(TNS)—Q: I have been on a tear, damaging homes up the Atlantic coast. How does this affect people who are under contract to buy or sell a home? – Dorian (yes, that Dorian!)
A: Here in Florida, we are experienced in dealing with you and your siblings. When we get wind that you are coming to town, it becomes next to impossible to get homeowner’s insurance and financing approval, delaying most closings.
The standard real estate contract used in most closings will contain a clause dealing with the issue of a natural disaster or “force majeure.” Typically, the closing will be delayed for a week after things return to normal.
However, if the delay lasts for more than 30 days, either the buyer or seller would be able to cancel the contract. Of course, it’s important to carefully review the terms of each particular contract as it might be different from the standard.
After you leave town and power and water are back on, the buyer will need to have the home carefully inspected for damage. Generally, if the repair cost is no more the 1.5 percent of the purchase price, the seller must fix the problems, hopefully before closing. If they take longer to fix, the funds will be held in escrow while the seller keeps at it.
If the repairs cost more than that, the buyer can take the 1.5 percent as a repair credit on the closing statement and close as-is, or cancel the contract and get the deposit back.
The buyer and seller, or their real estate agents, should stay in good communication with each other, the closing agent and lender to determine what must be done to continue to closing. Everyone should stay patient and work with the process as things return to normal. In my experience, things get back on track fairly quickly, and very few deals are lost due to a storm.
Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar.
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