The short answer is, if it is not in the contract then it is not your responsibility.
The longer answer depends on how much you have invested into the property and how much you want to actually own the property at some later date. Do you want to lose the house due to not having insurance, which is a violation of the current mortgage on the property, and could result in lender placed insurance and/or foreclosure. The same goes for non-payment of property taxes, which are also required to be kept current by the lender. Of course, if there is no mortgage on the property then you can always take the chance that home won't burn down and that your contract specifically states that when the property is transferred to you it will be done so free and clear of liens.
Hopefully you have a Real Estate Consultant that helped you negotiate the deal and can help you negotiate this new wrinkle. Unfortunately too many people enter into a rent to own or lease options without consulting a Real Estate Professional and/or an attorney and this is one of the resulting problems. Questions like this just seem to slip through the cracks because no one thought of them when the entered into the agreement. The seller was looking to get out from a bad situation and the renter / soon to be owner is thinking they are getting a smoking deal. It looks more like you might have gotten a smoking gun.
If you are not working with a realtor and need a referral to a good real estate attorney, please feel free to contact me.
Shel-lee Davis BRE #01817412
Real Estate Consultant
International Real Estate Specialist - IRESÂ®
Senior Real Estate Specialist - SRESÂ®
Certified Home Seller Advisor - CHSAÂ®
Certified Home Buyer Advisor - CHBAÂ®
Member - National Association of Certified Expert Advisors - NAEA
Certified Distressed Property Expert - CDPEÂ®
RE/MAX Estate Properties
As a practical matter, you need insurance to protect against loss. I don't know how much into this property you are, but if you put 10% down and have a few thousand above that from the rent-to-own thing, you need to make sure the property is insured. And if the taxes aren't paid and the county forecloses? C'mon!
But - before you surrender - talk to your attorney.