COVID-19 – Force Majeure Provisions To Add To Real Estate Contracts In British Columbia

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Force Majeure Provisions to add to Real Estate Contracts: Do you need one?

 

Generally, a “Force Majeure” clause is a common clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties, such as a war, strike, riot, crime, plague (e.g. COVID-19), or an event described by the legal phrase ‘Act of God’ prevents one or both parties from fulfilling their obligations under the contract.

Before the COVID-19 Pandemic, the standard Contract of Purchase and Sale for real estate contracts in British Columbia did not include Force Majeure provisions.

Realtors, buyers, and sellers now need to consider the use of such provisions within these contracts.

The events that trigger the Force Majeure clause must be clearly defined in the clause. For example, it may not be sufficient to simply reference the phrase “COVID-19”.  It is suggested that more needs to be stated, such as:

“In this contract, a Force Majeure event is deemed to have occurred where, because of COVID-19, any of the following events make it impossible to complete a party’s obligation under the contract:

  • The closure of government offices including without limitation the Land Titles Office including the inability to register transfer or mortgage documents;
  • The closure of banks and credit unions and the inability to obtain financing, cash, credit or immediately available funds in the form of cashier’s cheques, bank drafts or official credit union cheques;
  • The inability to obtain advice from professional consultants including appraisers and engineers;
  • The inability to provide vacant possession because a tenant cannot be evicted until the Pandemic is over;
  • The closure of law and notary offices and the inability to retain and instruct counsel; and
  • The inability of counsel to close the transaction due to a lack of staff or lawyers conversant with the subject matter of the transaction;”

Such an operative clause will act as a shield for the party affected by the event of Force Majeure so that a party can rely on that clause as a defence to a claim that it has failed to fulfil its obligations under the contract.

An Operative Clause should also specifically deal with the rights and obligations of the parties if a Force Majeure event occurs and affects the transaction. In other words, should the inability to complete the transaction only continue as long as the Force Majeure event continues, following which both parties shall promptly resume performance under the contract as soon as is practicable.

 

The following is an example of an Operative Clause:

  1. Neither party is responsible for any failure to perform its obligations under this contract if it is prevented or delayed in performing those obligations by an event of Force Majeure.
  2. Where there is an event of Force Majeure, the party prevented from or delayed in performing its obligations under this contract must immediately notify the other party giving full particulars of the event of Force Majeure and the reasons for the event of Force Majeure preventing that party from, or delaying that party in performing its obligations under this contract and that party must use its reasonable efforts to mitigate the effect of the event of Force Majeure upon its or their performance of the contract and to fulfil its or their obligations under the contract.
  3. Upon termination of those Force Majeure events that have caused a party to be unable to perform, the party affected must as soon as reasonably practicable recommence the performance of its obligations under this contract.
  4. An event of Force Majeure does not relieve a party from liability for an obligation which arose before the occurrence of that event, nor does that event affect the obligation to pay money in a timely manner which matured prior to the occurrence of that event.
  5. Neither party has an entitlement or liability for:
    • any costs, losses, expenses, damages or the payment of any part of the contract price during an event of force majeure; and
    • any delay costs in any way incurred by either party due to an event of Force Majeure.

 

Heath Law LLP provides experienced legal services to realtors, buyers, and sellers. Contact us via phone or email if you require legal advice regarding a real-estate contract.

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COVID-19 – Working From Home In British Columbia – Occupational Health And Safety Policy

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COVID-19 – Occupational Health and Safety Policy: Do you have one?

Worksafe BC requires that those employers whose employees are working from home due to COVID-19 should ensure they have a basic Health and Safety Policy.

The Health and Safety Policy should contain an acknowledgment from the employee that he or she understands their role, duties, and responsibilities and that they agree to abide by the Health and Safety Policy.

The employer would also sign an acknowledgment that they acknowledge and are aware of the contents of the Health and Safety Policy.

The Health and Safety Policy should require employees to conduct an assessment of their workplace and report any possible or actual hazards to their manager or supervisor.

If any such hazards are discovered, there should be a plan made by both the employer and employee to ensure the safety of the employee.

