Buyers and sellers who are looking to move forward with residential real estate contracts, like many things in 2020, should take some special considerations into account while navigating the transaction. This year has seen some unique situations. Most notable, the current coronavirus pandemic. Those who are going through a real estate transaction or looking to buy or sell in the near future may wonder whether COVID-19 will impact their real estate deal.
The answer: it depends.
Various provisions within a real estate contract could be triggered by this pandemic. One consideration is whether or not the contract has a force majeure clause. This provision is not uncommon in real estate documents and essentially allows a party to back out of the deal due to the occurrence of certain events. Qualifying events have included riots, terrorist threats, hurricanes, sinkholes, and storms.
Realtor associations are also starting to include provisions within their standard contracts referred to as the “coronavirus addendum.” This addendum allows the buyer and seller to adjust the deadlines if certain coronavirus-related events occur. This could include the inability to travel to the home, schedule inspections or finalize lending.
These two provisions are just the coronavirus pandemic can impact some examples of how real estate contracts. The fact that groups are changing their real estate contracts and the impact of these changes make it imperative to seek legal counsel to review the documents before finalizing the deal. This conversation can help to reduce the risk of any surprises while negotiating the real estate transaction.