What happens if a storm knocks down a tree or takes off a portion of a house prior to closing?
07/02/08 11:40 AM Filed in: Real Estate
The South Carolina Association of REALTORS® “Agreement to Buy and Sell Real Estate Residential” (Form 310 commonly called the Contract) has several provisions dealing with this type of situation.
The
South Carolina Association of REALTORS® “Agreement to
Buy and Sell Real Estate Residential” (Form 310
commonly called the Contract) has several provisions
dealing with this type of
situation.
During Hurricane season it is advisable to review storm procedures with your agents and clients.
Remember that Homeowner’s Insurance Underwriters will suspend policy writing within certain storm parameters. No insurance means no loan which means no closing.
Realize that a big storm can delay closings for very long periods of time. Storm damage may impact the property. Delays may also be caused by the law firm not having power (no computers) or having their office damaged.
Paragraphs 4 and 15 delineate how to handle the issue contractually.
Paragraph 4 Possesssion:
“The Property, including but not limited to, landscaping and lawn, shall be maintained in the same condition from the effective date of this agreement until possession is delivered, ordinary wear and tear excepted.”
So if a storm changes the condition of the property, the Seller will find it impossible to comply with this section of the contract.
Paragraph 15 Risk of Loss or Damage:
“In case the property herein referred to is destroyed wholly or partially by fire or other casualty prior to delivery of deed, Buyer and Seller shall have the option for ten (10) days thereafter of proceeding hereunder, or of terminating this agreement.”
So if a storm damages the property in a significant way, both parties have the unilateral of terminating the contract. (Either can escape).
Before your client tries to escape a contract, please advise them to speak with their attorney to avoid being sued for breach of contract.
Whether your client heeds this advice or not, it will insulate you from any client lawsuit claiming they were damaged because you did not tell them to see their attorney before terminating their contract.
Any questions: LegalHotline@SCREALTORS.com 800-233-6381 or 803-772-5206.
During Hurricane season it is advisable to review storm procedures with your agents and clients.
Remember that Homeowner’s Insurance Underwriters will suspend policy writing within certain storm parameters. No insurance means no loan which means no closing.
Realize that a big storm can delay closings for very long periods of time. Storm damage may impact the property. Delays may also be caused by the law firm not having power (no computers) or having their office damaged.
Paragraphs 4 and 15 delineate how to handle the issue contractually.
Paragraph 4 Possesssion:
“The Property, including but not limited to, landscaping and lawn, shall be maintained in the same condition from the effective date of this agreement until possession is delivered, ordinary wear and tear excepted.”
So if a storm changes the condition of the property, the Seller will find it impossible to comply with this section of the contract.
Paragraph 15 Risk of Loss or Damage:
“In case the property herein referred to is destroyed wholly or partially by fire or other casualty prior to delivery of deed, Buyer and Seller shall have the option for ten (10) days thereafter of proceeding hereunder, or of terminating this agreement.”
So if a storm damages the property in a significant way, both parties have the unilateral of terminating the contract. (Either can escape).
Before your client tries to escape a contract, please advise them to speak with their attorney to avoid being sued for breach of contract.
Whether your client heeds this advice or not, it will insulate you from any client lawsuit claiming they were damaged because you did not tell them to see their attorney before terminating their contract.
Any questions: LegalHotline@SCREALTORS.com 800-233-6381 or 803-772-5206.