Force Majeure or “Acts of God” like Hurricanes
What to do if a major storm or hurricane is headed your way while you are under contract?
Great news, the Florida standard real estate contract known as the FloridaRealtors/FloridaBar-ASIS-5x contains a force majeure clause. This clause protects the transaction, ensuring that all parties are granted the time they need to close and that the buyer will receive the same home they expected, not one missing a roof!
Force Majeure Provisions
There are basically two provisions in the FarBar Contract that address the current situation. They are Paragraph 5 (b) and Paragraph 18 G, respectively.
More specifically, Paragraph 5 (b) states:
If an event constituting “Force Majeure” causes services essential for Closing to be unavailable, including the unavailability of utilities or issuance of hazard, wind, flood, or homeowners’ insurance, Closing Date shall be extended as provided in Standard G.
Standard G under Paragraph 18 of the Contract is the Force Majeure provision. It states:
Buyer or Seller shall not be required to perform any obligation under this Contract or be liable to each other for damages so long as performance or non-performance of the obligation, or the availability of services, insurance, or required approvals essential to Closing, is disrupted, delayed, caused or prevented by Force Majeure. “Force Majeure” refers to hurricanes, floods, extreme weather, earthquakes, fire, or other “acts of God”….which, by the exercise of reasonable diligent effort, the non-performing party is unable as a whole or in part to prevent or overcome.
According to Paragraph 18 G, all time periods, including the Closing Date, will be extended a reasonable time up to 7 days after the Force Majeure no longer prevents performance under the Contract, provided, however, if such Force Majeure continues to prevent performance under the Contract more than 30 days beyond the Closing Date. Either party may terminate the Contract by delivering written notice to the other, and the Deposit shall be refunded to Buyer, thereby releasing Buyer and Seller from all further obligations under the Contract.
Additionally, keep in mind the Seller must still comply with the Maintenance Requirement under the terms of the Contract (See Paragraph 11 of both the FarBar As-Is and Repair Contracts). Further, the Risk of Loss provision (See Paragraph 18 M) is still in play.