Q. Are landlords impacted by the Executive Order issued by Governor Edwards?
A. Executive Order No. JBE 2016-57 was issued by Governor Edwards on August 17, 2016 (copy at http://gov.louisiana.gov/assets/ExecutiveOrders/JBE16-57.pdf), and amends Executive Order No. JBE 2016-53 by further providing that nothing in the Executive Order shall be interpreted to prohibit an owner of immovable property from: (i) reclaiming rental property, if abandoned, as provided by law; or (ii) entering rental property to make necessary repairs, as provided by law. In short, the Executive Order does not prohibit property managers and landlords from retaking possession of abandoned rental property or repairing rental property, if allowed by Louisiana law. Whether or not a tenant has abandoned rental property is determined on a case-by-case basis. Generally, abandonment requires both the tenant to actually abandon the rental property, and for the tenant to intend to abandon—and not return to—the rental property. Mansur v. Cox, 898 So.2d 446 (La. Ct. App. 1 Cir. 2004).
Q. What about “Act of God” or “Fortuitous Events” provisions in contracts, including Purchase Agreements?
A. Many contracts contain provisions specifying remedies or expanded timelines in the event that a natural disaster (or “Act of God” or “Fortuitous Event”) occurs which prohibits the parties from completing the transaction. The term “Fortuitous Event” is used interchangeably by Louisiana courts with the term “force majeure”, and is defined as an event that prevents someone from fulfilling a contract that, at the time the contract was made, could not have been reasonably foreseen. The Louisiana Civil Code articles addressing “Fortuitous Events” do not specifically suspend the performance of contracts upon the happening of a Fortuitous Event or disaster. In the absence of a specific provision in a contract changing deadlines or suspending delays for “Fortuitous Events” or “Acts of God”, deadlines generally continue to run; it is possible that the purchase agreement would be deemed expired upon the expiration of the deadline for closing, despite the occurrence of such disaster. Generally, Louisiana law does not grant purchasers in private contracts an automatic extension of time to perform such obligations in the event of a flood or natural disaster. The Louisiana Residential Agreement To Buy Or Sell (the “Purchase Agreement”) form does not include a delay or suspension of deadlines for “Acts of God” or “Fortuitous Events”.
A. Governor Edwards issued Executive Order No. JBE 2016-53 on August 15, 2016 (copy at http://gov.louisiana.gov/assets/ExecutiveOrders/JBE16-53.pdf) (the “Executive Order”). The Executive Order suspends all deadlines in “legal proceedings, administrative, and regulatory proceedings” including “in all courts, administrative agencies, and boards…” However, the Executive Order does not appear to specifically encompass closing deadlines contained in private contracts between private parties, such as purchase agreements. Timelines and closing deadlines contained in purchase agreements represent terms of contracts negotiable between the parties to such contracts, and may be amended by agreement of the parties. The failure of parties to perform within such timeframes, or agree to amended timelines, may result in the default of a purchase agreement, if not amended. See Louisiana Civil Code Article 2017. By: Baker, Donelson, Bearman,
Caldwell & Berkowitz, Patricia B. McMurray and Natalie K. Maples