Timeliness to Rebuild in New Orleans Still an Issue after Hurricane Katrina

The idea of timeliness is a common contract clause that requires that one of the parties perform a mandatory act within a certain amount of time. There is often a specific amount of time attached, but sometimes the clause can simply state that an action be carried out “within a timely manner” or similar wording. Usually if a party does not follow a timeliness requirement, the other party can dissolve the contract. However, if there are extenuating circumstances that create a situation in which the timeliness requirement could not have been satisfied, then courts may take that into consideration and allow the contract to continue.

In the aftermath of Hurricane Katrina, many companies were scrambling to rebuild their companies and manage rebuilding in hopes of returning to some form of New Orleans normalcy. Due to the myriad of weather and levee related problems, common damages included flooding within buildings, broken windows, roof damage, and a number of other damages relating to the huge amounts of wind and rain. The damage was enough to force the city of New Orleans shut down for at least thirty days after the storm. One would think that these conditions might fit with those extenuating circumstances to avoid a timeliness provision regarding how quickly to rebuild.

Conversely, the court ruled that this was not the case. Expert testimony stated that contractors were working to rebuild within two weeks after the storm. Therefore, contracts that included timeliness provisions still had full force. In one case, a lessee had a provision in their rental agreement that stated if there was significant damage the lessor could choose to either repair the property or terminate the lease within thirty days after the disaster. If the lessor chose to rebuild, then he would be required to rebuild within 120 days. In this case, the lessor chose to rebuild, was unable to fulfill the timeliness requirement. Instead, the property was returned to a “shell condition” nearly a year after Katrina hit. The “shell condition” consisted of very few substantial repairs, so that the building could not be used for its intended purpose. Instead, vital things were missing such as doors and doorframes.
As in many instances, the court paid close attention to the difficulties suffered in a myriad of cases. The lessor did not fulfill the requirement to repair the building so that it could be used for its intended purpose as required by Louisiana Civil Code. He violated the timeliness provision because even the “shell condition” did not occur until a year after the storm. As a result, the court declared dissolution of the contract. Therefore, the lessee did not have any further rental obligations.

Often, if the circumstances surrounding the repair are such that restoration was possible but the lessor procrastinated beyond the timeliness provision, then the court will dissolve the lease. Additionally, if the repair does not place the lessee in the same or similar position as before the disaster, then the court may also dissolve the lease. If you are a lessee who is struggling with repairs and may have a timeliness provision in your rental contract, contact the Berniard Law Firm today to speak with an attorney immediately.