Impact of the Executive Order (Legal Deadlines) on Purchase Agreements and Closing
Louisiana REALTORS • March 19, 2020
By: Patricia B. McMurray, JD and Patrick Willis, JD
Baker, Donelson, Bearman, Caldwell & Berkowitz, PC
450 Laurel Street, 21st Floor, Baton Rouge, Louisiana 70801
1. DOES GOVERNOR EDWARD’S ORDER EXTEND DEADLINES IN REAL ESTATE CONTRACTS?
Short Answer: No, it does not appear to affect legal documents such as purchase agreements.
Governor Edward's Order dated March 16, 2020, Proclamation JBE 2020-30 includes suspension of certain legal deadlines. In suspending all deadlines in “legal proceedings... in all courts, administrative agencies, and boards...”, the order does not appear to specifically encompass closing deadlines contained in private contracts between private parties, such as purchase agreements.
Louisiana citizens may contract with one another, about all subjects which the law does not prohibit. Timelines and closing deadlines contained in purchase agreements represent terms of contracts which are freely negotiable between the parties to such contracts. The failure of parties to perform within such timeframes required in the contract may result in a default of the purchase agreement[2].
2. DOES THE MANDATORY LOUISIANA RESIDENTIAL AGREEMENT TO BUY OR SELL FORM PROVIDE AN AUTOMATIC EXTENSION OF THE CONTRACT DEADLINES BECAUSE OF THE PANDEMIC?
Short Answer: No, but BUYERS and SELLERS may want to consider an amendment to the Louisiana Residential Agreement to Buy or Sell. A sample amendment is provided. This sample form is not a mandatory form.
The Louisiana Residential Agreement to Buy or Sale (“Purchase Agreement”) form does not contain an Act of God or Fortuitous Event Clause which might provide an automatic extension. In the absence of such a provision, it is possible that the Purchase Agreement could be deemed in default upon the expiration of the deadline for closing, despite the occurrence of such disaster. Generally, there is no Louisiana law that specifically grants purchasers in private contracts an automatic extension of time to perform such obligations in the event of a pandemic or natural disaster. However, the parties may certainly agree in writing to extensions of deadlines in the Purchase Agreement. Also, additional government Orders or the concepts of equity may impact the granting of additional time to complete a transaction as further detailed below.
If the BUYER and SELLER are agreeable, an amendment of the Purchase Agreement could be signed. A sample amendment with several options BUYERS and SELLERS can consider is attached. An annotated version with explanation on using the form is also attached.
3. WHAT IS AN ACT OF GOD OR FORTUITOUS EVENT?
Short Answer: It is something that at the time the contract was made could not reasonably be foreseen.
Some contracts contain provisions specifying how the contract is to be completed in the event that an “Act of God” or fortuitous event, such as war, natural disasters or pandemics occur, which prohibits the parties from completing the transaction or the obligations pursuant to the contract. Louisiana Civil Code Article 1875 specifically defines a "fortuitous event" as "one that, at the time the contract was made, could not have been reasonably foreseen." These clauses in contracts are sometimes referred to as “force majeure” provisions. It is important to remember that each contract’s “force majeure” provision can be different and may be applied differently. Reviewing the precise language of the “force majeure” provision is critical to determining whether it excuses or delays performance of the contract.
Louisiana case law has recognized war, floods, hurricanes, and even gas explosions as fortuitous events. It has also recognized "disease" as a fortuitous event as well.[3] While a "pandemic" has not been explicitly stated to be a "fortuitous event" in any Louisiana case, it stands to reason the impact of Covid-19 and accompanying governmental orders will rise to that level.
4. IS THE PANDEMIC A FORTUITOUS EVENT THAT WILL DELAY THE OBLIGATIONS DUE UNDER THE PURCHASE AGREEMENT?
Short Answer: The pandemic may not automatically terminate or extend deadlines in any contracts existing before the pandemic began in Louisiana, absent specific provisions in a contract to the contrary.
Louisiana Civil Code Article 1873 provides:
- An obligor (such as BUYER or SELLER) is not liable for his failure to perform when it is caused by a fortuitous event that makes performance impossible.
- An obligor is, however, liable for his failure to perform when he has assumed the risk of such a fortuitous event
- An obligor is liable also when the fortuitous event occurred after he has been put in default.
