With thousands of properties under contract in Florida, buyers and sellers are nervously asking themselves will I have to close?
The road map to this answer lies in the standard sales contract. The FAR BAR AS IS 5 Florida real estate contract (commonly referred to as the “FAR BAR AS IS”) address this very scenario in what is called the “Force majeure” clause and in the Standard G section of the contract. In summary:
- Section 5b ForceMajeure: Says that if “services essential to closing”are not available i.e. insurance, utilities ; Refer to Standard G
- Standard G : Says closing can be extended up to 7 days after these services essential to closing are made available. If more than 30 days has passed beyond the closing date and services are still not available, either party may terminate the contract and be released of their obligations under the contract.
What if the property is destroyed or needs repairs? Buyers and sellers need to consult with their legal counsel prior to making any decision to cancel the contract. They should not assume that they are not obligated to close. Buyers and sellers may be under obligation to perform on the contract and need to consult legal counsel prior to making any decisions.
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Legal disclaimer: The Closing Company, Inc. and blog post is not a law firm and is not providing legal or tax advice. For legal advice, please consult with a licensed Attorney. For tax advice, consult with a CPA.