Dear Realtors, Clients, and Friends,
Please be aware that the Florida Realtors have just released the Coronavirus (COVID-19) Extension Addendum to Contract. This form was created in response to the global pandemic affecting real estate transactions throughout Florida. It can be used for the Contract for Residential Sale and Purchase, Residential Contract for Sale and Purchase, Vacant Land Contract, and the Commercial Contract. This addendum allows for extensions for certain dates and time periods that have not yet passed or expired, which include the following:
· Closing Date
· Financing Period
· Inspection Period
· Title Cure Period
· Feasibility Study Period
· Due Diligence Period
· Homeowners’/Condominium Association Approval Period
Please understand that these extensions were enacted to alleviate the impacts COVID-19 has on real estate transactions. Such impacts may include: travel restrictions, governmental or self-imposed isolations, financial institutional closures, recording and governmental closures, title company or law firm closures, inactions by homeowners’ associations or condominium associations, and/or any real estate vendor-related cancellations/closures.
If you or your client are affected by any office closures or closures that hinder the ability for your transaction to move forward or close on time, it is recommended to come to a mutually agreeable extension period.
Please note that the “Force Majeure” clause in your contract may not apply to COVID-19 and your contract – so it is important that you read your contract carefully. For example, the Florida FAR/BAR Contract’s “Force Majeure” clause allows for an extension for up to 7 days after the force majeure event does not prevent performance. However, it allows either party to cancel the contract if the force majeure event continues for 30 days beyond the closing date. COVID-19 may not trigger the “Force Majeure” clause to your circumstance – reading the FAR/BAR “Force Majeure” clause specifically, Florida Realtors’ General Counsel Juana Watkins stated in an interview published March 17, 2020:
When it comes to COVID 19, many of the listed events can be ruled out. This is not a hurricane, a flood, extreme weather, an earthquakes, fire, war, insurrection, or other acts of terrorism. That leaves parties with just two events under the Florida Realtors/ Florida Bar force majeure clause: acts of God or unusual transportation delays. For a party to be protected, those events need to prevent performance or otherwise make it so that services, insurance, or approvals essential to closing are disrupted or delayed. Transportation delays is a self-explanatory concept. This is why those facts you call and give us on the hotline matter greatly. While I am not saying force majeure will never apply, we have yet to hear a set of facts that would likely meet that legal threshold. But remember, things are rapidly changing.
What we can say, is that the party who is trying to avoid liability should do everything in his or her power to perform. The party who seeks to avoid contractual obligations has the burden of showing precisely why they were prevented from performance. For example, fear of a tumultuous stock market future is probably not good enough. Neither is fear of the disease when a closing agent has offered a reasonable way to collect signatures or other solutions to get a deal closed.
On the other hand, if someone has been placed in government-ordered quarantine in a foreign country where required closing services (notary, for example) are not available, this is a much more plausible case to argue for an extension or other method to avoid liability. If, in the future, government offices that record deeds are closed, or if other services related to closing become impossible to procure, this also could become a plausible case for someone to bring up.
The bottom line - please encourage parties to compromise and work together as often as possible. If they are unable to compromise, encourage them to seek legal counsel before attempting to avoid an obligation.[1]
A Link to “Florida Realtors Legal Update on the Coronavirus Pandemic” can be found here:
We will continue to monitor any other changes impacting the real estate as they become available. As of the date and time of this publication, all e-recording counties in the State of Florida are still accepting e-recording documents. Miami Dade County’s Courthouse is closed, but they are still accepting e-recording and mail. Duval County is experiencing delays with their e-recording.
Disclaimer: This publication is for informational purposes only and is not intended to be construed as legal advice. Please note that each situation should be assessed on a case by case basis. If you or your client have a specific legal question about an issue revolving around this addendum or its impact on your transaction, it is highly recommended that you seek the advice of a licensed Florida Attorney immediately. You or your client may have continuous contractual obligations that may impact your real estate transaction.
[1]Juana Watkins, Esq., Florida Realtors® Legal Update on the Coronavirus Pandemic, Florida Realtors®, (March 17, 2020) https://www.floridarealtors.org/news-media/video-library/sharing/florida-realtorsr-legal-update-coronavirus-pandemic.