The “Knock Out” Or Sometimes Called “Kick Out” Clause. What Is It And What Does It Mean?
How does a clause that mainly pertains to real estate “tie into” the wedding and events industry?
Well folks if you were planning to marry in mid March or April during a pandemic, this clause may be tied to a contract with a vendor that will affect you in one way or another.
How so? Read your contract. Did the venue offer a reschedule clause? Does the possibility of a reschedule even exist? Did you book the venue off season at a lower rate? Venues are seasonal as are most vendors. If you were unaware of this fact you need to understand why. Events are seasonal. Most venues and vendors are only booked 6 months out of the year in many situations. Seasonal prices vary which is why many people choose to book off season.
Did the venue contract lay out what would happen if an Act Of God interferes with your best laid plans?
We are treading in uncharted territory my friends. No one planning a wedding, baptism, vow renewal or even a funeral was “planning” to have a worldwide crisis.
If you work in real estate or have worked in real estate, you are probably familiar with this type of contract clause.
A kick-out clause gives sellers the ability to continue marketing a house in the event that they receive an offer with contingencies, or conditions that must be met. One of the most common contingencies is that the buyers must sell their current home. But a kick-out clause in the sales contract allows the seller to “kick out” a buyer with contingencies (after a certain time period) if a better offer comes around.
For buyers, a kick-out clause can make their offer look weaker than one without it. Sellers may not want to take the risk, especially if other offers have been made.
A seller who accepts an offer with a kick-out clause is likely to have more leverage during the home sale contingency period (the period during which the contingency must be met). For instance, a seller who gets a higher offer could use other contingencies—such as the financing contingency—as proof that the initial buyer is incapable of purchasing the property. When this happens, the original contract will be dissolved, leaving the seller free to negotiate with the person who made the higher offer.
Can you re negotiate the terms of your venue contract? Perhaps but you need to act now. Why? Because when the ban on group gatherings is lifted the venue will either have existing bookings in place already or begin rescheduling. You don’t want to be at the “end of the line.”
A large number of my traditional bookings have “opted in” to elope at my location, their location of even a park or the downtown area to prevent the possibility of their marriage license expiring. Another portion have accepted their license will expire and plan to purchase another license.
Still others have decided to reschedule their event next year. But what about that deposit at the venue? What if the venue is already booked next year? It’s time to drag out your negotiation skills folks. You paid a deposit in good faith. What about YOU?
While most everyone is stuck at home other than “essential employees,” it’s time to start contacting venues and vendors to find out exactly where you stand when the world opens up again. While your contract may have stated “non refundable” what were the terms?
My contracts offer rescheduling at no cost to my clients. I’ve always included this option as a courtesy but not everyone else does.
Did you have a contract with the DJ? The videographer? It’s time to “firm up” where you stand with the vendors you have paid in good faith PRIOR to Covid-19.
All of my clients know they can easily contact me to either reschedule or choose an elopement instead. But it’s time to revisit your other event vendors and find out what they are willing to do for you.
This morning my Belltower Chapel client is confirmed for May. They had planned for May months ago. But what about other clients who planned for April? The beginning of wedding season and busiest booking month of wedding season?
Or the mid March clients who were “suddenly notified” that their event had been cancelled by the venue?
Read your contract. Last night my husband was discussing an offer on one of the homes that the agent had passed along. The terms were sketchy. Why? The prospective buyers offered a low ball and hadn’t even listed their home yet. They also were effectively planning to put a low ball hold on a home contingent with them selling their home by July. It’s April. The offer was declined.
When you are in the business of selling regardless of what you are selling whether it’s a service or product, the essence of knowing the value of either your service or product is critical to your own self preservation. Mistakes are costly. If you don’t know the value of your service or product who does?
Sales and marketing in a downtrodden economy is tricky. While many sellers might be slashing prices to make a sale others aren’t. Why not? Because they know the value of their product or their service.
Quality isn’t on clearance. But what about customer service? What about holding your clients hand while wondering when things will return to normal? Is fear going to affect your bottom line? It shouldn’t but in certain situations it might. Are you willing to work for 1/2 your previous salary? For a number of employees in homebuilding this “offer” is a shocking sucker punch.
