In the last few months the term “force majeure” started popping up everywhere. Meaning “superior force,” it’s a clause found in contracts. It refers to unexpected events, like war, fire, earthquakes, and terrorist acts. In short, a force majeure is an unforeseen disaster that affects the execution of a contract. In real estate, you are more likely to come across “corona clauses” and an addendum that’s been added to cover circumstances related to COVID-19.
“Corona Clause” Language
Not all contracts incorporate the coronavirus addendum, which can offer protection for both the buyer and seller in the event of issues that arise due to COVID-19. Here are some elements the addendum addresses:
- Unforeseen Coronavirus Circumstance
- This refers to any changes in the Purchase and Sales Agreement because of Coronavirus.
- Notice of Unforeseen Coronavirus Circumstance (NUCC)
- If either party wants to back out of the purchase or sale of a home because of an Unseen Coronavirus Circumstance, they must give notice. As part of this notice they must show proof of that unforeseen circumstance. Once the NUCC has been given, the parties must choose to end the purchase process or extend its timing.
Can I Still Sell or Purchase a Home Right Now?
Yes, of course! A Coronavirus addendum is optional and you may not even come across it when selling or purchasing a home. However, it’s a good idea to address Coronavirus contractually. This helps protect both you and any other parties that are involved.
Our latest market report for Long Beach shows we are currently in a strong seller’s market and many homes are receiving multiple offers! If you want to learn more about corona clauses, or how COVID-19 affects real estate, please reach out and let us know. We are committed to helping you sell or buy a home safely and effectively – especially right now.
