Force Majeure And The COVID-19 Pandemic
The COVID-19 pandemic is slowly but surely reaching its middle, but the fact remains that every aspect of life has been altered during its existence. Real estate is no exception; too many transactions have been terminated or rescinded outright due to the illness or long-term incapacity of a buyer or seller. Depending on the form of the contract, you may have several different options as to how to preserve your contract and make sure the transaction goes through.
Circumstances Beyond Parties’ Control
While every real estate contract can differ depending on the nature of the property, they will always follow a relatively similar format simply because certain provisions are the most appropriate to convey the property. Because of this, most real estate contracts contain what is known as a “force majeure” clause. Force majeure is roughly defined as the occurrence of an event beyond the control of either party to the contract, which then releases the parties from liability or obligation.
While no statute in Florida explicitly includes pandemics or epidemics as an example of force majeure, it is not at all unreasonable to assume that such a clause will apply (included examples are natural disasters, wars, or unrest like acts of terrorism). Because Florida puts a high value on a person’s right to contract, a force majeure provision in a real estate contract will generally be honored by the court unless it is unconscionable. That said, it is highly recommended to use ‘catch-all’ type language, so any phenomenon that may cause a significant delay in closing on the real estate can be covered.
You Must Provide Specifics
If you are attempting to purchase real estate and have encountered a COVID-19 based delay or problem, a force majeure clause may help preserve the contract. In order to be activated, three major criteria have to be present: (1) the “force majeure” could not have been foreseen by any of the parties; (2) the event was totally beyond the parties’ control, and they did nothing to aid in its happening; and (3) the event made specific performance of the contract impossible or sufficiently impractical that it should not happen.
It is important to keep in mind that simply stating that the global pandemic made completion of your real estate transaction impossible will not be seen as sufficient by the courts – you must go into specifics; for example, if you are unable to travel, or if you are sufficiently immunocompromised as to be unable to attend the closing. It is worth noting that as Florida relaxes mask mandates and travel bans, the courts will generally find fewer reasons to uphold force majeure clauses, because the impediments to going through with the contract will simply no longer exist.
Contact A Tampa Real Estate Attorney
The COVID-19 pandemic has made us all adapt to a new normal, and this will likely continue even after the pandemic comes to an end. However, many people are still experiencing disruptions in all walks of life. If you are experiencing problems getting your real estate transaction completed, contacting a Tampa real estate attorney can help you determine how to proceed. Attorney Alicia Seward has experience in these matters, and the Seward Law Office is ready and willing to try and assist you. Call today to schedule a consultation.