- An obligor is likewise liable when the fortuitous event that caused his failure to perform has been preceded by his fault, without which the failure would not have occurred.
Impossibility of performance is a rare occurrence even when a fortuitous event has occurred. A fortuitous event prevents obligor from performing his or her obligation in a manner contemplated at the time of contracting, obligor must pursue reasonable alternatives to render performance in a different manner before obligor can take advantage of the defense of impossibility.[4] Therefore, the pandemic should not automatically terminate any existing contracts, absent specific provisions in a contract to the contrary.
One such difficulty that may surface is a party becoming too ill to attend a closing or execute documents. As in other cases where a person is or may become indisposed, one solution would be to have powers of attorney in place ahead of time.
5. WILL THE PANDEMIC, IF IT TEMPORARILY PREVENTS THE PERFORMANCE OF CONTRACT ONLY TEMPORARILY EXTEND THE DEADLINES IN THE CONTRACT?
Short Answer: Maybe, it depends on the facts and the circumstances in the parish at the time.
The Civil Code does not directly address when a “fortuitous events” suspends the performance of contracts, but the Attorney General, following Hurricanes Katrina and Rita, issued an opinion to the effect that:
"As a general rule when fortuitous events … prevent timely performance of an obligation but do not make that performance impossible in an absolute sense, performance may be suspended for as long as the fortuitous event prevents it; an obligee must give reasonable written notice of the intention to demand performance after the fortuitous event to trigger abatement of the suspensive period."[5]
Thus, the argument is that the recent pandemic constitutes a fortuitous event sufficient to temporarily suspend a buyer’s performance under the terms of an otherwise valid purchase agreement. Upon the termination of the impediment, it is arguable the law would require the obligation to be satisfied as originally contemplated by the parties. This analysis and outcome of the delay requested will depend upon the facts of each transaction. Some BUYERS and SELLERS may be able to close in some Parishes. In other Parishes, if for example the Clerk of Court is closed for an extended period of time, this may not be possible.
Further, Louisiana law contains provisions such as Louisiana Civil Code Articles 2054 and 2055 that address “equity” in contracts, which is based on the principles “that no one is allowed to enrich himself unjustly at the expense of another.” These types of principles might also be applied by a Court in determining whether the performance of a contract is due, suspended, or impossible.
DISCLAIMER
Information and additional guidance and orders regarding the pandemic are being issued daily. The information is the article was last updated on March 19, 2020 at 10:30 a.m.
These materials are to be used for informational purposes and should not be construed as specific legal advice. These materials are not designed to cover every aspect of a legal situation for every factual circumstance that may arise regarding the subject matter included.
This publication is for reference purposes only and association members or other readers are responsible for contacting their own attorneys or other professional advisors for legal or contract advice. The comments provided herein solely represent the opinions of the authors and is not a guarantee of interpretation of the law or contracts by any court or by the Louisiana Real Estate Commission.
[1] Information and additional guidance and orders regarding the pandemic are being issued daily. The information is the article was last updated on March 19, 2020 at 10:30 a.m.
[2] See Louisiana Civil Code Article 2017.
[3] Strickland v. Winn, 4 La. App. 8, 8 (1926).
[4] Schenck v. Capri Const. Co., App. 4 Cir.1967, 194 So.2d 378. Payne v. Hurwitz, App. 1 Cir.2008, 978 So.2d 1000, 2007-0081 (La.App. 1 Cir. 1/16/08).
[5] Op.Atty.Gen., No. 05-0359 (November 10, 2005).