My husband and I discuss everything. We are in completely different careers. When Matthew reminded me of an incident years ago with Choice Homes I was shocked. What had happened? The owners had set up tables for everyone “who had just been fired.” Subsequently, another area had been set up to rehire the same employees who had been fired at half their previous salary. My husband was one of those employees in 1988. Like everyone else unceremoniously fired, he was furious and in the midst of a real estate crash also unable to run out and go find another homebuilding job.
Times have changed. McBee Homes isn’t firing anyone or slashing the salaries of their employees. They also aren’t taking low ball offers.
Home building like any other industry will experience highs and lows. Weddings and other events will endure and persevere too.
Over the past 6-8 weeks of the Coronavirus, I’ve had 22 people canceled either at the venue or at a Prison. During the week I’m often scheduled at Prisons and on weekends at venues. These 22 people had excitedly looked forward to marrying. They had waited months. They were also disappointed and helpless to change the circumstances.
Two of my mid March Units were rescheduled. Wallace-Ware rescheduled on 04-21-20 at 10:30AM. Monday I began calling the Unit to confirm prior to driving 6 hours round trip. Sadly, Wallace had in fact decided to cancel without notifying either me or my client. This is why I decided to go to the trouble to confirm in the first place. I knew the possibility existed and before jumping in my Sahara and driving 3 hours to Colorado City decided to contact the Unit first. Of course my client is upset at being cancelled not once but twice. We cannot control the current changes no one expected. What we can do is saddle up and ride out the storm and we will.
Next week I was scheduled at Robertson Unit. I advised Stella that Wallace had cancelled their reschedule meaning that most likely Robertson would too. I was right.
Currently I’m wholly unable to schedule anything at a TDCJ, FBOP, ICE or County Jail Facility until visitation isn’t reinstated. I have 52 clients waiting on these restrictions to be lifted. Previously scheduled and cancelled clients will be rescheduled first.
“How are Cindy and I staying busy while staying socially distanced and struggling through the added stress of homeschooling the twins?” Great question. This is the longest Cindy and I have been separated. Because we couldn’t find face masks we liked, we decided to make our own and have been really busy with our latest Texas Twins Treasures endeavor. We call each other every hour or so and FaceTime with my son and his wife currently on paternity leave caring for my first grandchild, Oliver Glenn. My niece and grandniece are on lockdown at Point Hueneme until June now. Restrictions on base have been extended. To create a fun zone for my grandniece, Maddy, Cindy and I have ordered a ball pit, water activity table and mini trampoline for the small backyard area of their base housing townhome. Maddy is a very active and rambunctious four year old clothing model who is accustomed to being on the go and frequently jumps into client photo shoots. She is a ball of fire. The twins Maryssa and Makenna are crushed that their driving school class was cancelled and that they won’t be returning to school this year. Cindy and I are also learning that Algebra and Biology for ninth graders is far more complicated than we had previously believed it to be. Home schooling teens is somewhat frustrating but occasionally hilarious for two sets of Texas Twins.
We will get through this ya all. But we need to be far more cautious when the world opens up again. Why? Because we’ve learned the hard way that a pandemic can quickly change all of our lives and all of our plans.
Recently speaking to a journalist about how this pandemic affected event coordinators, officiants and planners, my answers were a mix of unanticipated hand holding and counseling for my clients as well as the unprecedented “Catfish Adoption Scam.” My clients frequently contact me for assistance or guidance. Deanna had contacted me for help to set up a GoFundMe Account. Lacey “found me” and a way to financially squeeze Deanna by stating “I want to give up my baby.” What ensued was a full week of lies and lead ons between Lacey, Deanna, myself, Lacey’s friend and Lacey’s godmother. Was Lacey actually pregnant? Who knows but Deanna and I know this… Lacey wanted money. Lacey was unwilling to provide medical records or sign a contract. Lacey was an opportunist.
Moving forward I’ve learned many things about “Catfishing.” It’s something I had “heard of” but didn’t understand. I do now.
Stay calm and if you are staying home, drag out those contracts and read them fully with venues and vendors. If you have questions about the terms, feel free to call me and I will go over what you can do to negotiate with the venue or vendors that you have paid a deposit to for an event or service that you have paid for that you never expected to be cancelled.