COVID-19 - UPDATE - FORCE MAJEURE REAL LIFE EXAMPLE

By
Real Estate Attorney with THE ZARETSKY LAW GROUP - Board Certified Real Estate Atty and AUTOMATED LAND TITLE COMPANY
https://activerain.com/droplet/5mFs

We can't seem to even rest for 2 hours without a major escalation in the COVID-19 Pandemic affecting our lives!  No sooner did I write my latest article on Force Majeure (ACT of GOD), that I got an email from an attorney that we work with inquiring about the following facts which the email essentially states:

I had a conversation today with a buyer who is my client for a transaction that is scheduled for the end of this month.  The issue we discussed was that the condo building next store has now put in restrictions for guests coming in and out of the building, no contractors can come in or out (except for an emergency).  In my own building in Palm Beach, the board adopted measures today that are now in effect, which amongst a lot of new restrictions, also prohibit and prevent any moving in or moving out of the building. 

Assuming such a restriction comes up in my client’s deal, his seller is supposed to move out on on or before the closing date.   If the building prevents the Seller from moving out, and the contract requires that Seller give vacant and broom clean possession on the closing date, the seller will not be able to deliver vacant and broom clean possession for reasons beyond her control. Thus, a situation for Force Majeure seems to come into play. 

The Contract was written by the broker and is a standard Fla/Bar “AS IS” Residential Contract for Sale and Purchase.  The Force Majeure clause is in the standard printed form of the agreement at line 425, Paragraph 18 G (in the Standards section).  This clause defines “Force Majeure” as certain Acts of God, unusual transportation delays, or wars, insurrections, or acts of terrorism, which, by exercise of reasonable diligent effort, the non-performing party is unable in whole or in part to prevent or overcome.  It then allows time periods to perform to be extended by 7 days, and if performance still cannot be performed for 30 days, then either party may terminate and the Deposit is to be refunded to the Purchaser.  

The example given by the attorney WAS unique - but my wife was supposed to play bridge at another condo here and they are prohibiting any guests onto the property.  So it is unique no longer!  We are in a new territory of the law - which makes this exciting for us attorneys... but frightening for us as humans.

The answer now seems to be focusing on the language in the clause referencing  "certain Acts of God" and probably "wars".  War could come into play as this is being treated as a "war" on the virus by local, state and federal government.  One of the definitions of "war" in Merriam Webster (online) Dictionary is "a struggle or competition between opposing forces or for a particular end."  Isn't the government handling of movement and freedoms a tool in fighting a war against this virus?  The opposing forces are the virus against humanity.  Which will win?

As mentioned in the two previous articles, this issue is evolving ultra fast - its like a soccer game in fast forward!

What is your opinion on Force Majeure?  Are we in a state of War?

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Copyright 2020 Richard P. Zaretsky

Be sure to contact your own attorney for your state laws, and always consult your own attorney on any legal decision you need to make.  This article is for information purposes and is not specific advice to any one reader.

Richard Zaretsky, Esq., ZARETSKY LAW GROUP. ATTORNEYS AT LAW, 1615 FORUM PLACE, WEST PALM BEACH, FLORIDA 33401, PHONE 561 689 6660.  RPZ@ZARETSKYLAW.COM - FLORIDA BAR BOARD CERTIFIED IN REAL ESTATE LAW - We assist Brokers and Sellers with Short Sales and Modifications and Consult with Brokers and Sellers Nationwide www.ZARETSKYLAW.com

 

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Ambassador
4,103,510
Kathy Streib
Room Service Home Staging - Delray Beach, FL
Home Stager - Palm Beach County,FL -561-914-6224

Richard- while I'm not an attorney by any means, but (and maybe I missed something) is the seller restricted from moving out because no one can come into the building to assist them with the move?  

You're right...very interesting times. 

Mar 21, 2020 11:04 AM #1
Rainmaker
285,185
Richard Zaretsky
THE ZARETSKY LAW GROUP - Board Certified Real Estate Atty and AUTOMATED LAND TITLE COMPANY - West Palm Beach, FL
Florida Real Estate Attorney

I think it's the contractor issue of both trying up elevators when assess is supposed to be one at a time, and avoidable contact with non-residents.  Result, no movers allowed.

Mar 21, 2020 11:25 AM #2
Rainmaker
285,185
Richard Zaretsky
THE ZARETSKY LAW GROUP - Board Certified Real Estate Atty and AUTOMATED LAND TITLE COMPANY - West Palm Beach, FL
Florida Real Estate Attorney

I cant believe you're the only one commenting on this!

Mar 21, 2020 11:27 AM #3
Anonymous
Mary L

I would like your comment on a Canadian purchasing Florida real estate. Our borders are closed. No travel is allowed for the unforeseen future. Our dollar has been devalued by 20 % since this virus took hold. Would the force majuere clause be valid in this circumstance. We were to close in a few weeks.

Mar 23, 2020 10:43 AM #4
Rainmaker
285,185
Richard Zaretsky
THE ZARETSKY LAW GROUP - Board Certified Real Estate Atty and AUTOMATED LAND TITLE COMPANY - West Palm Beach, FL
Florida Real Estate Attorney

Mary - the question is from the fact you present, what is preventing you from closing?  It is costing more than you expected?  You cannot show up for signing documents? You or someone you can hire cannot inspect the unit (sounds like inspections already occurred).  None of these items seem to be preventing you from closing.

Mar 23, 2020 03:11 PM #5
Rainmaker
320,004
Dennis J. Zisa & Associates, Inc.
Dennis J. Zisa & Associates, Inc. - Camden, NJ
29 years in So. Jersey and the Greater Camden area

Very interesting post! I have been practicing real estate for 30 years, and never heard of this term. I'm wondering if it even pertains to my State of New Jersey.

Thank you for bringing this to my attention.

Mar 26, 2020 06:57 AM #6
Rainmaker
1,589,868
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

That IS interseting. I wonder what the parties on each side WANT to do? This lock down can't last forever (at least I hope not!) so perhaps they could close and pay rent until a move could happen.

As for the legal aspect - you're the attorney, not me!

Mar 26, 2020 09:03 PM #7
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Richard Zaretsky

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