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Buyers and sellers dealing with ‘COVID’ addendum

March 27, 2020
By ERIC FEICHTHALER - Real Estate Law , Cape Coral Daily Breeze

Dear Mr. Feichthaler,

I signed a contract to sell my house in Cape Coral back in February, and the closing is scheduled for next week. The buyers planned to move in and make it their primary residence, and were getting a conventional loan and mortgage.

Their Realtor sent a "Coronavirus (COVID-19) Extension Addendum to Contract," signed by the buyer, that extends the closing date for 30 days. I want to be reasonable with everything going on, but I also really need to have the house sold so I can move back to Ohio to be near family. Do I even have a choice to extend under the circumstances?

- Jennifer S.

Dear Jennifer,

Due to the evolving situation with the pandemic, there are few areas where we can state, with certainty, the exact rights and obligations of parties to a contract. As noted in my response last week, and the first place to look in any contract matter, is the contract itself. You likely signed the standard "As-Is" contract, which addresses all of the components of the agreement. I wrote last week about how the "Force Majeure" clause may impact contracts during the crisis.

However, the "COVID" addendum that many Realtors are distributing is very interesting and can have a profound impact on sellers. In addition to the clauses that extend various times in the contract, like the closing date in your case, there is a final clause in this addendum that is problematic. It states that all other terms of the original contract remain in place, EXCEPT "if the terms/conditions of the loan approval expire or lender refuses to fund the loan due to COVID Restrictions, then buyer may cancel this Contract" In addition, the full amount of the deposit would be refunded to the Buyer.

If you read my column often, you know I always try to have parties to real estate transactions work out their differences informally, and attempt to be reasonable, as I know you want to be. However, for anyone currently involved in a real estate transaction, it is recommended to seek legal counsel before signing anything relating to the pandemic, particularly the legally-untested COVID addendum.

As a footnote, many of my clients are asking about whether all of the professional services needed for a real estate closing are still functioning, including our firm for title, the county clerk and lenders to name a few. We have not seen any cancellations as a result of the virus at our firm, and we continue to work with lenders and other service providers. If you are involved in a transaction currently, it is highly recommended you communicate with your Realtor and closing agent to ensure your transaction is proceeding forward. We even conducted our first "drive-thru" signing this week in our parking lot to accommodate our clients.

I also want to acknowledge all those that are working to keep us healthy, notably our nurses and entire medical profession, including our lab technicians. Also thanks to those workers at our local supermarkets and pharmacies that are working tirelessly to make sure we have what we need. Our entire community is adapting to the situation, and I am confident Cape Coral will emerge from this stronger than ever. Stay healthy Cape Coral!

Eric P. Feichthaler has lived in Cape Coral for over 30 years and graduated from Mariner High School in Cape Coral. After completing law school at Georgetown University in Washington, D.C., he returned to Southwest Florida to practice law and raise a family. He served as mayor of Cape Coral from 2005-2008, and continues his service to the community through the Cape Coral Caring Center, Cape Coral Historical Museum, and Cape Coral Kiwanis. He has been married to his wife, Mary, for over 18 years, and they have four children together. He earned his board certification in Real Estate Law from the Florida Bar. He is AV Preeminent rated by Martindale-Hubbell for professional ethics and legal ability, and is a Supreme Court Certified Circuit Civil Mediator.

Mr. Feichthaler can be reached at eric@capecoralattorney.com, or (239) 542-4733.

This article is general in nature and not intended as legal advice to anyone. Individuals should seek legal counsel before acting on any matter of legal rights and obligations.

 
 
 

 

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