From the Louisiana Department of Insurance: During a press conference today with Governor Jeff Landry, Insurance Commissioner Tim Temple announced that registration for the next round of the Louisiana Fortify Homes Program (LFHP) will open at 8 a.m. on Monday, June 1, and will include 3,000 grants. The registration period for this lottery will be open for three weeks, closing at 5 p.m. on Friday, June 19. During the press conference, Gov. Landry signed HB 1187 by Rep. Paul Sawyer, which will allow Louisiana Citizens Property Insurance Corporation to transfer $50 million in additional Katrina bond assessment funds to the LFHP. Combined with the $30 million in funding the program will receive through taxes and fees on insurance entities, the LFHP will receive a total of $80 million this year. “By lowering overall losses, we can reduce insurance and reinsurance costs, draw more insurers into the market, motivate existing companies to write additional policies and lower insurance premiums,” said Commissioner Temple. “That is exactly what the Louisiana Fortify Homes Program is designed to do.” The list of coastal parishes that are eligible to participate is expanding to include Acadia, Jefferson Davis and Lafayette parishes. Additionally, homeowners who live in the portions of Ascension, Calcasieu, Iberia, Livingston, St. Martin, St. Tammany, Tangipahoa and Vermilion parishes that were previously not included in the program will now be eligible to participate. A map showing the full list of eligible parishes is available on FortifyHomes.La.Gov . “Louisiana is the fastest growing state in the country for Fortified roofs, and that growth is not by accident—it is the result of strong support from Governor Landry and legislators like Chairman Talbot, Chairman Firment and Representative Sawyer, targeted program design, and a clear recognition that strengthening homes is one of the most effective ways to reduce insurance losses,” said Commissioner Temple. “At the end of the day, this program is about more than just roofs. It is about protecting families, it is about strengthening communities, and it is about putting Louisiana in a stronger position—both physically and economically—to face the challenges ahead.” To participate in the lottery, homeowners must register during the June registration period. Homeowners who registered for a previous round but were not selected must register again to participate. People who register on the last day of the registration period have the same chance of being selected as those who register on the first day, so there is no need to rush to register as soon as the period opens. When registering, homeowners will need to upload their homestead exemption, insurance policy declarations page that includes wind coverage, and flood insurance declarations page if the residence is in a flood zone. Homeowners who need assistance obtaining a copy of their homestead exemption should contact their parish tax assessor. Homeowners can contact their homeowners and flood insurance companies or agents for a copy of their policy declarations page. Homeowners are required to create a profile in the LFHP system before registering for the lottery and may do so by visiting the LFHP website and clicking the Login button. Homeowners who previously created a profile may use the same one for this and future rounds. Once the lottery registration period closes, the LFHP will randomly select 3,000 participants and send email notifications to registrants about whether they were selected to participate. These selection notices will be sent via email beginning on Monday, June 22. There are several program requirements that homeowners should be aware of before registering. Those interested in the program are encouraged to review eligibility information and frequently asked questions at FortifyHomes.La.Gov to determine whether their home meets the requirements for the program. If selected to participate in the grant program, homeowners will be financially responsible for having the home evaluated by a FORTIFIED-certified Evaluator as well as costs for the roof upgrade including permits, inspections and construction costs beyond the amount of the grant The LFHP provides grants of up to $10,000 for homeowners to upgrade their roofs to standards set by the Insurance Institute for Business & Home Safety. The program helps Louisiana homeowners strengthen their roofs to better withstand hurricane-force winds.
Learn how real estate agents can educate buyers about Louisiana homeownership costs, including taxes, insurance, HOA fees, and maintenance.
The 2026 Regular Legislative Session has officially adjourned, and Louisiana REALTORS® closes the session with a strong record of legislative wins, defensive victories and meaningful progress on issues that directly impact property owners, homebuyers, housing providers and real estate professionals across Louisiana. This session touched nearly every major pressure point in the real estate market: insurance affordability, transaction transparency, appraisal certainty, leasing law, property taxes, blight redevelopment, litigation costs, consumer protection and private property rights. Louisiana REALTORS® successfully advanced several major policy priorities this session, including residential wholesaling reform, vacant residential land disclosure, appraisal certainty, security deposit reform, insurance mitigation funding and redevelopment tools for blighted property. At the same time, the association helped stop or reshape proposals that would have harmed housing supply, increased practitioners' liability, or created uncertainty for property owners and housing providers. Major Wins for You and Real Estate Residential Wholesaling