By Amy Dobson | Forbes
While real estate activity has slowed down significantly as the coronavirus takes hold, it hasn’t screeched to a halt completely. There are still some buyers out there who are willing to purchase homes based on virtual tours or who have already identified the location they want to live in and if a home comes on the market that was built recently (which suggests it is in good enough condition) they might waive the option to visit it in person. But even though there is still some demand, the economic impact of coronavirus is still too much of an unknown for some buyers to fully commit to buying a home. As a way to mitigate the risk, but still keep some activity flowing, many state real estate associations have released ‘corona clauses’ to be added to existing real estate contracts.
In most cases these allow for extensions of dates for escrow or settlement due to ‘unforeseen circumstances’ and if the unforeseen circumstances lead to the dates being missed there is an escape clause that lets either party walk away from the contract. As one example, the addendum for the Arizona Association of REALTORS states ‘upon the expiration of any automatic or agreed extension, either party may terminate this Agreement in writing without any further liability to the other party, and the Earnest Money shall be released to Buyer.’
“Parties must become aware of how Covid-19 -related closures could affect their transactions. Rose Law Groups is advising clients on these risks and we have been incorporating appropriate contingencies in our client agreements to mitigate these risks.” ~ Cameron Carter, Rose Law Group partner and Transactional Department Director
