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Force Majeure, Escrow Terms and Rent Deferral –
What You Need to Know Now

As all of us continue to adapt to the changes brought on by the Coronavirus, AIR CRE is being very proactive in its efforts to gather and provide you with the resources you need to best serve your clients.

The three issues I’ve been asked about most often during the past two weeks are, 1) potential delays of purchase transactions that are currently in escrow, 2) tenant’s and landlord’s rights relative to Coronavirus and 3) whether or not Force Majeure language in a lease applies to the current situation.

Below are resources AIR CRE and our partners are providing to help you navigate these pressing issues:

1) Amendment to Purchase and Sale Agreement

This document allows the parties to amend their purchase and sale agreement and/or the escrow instructions as necessary, by specifying the reasons for doing so. The new agreement was made available starting Monday, 3/30/2020 in the AIR CRE Contracts app.

To access this new document, open the AIR CRE Contracts app and, when prompted, run the update. Once you have run the update, you can find the Amendment to Purchase and Sale Agreement in the Contracts Library > Purchasing Property folder.

2) Tenant’s and landlord’s rights relative to Coronavirus

To learn more about how AIR CRE’s Contracts address a tenant’s rights in light of the current crisis, Usman Mohammed of Consensus Legal, has written an excellent article on the subject. Read the article

3) Force Majeure and the Coronavirus

The real estate group at top LA law firm, Greenberg Glusker, has organized a collection of information including an article specifically addressing Force Majeure. Read the article

Access all of the information on Greenberg Glusker’s Coronavirus Resource Center

4) Rent Deferral/Reduction Amendment

We are also working to create an Amendment to Lease: Basic Rent Deferral/Reduction and hope to have this available next week. This amendment gives the landlord and tenant a number of options they can consider as a means for working out a mutually beneficial, temporary, lease modification in light of the Coronavirus.

5) Town Hall

AIR CRE is also in the process of organizing an online Town Hall meeting which will bring together CRE experts to discuss the issues listed above as well as other important issues facing the industry at this time. Look for an email next week with all the details.

Looking to take advantage of the new AIR CRE Contracts resources? If you are a Member, the software is free. Please contact our support team to get your copy.

AIR CRE Contracts Support: 213.687.8777

As always, we will continue to communicate with you as we roll out resources. I hope you and your family are staying safe during this time.

 

Sincerely,

Tim Hayes
Executive Director

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