It’s no secret that the COVID-19 epidemic is affecting virtually every sector in some way, shape, or form. The real estate sector is no exception. Although the modern real estate world has slowly moved away from face-to-face deals, there are still aspects of real estate that require some type of face-to-face contact.
How do we keep moving forward while remaining safe and healthy?
With most banks, law firms, and offices closing up to the general public, you may be wondering how to fulfill the time constraints of your contract and how a deal can be closed. In our downtown Fort Myers office, we have set-up a drive-thru conference room for signings.
Discuss the best options and next steps with your real estate attorney. Depending on the contents of your contract and individual situation, a contract extension may be the best option. However, it may also be feasible to continue to closing using the proper resources.
Force majeure clauses
Most real estate contracts contain a force majeure clause that establishes parameters for what happens if an event occurs that prevents fulfillment of the contract terms, such as a hurricane, flood, extreme weather, or other acts of God. Whether the force majeure clause applies to the COVID-19 pandemic depends on the language of the clause in your contract.
If you are unsure whether COVID-19 is covered under your force majeure clause, consider using the COVID-19 extension addendum that was developed by the Florida Realtors. This extension addendum is specific to COVID-19 and allows extensions to critical contract dates, such as the closing date and inspection period. This addendum is written to amend the FAR/BAR contracts, but the addendum has not yet been approved by the Florida Bar.
While extensions are feasible and may be beneficial for both parties, a remote closing may still be an option for those buyers and sellers who wish to get the deal closed. While most closings can be performed as a mail-away closing, the biggest obstacle may be finding a notary to notarize the key documents, such as the deed and the mortgage. Ask your title company or closing agent about your options. Currently, there are a couple of services that can be used, such as a mobile notary or remote online notarization, that provide good alternatives to getting documents notarized without leaving your home.
Those in the leasing industry may have a different set of concerns.
Landlords and tenants should both check the language of the lease agreement to determine respective obligations, such as which party is responsible for safety and security of the common areas of a building, and if there is an obligation to keep the public away from the premises during this time.
Landlords may consider issuing safety guidelines for tenants, such as including hand sanitizer in high traffic areas and ask tenants to limit or restrict public access.
In this time of uncertainty, the health of yourselves and others should be a top priority. If you have any questions about the resources available to you, or would like to discuss your options, please contact our real estate department at 239-344-1100.