Laura Goode and Megan Naioti co-authored an article in Development Magazine about the importance for developers, buyers, and sellers to draft strong casualty and force majeure provisions for commercial properties in light of recent natural disasters. 

"For real estate developers, buyers and sellers, there is a crucial period after a contract is signed for a commercial property but before the closing takes place," Laura and Megan wrote. "Storms like Helene and Milton serve as important reminders about often-overlooked tools that can help mitigate the risks associated with potential damage to commercial properties during sales. Whether purchasing or selling a property, it is essential to review the purchase and sale agreement closely, paying particular attention to the casualty and force majeure provisions."

"A casualty or risk of loss provision, as the name suggests, addresses which party bears the risk of loss when the property is damaged," they continued. "A force majeure provision addresses the impact to the parties' performance obligations under a contract upon the occurrence of events outside of the control of the parties, including natural and human-made events such as wars, strikes or civil unrest."

"These provisions are crucial in clearly defining who bears the financial responsibility for property damages and under what circumstances a party’s obligation to fulfill the contract may be excused or delayed," Laura and Megan wrote. "Drafting strong provisions before calamity strikes can help avoid confusion, uncertainty and unnecessary conflict during what is likely to be a stressful time."

To read the full article, click here: Mitigating Risk Ahead of the Storm

Development Magazine is the quarterly magazine published by the Commercial Real Estate Development Association and reaches leading commercial real estate practitioners across North America.