A Legal Update on Coronavirus Pandemic Featuring: Margy Grant, Florida Realtors® CEO and Juana Watkins, Florida Realtors® Vice Presicent of Law and Policy and Legal Counsel TRT: 11minutes 21 seconds Video Transcription Margy Grant Directly addresses camera: Greetings from Florida Realtors. The Corona Virus is probably the most challenging obstacle many of us have encountered in our lifetimes. As all of us contend with this new normal, I wanted to provide a quick update on the status of the products, tools and services from Florida Realtors.  We are open for business and I am happy to report that the Tech helpline, legal hotline and form simplicity are operating at normal levels, actually the phone lines are busier than normal. Your state Realtor association wants you to know we are here as a resource as you continue your work to help consumers buy, sell and rent real estate in Florida. Florida Realtors has worked with our team in Tallahassee and yesterday received a copy of an order from the Secretary extending the license renewal deadline for 30 days.  Further, our education department is working with the Florida real estate commission to offer continuing education classes completely online to eliminate your need to travel. As Realtors you will continue to do what you do every day as advocates in your communities, you just will do it differently.  We encourage you to frequently monitor information from the Center for Disease control as the information changes daily.  Currently it is recommended that no more than 5 people congregate in the same place at the same time.  We have heard from many of you with questions about pending and potential real estate transactions and how the corona virus impacts the contracts in these situations. Here is Florida Realtors General Counsel Juana Watkins to address your questions.   Juana Watkins directly addresses camera: Thanks Margy. The legal landscape for COVID 19 is changing daily. Because of that, the legal analysis for these issues could easily change – in very rapid and drastic ways – as this pandemic unfolds and eventually resolves. All of the questions we receive on the hotline require a case by case, very factually specific analysis. COVID 19 does not neatly fit into any particular legal box. That means the facts of your transaction may not fit in any box either. We strongly encourage all parties to negotiate and work in good faith to reach a friendly resolution of any issue they encounter. This is especially crucial when confronting legal issues that don't have clear answers, since one (and often both) sides may suffer if they can't work out a solution. Parties are always welcome to amend their agreements and find a reasonable solution for any problem they encounter, whether it's an extension, modification, or, when necessary, termination. So let's talk about some of those issues. 1. Contract Clauses As a starting point, if people have specific issues, they should review their contract or lease to see if any existing clauses address their situation. For example, let's say a buyer's lender will not issue a loan approval by the loan approval deadline, since the lender finds itself short-staffed during this tumultuous time. If the parties are using a Florida Realtors/Florida Bar form contract (and if, for some reason, buyer and seller can't agree to extend the loan approval deadline), the financing contingency in paragraph 8 gives buyer the option to write to the seller either terminating the contract or waiving the financing contingency and moving forward towards closing as something akin to a cash buyer. If the seller is unwilling to offer an extension to the loan approval deadline, the buyer should make one of these two choices- timely terminate the contract or waive the financing contingency. * While that example deals with the financing contingencies, the parties may experience COVID 19 related difficulties with inspections, appraisals, closing and other contractual obligations, if service providers for those obligations are personally or professionally also impacted by COVID 19. * 2. Property Access Issues We are also getting questions regarding property access. Some tenants are barring the door to landlords who want to show the property or conduct inspections or repairs. Some owners aren't comfortable hosting open houses or allowing showings. While virtual tours and other compromises may help alleviate some of this distress, what are the rules? When it comes to tenants, The Florida Residential Landlord Tenant Act provides that the tenant shall not UNREASONABLY withhold access when the landlord wants to show the property, make certain repairs, or inspect the premises. Would the coronavirus be an acceptable reason to deny access? This is ultimately a question for a court to determine. But if a tenant can point to a specific order or recommendation from a local, state, or federal government agency, such as orders related to social distancing or quarantine, the tenant's argument will become much stronger. * When it comes to sellers, they likely owe access to both the listing brokerage company and the buyer. The listing agreement obligates a seller to “provide Broker with keys to the Property and make the Property available for Broker to show during reasonable times.” Similarly, the seller is obligated to the buyer under a Florida Realtors/Florida Bar contract to “upon reasonable notice, provide utilities service and access to the Property for appraisals and inspections, including a walk-through prior to closing.” Would coronavirus be a legitimate reason to deny access here? Now we've found the center of most of our calls. Many people want to know when an otherwise clear obligation, like making the property available for showings, inspections, and appraisals, can be overridden by a more pressing concern like the current pandemic. * 3. Nonperformance This brings us to the third category of calls- non-performance of contractual obligations. People often use the words force majeure to describe situations where obligations may be temporarily waived. This is one possible legal doctrine to consider, although other legal theories, like impossibility and frustration of purpose could also come into play. These legal theories present more questions than answers. In other words, these theories don't create a list of acceptable vs. unacceptable excuses to avoid performance. Instead, they prompt someone to tell their story. Why, exactly, was a party unable to do something they were otherwise obligated to do? What SPECIFIC circumstances prevented them from following through? * One thing these legal theories have in common is that they tend to be narrowly construed by the courts. In other words, the party's answer to the question why they can't perform needs to be a very compelling one. If something is merely inconvenienced or its undesirable, that probably won't be enough. When it comes to force majeure, there are subtle differences in clauses from one contract to another, so the starting point is to carefully read every word. The Florida Realtors/Florida Bar force majeure clause will provide for an extension up to 7 days after the force majeure doesn't prevent performance, although if the force majeure event continues for 30 days beyond the closing date, either party can terminate the contract. * When it comes to COVID 19, many of the listed events can be ruled out. This is not a hurricane, a flood, extreme weather, an earthquakes, fire, war, insurrection, or other acts of terrorism. That leaves parties with just two events under the Florida Realtors/ Florida Bar force majeure clause: acts of God or unusual transportation delays. For a party to be protected, those events need to prevent performance or otherwise make it so that services, insurance, or approvals essential to closing are disrupted or delayed. Transportation delays is a self explanatory concept. This is why those facts you call and give us on the hotline matter greatly. While I am not saying force majeure will never apply, we have yet to hear a set of facts that would likely meet that legal threshold. But remember, things are rapidly changing. * What we can say, is that the party who is trying to avoid liability should do everything in his or her power to perform. The party who seeks to avoid contractual obligations has the burden of showing precisely why they were prevented from performance. For example, fear of a tumultuous stock market future is probably not good enough. Neither is fear of the disease when a closing agent has offered a reasonable way to collect signatures or other solutions to get a deal closed. * On the other hand, if someone has been placed in government-ordered quarantine in a foreign country where required closing services (notary, for example) are not available, this is a much more plausible case to argue for an extension or other method to avoid liability. If, in the future, government offices that record deeds are closed, or if other services related to closing become impossible to procure, this also could become a plausible case for someone to bring up. * The bottom line - please encourage parties to compromise and work together as often as possible. If they are unable to compromise, encourage them to seek legal counsel before attempting to avoid an obligation. Margy Grant Directly addresses camera: While we are all having to make tough decisions as a result of this fast-moving threat, Florida Realtors is standing with its members, volunteer leaders, industry partners and other stakeholders, lead by our President Barry Grooms and our entire Leadership Team. We will continue to share information and resources about COVID-19 with you through a variety of channels and resources provided by your state association. On behalf of Florida Realtors we wish you health and wellness.