COVID-19 – Impact on Existing and Prospective Real Estate Transactions
Uncharted waters – we are all sailing in unchartered waters as the effects of COVID-19 impact our health, our business dealings, our government, our net worth, and our daily lives. And none of us knows what might happen from day to day or how long this crisis might last. In our transactional real estate practice, we are already dealing with multiple situations impacted by this new reality. We share the information and observations that follow to offer useful insights to our clients. Existing Contracts The overarching word that captures many of the issues spawned by the virus is “deadline.” Whether it is a closing date, the end of a due diligence period, the date by which a contingency such as the receipt of approvals or financing must be obtained, or the date of final delivery of a construction project, deadlines that were negotiated and commercially reasonable when agreed upon may no longer be possible to achieve. Government offices are shut down, and many professionals, consultants, and tradespeople are staying home. Deliveries of supplies are interrupted. In some counties, it is not possible to run title searches or record instruments such as deeds or mortgages due to the closing of recording offices (although e-recording is available in some locales). We believe defaults – and many of...