Hurricane Trees When purchasing and selling a house damaged by a hurricane or other disaster, there's a provision called "Force Majeure" that outlines how a buyer and seller move forward in the case of a home that is already under contract for purchase. Here's a summary of the key points from the latest Florida Realtors/ Florida Bar: AS/IS Sale and Purchase Contract, revised in June 2019.

What is Force Majeure?

Force Majeure (meaning superior force) is an automatic extension of the contract that comes into play when a dramatic unusual or unplanned event prevents a property from closing. This clause is triggered in some of the following examples, such as "hurricanes, acts of God, and acts of terrorism." Once the clause is triggered, specific time periods of the contract, such as the closing date or inspection period, will be extended for a reasonable time up to 7 days after the force majeure event no longer prevents the parties of the contract to close the sale. Either party may terminate the contract by delivering written notice if force majeure continues to prevent performance more than 30 days beyond the closing date.

Access to the Property to Conduct Appraisals, Inspections, and Walk-Through

After the hurricane or event passes, a buyer usually wants to take another look at the property, regardless of whether the buyer is still in the inspection period. This clause generally favors the buyer's request, and provides that the seller shall provide access within reasonable notice, and provide that utilities be connected for such inspections prior to closing.

Risk Of Loss - What Happens If Damage Is Discovered?

In the case of property damage, then the Risk of Loss paragraph comes into play. If the cost to restore the property is equal to or less than 1.5% of the purchase price (this includes the cost to prune or remove damaged trees), then the cost is a seller obligation. If the restoration isn't complete prior to closing, the seller will hold back in escrow until completed, a sum equal to 125% of the estimated cost to complete the restoration.  But - If the cost to restore the property is greater than 1.5% of the purchase price, then the buyer has the option to either take the property along with the 1.5% of the purchase price, or receive a refund of the deposit, releasing the buyer and seller from all further obligations under the contract.

These are the provisions that are automatic in the contract, however, the buyer and seller may choose to amend the contract and come to a separate agreement besides what is outlined here in the AS-IS contractual language. 

Damage To Rental Properties: Section 83.63 of the Florida Landlord/ Tenant Act:

This section provides a clause for rental properties that are damaged or destroyed. In a case where "the enjoyment of the premises is substantially impaired, the tenant may terminate the rental lease and immediately vacate the premises." Another option is that the tenant vacate part of the premises that is unusable by the casualty, in which case the tenant's rent shall be reduced by the fair rental value of that part of the damaged property. 

Fortunately we are not dealing with Hurricane Dorian, but this is always good information to keep in mind when selling or buying a property.