Reform The signature victory of the session was HB 468 by Rep. Troy Hebert , Louisiana REALTORS®’ residential wholesaling reform bill. For years, residential wholesaling operated in a gray area of Louisiana law. HB 468 creates a clear statutory framework for residential wholesaling, strengthens consumer protection, increases transparency, and gives the Louisiana Real Estate Commission meaningful enforcement authority. The bill’s conference report passed unanimously in both chambers, with votes of 94-0 in the House and 35-0 in the Senate. This is a major structural reform for Louisiana real estate law. This bill will be state law effective August 1, 2026. Please note that the law does not affect any wholesale contracts between now and the effective date. Vacant Residential Land Disclosure HB 1166, by Rep. Kim Carver, passed the Legislature and has been sent to the Governor for his signature. The bill addresses disclosure gaps in vacant residential land transactions where buyers may discover late-stage issues involving access, utilities, drainage, flood risk, prior use or other material facts. HB 1166 creates a clearer process for buyers, sellers and real estate practitioners, and should help reduce failed transactions, disputes and closing-table surprises. As new industry forms and disclosures are developed, Louisiana REALTORS® will monitor the process closely and work to ensure the final requirements are practical, clear and consistent with sound industry practice. The Louisiana Real Estate Commission will complete the forms and disclosure process, with final implementation expected to be legally required for agents beginning January 1, 2027. Appraisal Liability Protections Louisiana REALTORS® secured two important appraisal-related wins. HB 1027 also by Rep. Troy Hebert , signed as Act No. 187 , clarifies that appraisers should not be held liable for compliance with obligations that belong to other parties in the transaction. HB 300 by Rep. Neil Riser , signed as Act No. 149 , addresses appraisal thresholds for bank-owned property. Together, these measures support greater transaction certainty and fairness in the appraisal process. The pair of these measures will take effect as law on August 1, 2026. Housing & Market Stability Security Deposit Reform HB 292, by Rep. Delisha Boyd and signed by Governor Landry as Act No. 63 , creates a more workable process for addressing damage discovered at the end of a lease and provides greater flexibility through written agreements regarding security deposit timelines. The measure offers practical clarity for housing providers, tenants and property managers when property damage is identified after move-out, allowing additional time to assess damage, obtain repair estimates and document costs before final security deposit accounting is completed. By creating a clearer statutory framework, the law helps reduce disputes and ensures that both landlords and tenants have a better understanding of their rights and responsibilities. Property managers can mark August 1, 2026, on their calendars, as that is the effective date for this legislation. Protections for Victims & Landlords HB 297, by Rep. Mandie Landry and signed by Governor Landry as Act No. 64 , expands Louisiana's early lease-termination protections to include victims of stalking and cyberstalking. The law recognizes that personal safety may require a tenant to leave a residence before the end of a lease term. To exercise these protections, a tenant must provide documentation from a qualified third party or other authorized evidence demonstrating that they are a victim of stalking or cyberstalking and that continued occupancy would present a safety concern. The measure also clarifies and expands who may serve as a qualified third party for purposes of supporting a tenant's request. These changes will take effect into law on August 1, 2026. Insurance Affordability and Mitigation Insurance affordability remained one of the most significant issues facing Louisiana homeowners and the real estate market. HB 1187 by Rep. Paul Sawyer , signed by Governor Landry as Act No. 416 , transfers an additional $50 million in Katrina bond assessment funds to the Louisiana Fortify Homes Program. Combined with other insurance-related funding, the program reaches approximately $80 million for the year. The Fortify Homes Program remains one of Louisiana’s most direct tools for reducing property risk, strengthening homes, improving market stability, and placing downward pressure on insurance costs over time. Several additional insurance measures did not reach final passage, including legislation on fortified roof endorsements, nonrenewal protections for homeowners who mitigate risk, and a pre-suit review process for residential property insurance disputes. These remain important long-term priorities. This became law and took effect upon the Governor’s signature. Blight, Redevelopment, and Property Taxes Louisiana REALTORS® supported policies this session aimed at returning neglected property to productive use and strengthening property-tax fairness. HB 214 by Rep. Chance Henry , now Act No. 272 with Governor Landry’s signature, will appear on the ballot as a constitutional amendment authorizing an optional property tax exemption for rehabilitated blighted or derelict property. HB 217, also by Rep. Chance Henry , is the enabling legislation for HB 214 and has received the Governor’s signature, becoming Act No. 422. Together, these measures would give local governments another tool to encourage private investment, neighborhood revitalization, and redevelopment. SB 180 , now Act No. 39 , will also appear on the ballot. The measure allows the surviving spouse of a deceased veteran