Coronavirus Q&A: Brokerage Issues

 Baker, Donelson, Bearman, Caldwell & Berkowitz, PC

450 Laurel Street, Chase Tower North, 21st Floor

Baton Rouge, Louisiana 70801

Many aspects of the home buying and selling process are being impacted by the outbreak of the COVID-19 pandemic (coronavirus). Below are questions related to the potential impact of the coronavirus outbreak affecting Brokers. The governmental response to the coronavirus is rapidly evolving. It is important to refer to the CDC’s website for up-to-date information about the coronavirus's current impact in the United States. Daily updates about the coronavirus are also available from the World Health Organization. 

Short Answer: Not specifically, except that certain actions regarding property management (Landlord/Tenant) may potentially be the subject of these orders. We will further address these issues in a separate article. See also “Impact of the Executive Order on Purchase Agreements and Closings” 

Short Answer: Not specifically; however, force majeure clauses may be important in determining if delayed or excused performance of contracts is allowed. There is a more detailed discussion of this issue on LR’s website: https://www.larealtors.org/publications/2020/3/19/impact-of-the-executive-order-on-purchase-agreements-and-closings.

Short Answer: Currently there is no governmental order prohibiting open houses. However, the most recently issued CDC guidance and President Trump’s “Guidelines for America -- 15 Days to Slow the Spread of Coronavirus (COVID-19)” provide that, events of 10+ people should be canceled or held virtually. See https://www.cdc.gov/coronavirus/2019-ncov/community/large-events/index.html and https://www.whitehouse.gov/wp-content/uploads/2020/03/03.16.20_coronavirus-guidance_8.5x11_315PM.pdf. Brokers should continue to assess whether open houses are advisable based the current facts and rapidly changing circumstances.  

The National Association of REALTORS® (NAR) issued guidance on this topic. See https://www.nar.realtor/coronavirus-a-guide-for-realtors. Brokers should talk to their clients about conducting open houses and consider possible health risks. Further, the Broker and Seller should consider what steps can be taken to limit the potential risk of infection. For example, should everyone be required to wash their hands or use hand sanitizer when entering the property? What is your procedure if someone wants to visit the property and appears ill? Cleaning and disinfecting the property after an open house should be considered, as well as who will pay for the cost of the cleaning.

Many real estate industry groups are recommending against holding open houses. Some MLS’s in other states, like Washington, have eliminated the ability of members to schedule open houses until further notice. This has not occurred in Louisiana, as of the writing of this article. However, careful consideration should be given to postponing open houses, in light of the rapid rise in known coronavirus cases in Louisiana. Also, it is important to continue monitoring the CDC’s website, as well as any Orders issued by Governor Edwards, which may impose further restrictions on in-person gatherings.  

 Short Answer: Currently yes; there is no governmental prohibition against showing the property. However, Brokers should review their listing agreements for specific contract provisions and continue to assess whether showings are allowed and/or advisable based on the current facts and circumstances.  

NAR has provided guidance on this topic. See https://www.nar.realtor/coronavirus-a-guide-for-realtors. You should work with your Sellers to determine if they are willing to have their home or property open for showings, as discussed above, or virtual tours and virtual meeting may be an alternative. We now know the coronavirus may live on surfaces for some time, and some Sellers will not want to have visitors in their homes or properties at this time.

Be mindful and diligent in monitoring updates from the CDC, as well as State and local health authorities for additional information and guidance on holding meetings or events. The Louisiana Department of Health’s website may be found here: http://ldh.la.gov/coronavirus/. Another helpful resource is the CDC’s Interim Guidance for Businesses and Employers.

Short Answer: Yes; however, it is important to make sure that any change in a Broker’s business practices is applied equally to all clients. You can ask clients if they have traveled to affected countries if they are experiencing any signs of respiratory illness or running a fever. See https://www.nar.realtor/coronavirus-a-guide-for-realtors. Also, if a Broker does drive clients to showings, it will be advisable to frequently clean and disinfect the vehicle. The Broker may also ask the clients to use hand sanitizer before entering the car.     

Short Answer: Yes. 

Based on what is currently known about coronavirus, spread from person-to-person usually happens among close contacts (within about 6 feet). See https://www.cdc.gov/coronavirus/2019-ncov/community/organizations/cleaning-disinfection.html. According to the CDC, the coronavirus may remain viable for hours to days on surfaces made from a variety of materials. So, the CDC recommends cleaning of visibly dirty surfaces followed by disinfection as a best practice measure for the prevention of coronavirus. See https://www.cdc.gov/coronavirus/2019-ncov/community/organizations/cleaning-disinfection.html. In addition to performing regular environmental cleaning with special attention paid to frequently touched surfaces, Brokers should implement a mandatory “stay home” policy for any staff member or agent exhibiting any sign of illness. See https://www.nar.realtor/coronavirus-a-guide-for-realtors. In addition, with CDC guidance that recommends limiting or canceling gatherings and events, Brokers should take measures to hold virtual meetings when possible, and potentially postpone or cancel in-person meetings or events at this time.  

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 4:00 p.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 4:00 p.m.