissions, repairs or cleaning.