with a service-connected disability to transfer an expanded property tax exemption. This is both a property-tax fairness measure and a homeownership stability measure for Louisiana veterans’ families. If passed in the fall election, the measures would take effect on January 1, 2027, as well as SB 180. Defensive Victories Some of the most important wins in this session came from stopping harmful legislation before it became law. Rent Stabilization Stopped Twice HB 472 by Rep. Alonzo Knox , the rent price control bill, was stopped after being involuntarily deferred. Louisiana REALTORS® opposed the bill and provided testimony in committee because rent-control policies can discourage investment, reduce housing supply, create uncertainty for housing providers and ultimately worsen affordability challenges. Knox brought the bill to the House Committee on Municipal, Local and Parochial Affairs twice due to the opposing testimony of our organization and opposition from the Home Builders Association and the Louisiana Apartment Association. Hidden Fees Bill Reshaped Yet Still Thwarted HB 617 by Rep. Mandie Landry , the hidden fees bill, raised concerns because it could have imposed liability on real estate professionals for fees they do not control, including those set by lenders, title companies, insurers, government entities and other third parties. Louisiana REALTORS® successfully negotiated a House-side amendment exempting real estate transactions from the bill’s scope. The bill later died in the Senate Commerce Committee. It is worth noting that the author agreed to include us in an amendment by Rep. Troy Hebert from the House floor, exempting real estate transactions. Automatic Renewal Bill Monitored HB 750, by Rep. Vincent Cox, addressing automatic renewal provisions, was closely monitored by Louisiana REALTORS® to ensure the legislation did not unintentionally apply to residential or commercial leases, property management agreements, association operations, nonprofit activities or standard real estate practices. Those concerns were successfully addressed through a Louisiana REALTORS® amendment offered by Senator Pressly during Senate consideration. When the bill returned to the House, Rep. Cox accepted the amendment and supported concurrence, preserving the bill's consumer protection goals while ensuring Louisiana's real estate industry, housing providers, associations and nonprofits were not subjected to unintended regulatory burdens . Missed Opportunities Two broader legal reform measures passed the House but stalled in the Senate Judiciary A Committee. HB 437, by Rep. Michael Melerine, addressing expert witness fees, and HB 1089, by Rep. Dennis Bamburg, establishing CARE Accounts, both reflected broader efforts to reduce litigation costs, improve Louisiana’s legal climate, and address cost drivers affecting insurance affordability and business competitiveness. Their failure to reach final passage was a missed opportunity, but the issues remain central to Louisiana’s long-term affordability conversation. Louisiana REALTORS® will continue to monitor these proposals and hope to see similar reforms return next session with a different outcome. What Comes Next The end of the session does not end the work. Louisiana REALTORS® will now turn to implementation, member education, ballot engagement and preparation for the next legislative cycle by directly engaging you, the driving force behind all of our efforts. The issues that shaped this session — housing affordability, insurance availability, redevelopment, legal costs, and private property rights — are not going away. Neither are we. Louisiana REALTORS® remain committed to serving as a consistent, credible and effective voice for property owners, homebuyers, housing providers and real estate professionals across Louisiana. Thank You As the Legislature adjourns, Louisiana REALTORS® expresses sincere appreciation to the leadership, members, public officials and advocacy partners who helped make this a productive and successful session for the real estate industry and property owners across Louisiana. We are especially grateful to Louisiana REALTORS® President Ginger Maulden, President-Elect David Favret, Treasurer Misty Ingersoll, Legislative Committee Director Keary Coffin, Outside General Counsel Eric Landry, LARPAC Chairwoman Marsha McGraw-Barbera, the Louisiana Real Estate Commission Commissioners and Executive Team, and the members of the Louisiana REALTORS® Legislative Committee for their leadership, guidance, resources and engagement throughout the session. We also extend a special thank you to those who attended this session’s REALTOR® Day and helped strengthen our presence at the Capitol. Your participation amplified our ability to advocate with one united voice when it mattered most. We further extend our appreciation to the legislators and partners who worked alongside us this session, including Rep. Troy Hebert, Rep. Kim Carver, House Commerce Chairman Daryl Deshotel, Rep. Delisha Boyd, Rep. Stephanie Hilferty, Rep. John Wyble, Sen. Beth Mizell, Sen. Greg Miller, Speaker Phillip DeVillier, Senate President Cameron Henry and Governor Jeff Landry for their leadership, accessibility and commitment to addressing issues impacting housing, property rights, insurance affordability, redevelopment and Louisiana’s economic future. Strong policy outcomes are only possible through collaboration, professionalism and sustained engagement. Louisiana REALTORS® remains grateful for the relationships and partnerships that helped move meaningful legislation across the finish line this year. Please view the session wrap-up tracking report provided by our lobbying team over at Harris, DeVille and Associates.
