Frequently Asked Questions About COVID-19 Addendum
Please note that, due to the extremely rapid drafting of the Coronavirus Extension Addendum to Contract and preparation of these FAQs during unprecedented times, members are encouraged to call the Florida Realtors Legal Hotline at 407-438-1409 to discuss any specific questions they may have. These FAQs are based on calls placed to the hotline over the past few days and may not completely cover each topic. Interpretation of the Coronavirus Extension Addendum to Contract will ultimately be up to a court of law based on the specific facts of each case.
COVID-19 Addendum to Contract (March 20, 2020)
A new form from Florida Realtors – the Coronavirus (COVID-19) Extension Addendum to Contract – is now live in Form Simplicity.
This form is available for use in the event the parties would like to extend certain dates or time periods as a result of COVID-19. As stated in the addendum:
“The Coronavirus (COVID-19) pandemic may cause unprecedented impacts to real estate transactions, including but not limited to travel restrictions, self-imposed and/or governmental required isolations, potential closures of offices and institutions required to fund, close and record real estate transactions, and action or inactions of a homeowners’ or condominium association.”
The form includes checkboxes with extension options for:
- Closing date
- Financing period
- Inspection period
- Title cure period
- Feasibility study period
- Due diligence period
- Homeowners’/condominium association approval
The form also includes a provision for a loan-approved buyer should things change on the lenders’ side as a result of the COVID-19 pandemic.
To view the form, log into Form Simplicity.
Frequently Asked Questions
Q: With which contracts forms can I use this addendum?
The addendum can be used with the following contracts:
- Contract for Residential Sale and Purchase (CRSP-16)
- Residential Contract for Sale and Purchase (FR/BAR-5x and the ASIS-5x version)
- Vacant Land Contract (VAC-13)
- Commercial Contract (CC-5)
Q: Do I use this form with an existing contract?
Yes. This form is designed to use with an existing contract for sale and purchase published by Florida Realtors. If the parties are putting together a new contract, the parties can build in any additional time they want by making longer than usual deadlines.
Q: Is the closing date still the last day of performance?
Yes. Although this addendum includes the option to extend the closing date, other provisions of the contract remain the same. Please keep in mind that some of these provisions may extend the closing date for reasons unrelated to COVID-19. For example, if there is a title defect, the buyer could trigger seller’s cure period, which may extend the closing date. It’s also possible that a force majeure event could trigger an extension of the closing date.
Q: Are all timeframes covered?
The form is designed to allow the parties to check one or more boxes. Only the specific timeframes elected by the parties that have not yet expired or passed will be extended.
Q: Business days or calendar days?
The calculation of time is controlled by the language of the contract the parties originally executed. Here is where parties can find the main clause(s) that deal with calculating time:
- For Contract for Residential Sale and Purchase (CRSP-16), see Paragraph 11(B)
- For Residential Contract for Sale and Purchase (FR/BAR-5x and the ASIS-5x version), see Standard F
- For Vacant Land (VAC-13), see Paragraph 11
- For Commercial Contract (CC-5), see Paragraph 3
When counting days to set a new date, please carefully consider whether the extension of any obligation under the contract also impacts the closing.
Q: Should I enter a number of days or use an exact date?
Either method works, but if you insert a number of days, we suggest you refer to the original agreement to confirm when the deadline for the new obligation will end. If the parties prefer, they could also just select a new date. No matter what, please check a box for the periods the parties desire to extend AND insert a date or number of days. ONLY the closing date section on the extension addendum has a default number of days.
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Q: What if the lender does not fund? What does the last paragraph mean?
The last paragraph amends the buyer’s obligation to close the contract when the contract is contingent upon financing and the loan approval (sometimes called a loan commitment) has been obtained. The last paragraph allows the buyer to terminate the contract and receive a refund of deposit if the lender does not fund the loan due to COVID-19 or if the buyer’s loan approval/commitment expires prior to closing.
If the buyer needs additional time to obtain loan approval/commitment, check the box to extend the period and insert a new date or number of days.
Q: When do I use the regular extension rather than the COVID-specific addendum?
- If the parties need a non-COVID-19 related extension
- If the parties want to extend performance of an obligation that has already passed or expired
- If the parties wish to extend the short-sale approval time period or date
Q: What happens if the Homeowners’ or condominium association will not timely approve the buyer?
The definition of COVID Restrictions covers complications that arise during the transaction because of an association’s actions or inactions, including approvals.
If the parties want to extend the association approval deadline, they should refer back to the original contract to find the original deadline. It’s typically located on an addendum to the contract, such as a condominium association rider or homeowners’ association rider. Parties should also consider whether the closing date also needs to be extended.
Q: If my customer sends the COVID Addendum to the other part, the other party MUST sign it, right?
No, as with any addendum to a contract, both parties must sign/agree to the terms in order for it to be effective.
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