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?
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.