The Health and Safety Policy should also specifically refer to the following:

  • The procedure for the employee to evacuate from the home or temporary workplace to a safe location in case of emergency; this can only be done by the employee as the employer should not access the home at this time due to COVID-19.
  • The manner in which the employee is to contact the employer in case of an emergency; identify the contact person of the employer, their office, and cell number and e-mail.
  • A statement from the employer to the employee that the employee working at home should use the same safe workplace practices that are expected from them at work.
  • A statement from the employer to the employee describing the procedure for how an employee should report a work-related incident or injury to their employer; identify the contact person of the employer, their office and cell phone numbers, and e-mail.
  • A statement from the employer to the employee that the employee should be as cognisant at home as they are at work about ergonomics; that the employee should take steps to mitigate the risk of developing a musculoskeletal injury.
  • A statement from the employer that the physical risk factors associated with an employee developing musculoskeletal injury by working at home include without limitation repetition and work posture.
  • A statement by the employer that the employee can learn more about musculoskeletal injury, assess the risk in their home, and actively take steps to reduce the risk by reading the following: https://www.worksafebc.com/en/health-safety/hazards-exposures/ergonomics

 

Heath Law LLP provides a full range of services to employers in British Columbia. If you require assistance contact Heath Law LLP by phone or email.

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COVID-19 and Parenting Time Orders

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COVID-19 and Parenting Time: What are your rights for parenting time during a pandemic?

Two recent cases from the Courts of British Columbia have discussed COVID-19’s effects on a parent’s right to parenting time.

In N.J.B v S.F., 2020 BCPC 53 (April 1, 2020) a father began denying the mother parenting time.  His justification for doing so was based on the changed landscape arising from the COVID-19 crisis and the health and safety issues arising from it. More specifically, the father asserted that the mother is unlikely to be able to comply with social and physical distancing measures and other protocols currently recommended by public health authorities.

The facts and procedural history are as follows:

The parents separated in October 2018.

After the parents separated the mother’s parents submitted a report to the Ministry of Children and Family Development (the “MCFD”) regarding the mother being unable to care for the child due to the mother’s mental health, parenting skills, and substance abuse.  This report resulted in the MCFD and the father agreeing not to permit the mother to have any unsupervised access to the child.

Over the next few months, the mother and father attended multiple Family Case Conferences, the first being on February 14, 2019, which made orders allowing for the mother to have supervised parenting time.

On March 24, 2020, the father’s lawyer sent a letter to the mother’s lawyer stating that due to concerns related to COVID-19, the mother would not be permitted to exercise her parenting time.  The father had two reason for refusing the mother parenting time.  First, given the mother’s history of mental health challenges, which appear to result in her fabricating ideas and experiencing delusions, the present COVID-19 crisis is likely to impact her mental health further, and cause her to behave in a manner that will pose a risk to the child.  Second, there are seven people who live in the mother’s home.  The father claimed that the large number of people residing in the mother’s home will increase the child’s risk of contracting the virus.

The Courts Decision:

The Court ordered compliance with the parenting order. The father was unable to point to any concrete concerns about the mother and her family’s lack of compliance with COVID-19 protocols.  His concern appears to be based on the mother’s historical, and likely ongoing, challenges with her mental health which has sometimes manifested in paranoid or conspiratorial ideas.  The court accepted that the mother’s variable mental health gives rise to concern, but that concern has been addressed by the fact that all of her parenting is supervised. The court did not find concerns in relation to the mother are any greater under COVID-19 than they were before COVID-19, and as such, ordered compliance with the parenting order.

In another case

In SR v MG, 2020 BCPC 57 (April 7, 2020) a father was denying a mother her agreed to parenting time.  The father’s reason for denying parenting time was due to the mother being a licenced practical nurse.  He believed that her exposure as a nurse to the COVID-19 virus would create undue risk for their child.

In considering a multitude of factors, the Court found the mother to be entitled to her parenting time despite the father’s concerns.  While there was some risk that the mother would catch the virus, it was appropriately mitigated by the mother abiding by the precautions placed upon all front-line workers.

The Court noted that if the child was particularly vulnerable, it would not expose the child to even the slightest risk.

Conclusion from the two cases:

Using COVID-19 as a rationale for not complying with parenting time orders is not prima facie accepted by the Courts.  The parent withholding the child from the other has to supply the Court with concrete evidence which shows that the child is either particularly more vulnerable to COVID-19 or the other parent has created undue risk for the child by disregarding COVID-19 protocols.

 

If you think you may have cause to deny a parenting order due to safety concerns during Covid-19, or if your parenting time is being denied and you would like to discuss your options, call Heath Law LLP or email us.

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