In light of the Covid 19 crisis, many parties are concerned about whether or not their real estate deals will be able to complete. What happens if the banks close? What happens if the Land Title Office shuts down, or my lawyer’s office has to close? Or what if I’m ordered into quarantine?
Many real estate lawyers and Realtors are considering adding a clause to their contracts to deal with the worst case scenario. It may be worthwhile to discuss adding a clause to your contracts, for example:
In the event the parties are incapable of completing their obligations pursuant to this Contract, as a result of a governmental order, a quarantine order, a land title office closure, or a closure of banking institutions, as a result of the Covid19 crisis (the “Event”), the parties mutually agree, upon written notice to the other side of such Event, to extend the Completion, Possession, and Adjustment dates by 30 days, or the next following business day, and time shall remain of the essence. The parties agree to use all commercially reasonable efforts to complete the transaction on time.
We cannot be certain that this crisis will be resolved within 30 days, however, careful thought should be given before extending indefinitely. It may be that a 60 day extension is more reasonable. However, the longer the Covid19 restrictions are in place, the less likely some parties may be able to afford to complete a home purchase. In the event the restrictions are still in place after 30 days, the parties would then have to negotiate the next steps.
If you have a real estate deal scheduled to close in these uncertain times, don’t hesitate to call us to discuss your options.
FH&P Lawyers LLP Welcomes Tanvir Gill to the Firm
Originally from Surrey, B.C. Tanvir obtained her Bachelor of Arts degree from Simon Fraser University before attending law school at Thompson Rivers University in Kamloops. She obtained her law degree in 2018 and completed her articles with a local firm. Tanvir was called to the Bar in 2019 and joined FH&P as an associate in July 2020. Tanvir is building a practice with a focus on residential and commercial real estate, business law and wills and estates. She is fluent in both Punjabi and Hindi. Outside of the office, Tanvir enjoys taking advantage of all that the Okanagan Valley has to offer, whether that means visiting her favourite wineries, paddle boarding or snowboarding at Big White in the winters.
DON’T JUST CLOSE YOUR DOORS (Part 3): Options for Financing
This is Part 3 of a three-part series entitled “Don’t Just Close Your Doors” in which we provide options for business owners struggling with the effects of the shutdowns and who see no option other than shutting down. In previous articles, I urge business owners not to focus on the current cashflow of the business (which is likely not great, given the state of the economy) and focus instead on the sources of potential value in their business – client lists, location, intellectual property, existing contracts, and business systems.
DON’T JUST CLOSE YOUR DOORS: Finding a Buyer (PART 2)
This is Part 2 of a three-part series entitled “Don’t Just Close Your Doors” in which we provide options for business owners who see no option other than shutting down. In the previous article, I urge business owners not to focus on the current cashflow of the business (which is likely not great, given the state of the economy) and focus instead on the sources of potential value in their business – client lists, location, intellectual property, existing contracts, and business systems. Rather than shutting their doors, we hope to encourage business owners to realize that potential value, and consider selling all, or a part, of their business to benefit from the value they have created.