COVID-19 and Real Estate Contract Force Majeure Clause
In light of the Covid-19 pandemic, does the Force Majeure clause allow a Seller or Buyer to back out of a Florida residential real property contract?
Whether you are a Buyer or Seller, numerous contracts will be canceled or delayed due to the Covid-19 pandemic. In many instances, one of the parties will argue that the Force Majeure clause relieves them of the duty to perform. We believe interpretation of this clause will lead to a great deal of litigation in the Florida courts.
The predominant contract in use in the State of Florida for residential transactions is the Florida Realtors/Florida Bar (FAR/BAR) contract. The Force Majeure provision provides that the Buyer or Seller shall not be required to perform under the contract if the closing is disrupted, delayed, caused or prevented by Force Majeure. Force Majeure is defined as hurricanes, floods… “other acts of God”… “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. The question, therefore, would appear to be whether the Covid-19 pandemic is an act of God or an act of terrorism.
There does not appear to be any definitive law in the State of Florida on this issue at the present time. As such, the courts will undoubtedly be flooded with cases as this issue is vetted. Whether you are a Buyer or a Seller, Gibbons | Neuman can assist you in navigating this highly uncertain issue.
In addition, the FAR/BAR contract provides that the parties must attempt to resolve the case through mediation before litigation is filed. Rod B. Neuman Esq. and John R. “Jack” Bello, Jr., Esq. are Florida Supreme Court Certified Circuit Court mediators and can assist you in the resolution of your real estate dispute, before it goes to court. Both Rod and Jack are experienced in handling virtual mediations using the Zoom platform. Feel free to contact us (813-877-9222 or www.gibblaw.com ) if you have a real estate dispute.