Knowledge Mondays - Real Estate Contracts During a Global Pandemic
Purchasing a property at any time can be a hectic process filled with bumps along the road. However, purchasing a property during a global pandemic can be hectic and frustrating as a global pandemic, like Coronavirus, can threaten your closing.
As Coronavirus continues to impact our lives and business, it is important to be informed as a buyer and seller. If as a buyer and seller you signed a standard FAR/BAR real estate contract, your contract should include a provision regarding termination or extension due to unforeseeable circumstances that prevent someone from fulfilling a contract, called “force majeure.” Typically, real estate contract provides for an automatic extension of the closing date if an event constituting a “Force Majeure” causes a closing to become impossible due to services being unavailable.
At this time, an argument could be made that Coronavirus is an unforeseeable event that impairs buyers or sellers from being able to close at their original date, especially if one of members of the contract test positive for Coronavirus. The majeure provision also provides an excuse for a party’s non-performance due to an extraordinary event or circumstance beyond the control of the parties. However, at this time, it is not clear whether this will be enough for a buyer or seller to be able to walk away from a contract and not have to pay damages due to a breach of the real estate contract.
Thus, if a buyer or seller is entering into any real estate contract, he/she should speak to their real estate agent regarding adding language concerning Coronavirus. Language concerning this global pandemic should be in regards to a party to the closing testing positive for Coronavirus and not being able to execute the contract. Adding this extra layer of protection, helps avoid a breach of contract, if any of the parties have tested positive and need to be isolated.
If you would like to discuss your purchase contract, schedule a consultation with the experienced attorneys at Alvarez Law Group today. Call us at (786) 620-2820 or email firstname.lastname@example.org to schedule a consultation.
*Disclaimer: this blog post is not intended to be legal advice. *