Hurricane Season Has Begun! Are You Ready?
Can you believe it’s already hurricane season? It only seems like yesterday we were wishing good riddance to Irma! That’s not even to mention the seemingly never ending rain we had in Orlando in May… and don’t even get me started on how it apparently still wasn’t in the Top 10 wettest on record!
Whether you’re a weather fan or not though, it’s safe to say hurricane season presents some extra obstacles we have to be aware of. With that in mind I wanted to discuss how best to equip yourself for the season ahead.
What’s in “The Box”?
While it’s also a very memorable movie quote, “The Box” in question actually refers to an area covering approximately 16,000 square miles which includes Florida, some adjacent states and extends into the Atlantic Ocean. If a named tropical storm or hurricane enters this area it may become difficult to obtain Homeowners Insurance until the storm has passed. Insurance companies will generally suspend binding coverage, although some may suspend for shorter periods than others. With the impact and destruction any individual hurricane an unknown quantity it is easy to understand why insurance companies prefer to be cautious.
Each insurance company has their own underwriting procedure so when you have a closing that may be affected it is always advisable to reach out to them directly to discuss your options. While weather may not be your chosen specialized subject, becoming an expert on the forecast during hurricane season can definitely help you stand out from the pack. Your clients will hopefully not blame you personally for causing a hurricane… but you can definitely pick up some extra points by preparing them for how a hurricane could affect their closing.
If a hurricane does hit
We certainly hope this season is very quiet with a slight gust being the most we have to speak about… but let’s face it, it’s best to be prepared! One of the easiest solutions you can have in place is to be sure your Title Company takes the risk as seriously as you.
Irma was a great illustration of the benefits of finding a ‘Goldilocks’ Title Company – that sweet spot where the company is large enough to support you but small enough to adapt to your specific needs. With five locations throughout Central Florida, The Closing Agent’s resources and Disaster Recovery plan ensured Irma’s impact was minimal. I discussed this at the time in a Press Release that was distributed after the storm passed. Darryll Clark (VP – Operations) commented that he was “very proud that even when losing power in two of our offices we were able to reopen after the curfew was lifted and get to work helping our clients.”
Even aside from the obvious factors of providing a location to close at, it’s equally important to find a Title Company who will be available to help troubleshoot the unforeseen issues that a hurricane can present. In the case of The Closing Agent you can be assured of support from our staff attorneys as well as the option of conducting a video closing! When your clients are worried about the effects of a potential hurricane, what better way to display your value than being able to offer the option of closing wherever they may be! If a hurricane leaves them stranded and not able to get back to Florida they’ll still be able to close on time!
Another benefit of continuing business as usual in the wake of Irma was being available to our clients. After the curfew lifted we began fielding many questions and as a result created a blog post on some useful advice. While the full post is definitely worth a read, I wanted to highlight a couple in particular.
Q: DOES FORCE MAJEURE ALLOW FOR THE INSPECTION TO BE DELAYED?
A: Force Majeure is governed by Standard G of the Contract (2017 FR/BAR “AS IS” Residential Contract for Sale and Purchase). Force Majeure means: hurricanes, floods, extreme weather, or other acts of God…which by exercise of reasonable, diligent effort, the nonperforming party is unable in whole or in part to prevent or overcome. If it’s determined that Force Majeure applies, the Parties shall not be required to perform any obligation under the Contract so long as performance or non-performance or the availability of services or required approvals essential to Closing cannot reasonably or diligently be procured. Under this standard, the Closing Date will be extended a reasonable time up to seven (7) days, after the Force Majeure no longer prevents performance. So, a lack of power to the Property would likely prevent performance under the Contract and would likely constitute a Force Majeure.
Q: WHAT IS “ESSENTIAL” FOR CLOSING?
A: Under Paragraph 5(b), Closing will be extended if Force Majeure causes “services essential for Closing to be unavailable.” Services essential for Closing is not defined in the Contract 2017 FR/BAR “AS IS” Residential Contract for Sale and Purchase); however, the Contract does state that availability of utilities is essential.
And there we are… the end of another post. We’ll all have our fingers crossed that this hurricane season is sunny skies, sunbathing on the beach and picnics in the park! If we experience a replay of last year though, you’ll know where to find us! Open and ready to assist you and your clients!
Until next time, remember, whenever arranging a closing, always look Beyond Title® with The Closing Agent!
David J. Hollamby
Vice President – Marketing