Coronavirus Q&A: Brokerage Issues
Louisiana REALTORS • March 20, 2020
Patricia B. McMurray, JD and Melissa M. Grand, JD
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.
1. Has the Governor, local government or Louisiana Real Estate Commission issued any new rules regarding real estate activity and licensees since the coronavirus pandemic declaration?
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”
2. Are my listing agreements impacted by Governor Edward’s recent order or any local governments’ orders?
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.
3. Can I still hold open houses on listed properties?
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.
4. Can I still show houses?
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.
5. May I refuse to meet with or drive potential clients to see homes?
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.
6. Should Brokers consider taking any precautions in his or her office?
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.
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 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.
Week 9 brought several major Louisiana REALTORS® priorities into posture as the Legislature moved deeper into the final stretch of the session. Two of our top priority bills, HB 468 and HB 1027 both by Representative Troy Hebert , cleared the Legislative Bureau and advanced to the Senate floor calendar for third reading and final passage. HB 468, our residential wholesaling regulation bill, remains one of the most important consumer protection measures of the session. The bill brings transparency, accountability, and clear rules of the road to residential real estate wholesaling in Louisiana. HB 468 previously passed the House by a vote of 96–0 and is now positioned for final Senate consideration. HB 1027, which clarifies that licensed real estate appraisers are not liable for a seller’s failure to comply with carbon monoxide detector requirements, also advanced to the Senate floor calendar after previously passing the House by a vote of 90–0. Both bills remain in strong posture, and Louisiana REALTORS® will continue working for final passage as they move through the Senate. Another major development this week was the House passage of HB 1166 by Representative Kim Carver , which passed unanimously on May 5, 103–0. HB 1166 creates a practical disclosure framework for vacant residential property transactions and is designed to help buyers, sellers and real estate professionals avoid late-stage surprises involving access, utilities, drainage, flood risk, prior use and other material property conditions. This bill has been a key part of Louisiana REALTORS®’ consumer protection and transactional clarity agenda. HB 1166 was received in the Senate on May 7 and now moves into the Senate side of the process, where Louisiana REALTORS® will continue working closely with the author and stakeholders as the bill advances. Tort reform and civil justice issues also moved forward this week. HB 437 by Representative Michael Melerine , which addresses the award of expert witness fees in civil litigation, passed the House by a vote of 75–18 and was received in the Senate on May 7. HB 1089 by Representative Dennis Bamburg Jr. , which creates structured CARE Accounts for certain categories of tort damages, passed the House by a vote of 67–29 and was also received in the Senate. Louisiana REALTORS® continue to support meaningful tort reform as part of the broader effort to improve Louisiana’s legal environment, reduce litigation-driven costs, and help stabilize the property insurance market. A more predictable civil justice system directly supports property owners, consumers, businesses and the long-term health of Louisiana’s real estate market. Property insurance remains one of the most important issues facing homeowners and property owners across the state. HB 1187 by Representative Paul Sawyer , dealing with Citizens Property Insurance emergency assessments, has been received in the Senate and referred to the Senate Insurance Committee after previously passing the House by a vote of 87–9. Several additional insurance-related measures remain active, including bills addressing fortified roof endorsements, stated-value homeowner policies, insurance notice requirements, nonrenewal restrictions, and pre-suit claim review. HB 408 , which addresses insurance nonrenewal prohibitions, and HB 1210 , which addresses mandatory pre-suit claim review, remain pending in the House Insurance Committee. Louisiana REALTORS® will continue to closely monitor these measures because insurance affordability, availability and market stability remain central to housing affordability and private property ownership in Louisiana. Several Senate bills also continued moving through the House processes this week. SB 241 by Senator Valarie Hodges , which requires insurance adjusters and appraisers to include their license numbers in written communications, cleared the Legislative Bureau on May 6 and returned to the House floor calendar. This measure remains relevant to transparency, accountability, and consumer confidence in the insurance claims process. SB 180 by Senator Franklin Foil , which allows surviving spouses of deceased disabled veterans to transfer their expanded property tax exemption, was scheduled for House floor debate this week and remains a positive homeowner protection and property tax fairness measure. Louisiana REALTORS® also continues to monitor legislation dealing with blight, redevelopment and rent stabilization. HB 284 by Representative John Wyble , which would authorize certain parishes and municipalities to expropriate blighted property by declaration of taking, remained on the House calendar this week as a notice-given, subject-to-call bill. The bill previously failed on the House floor by a narrow vote of 48–47 and remains under active reconsideration. Blight policy is important, but redevelopment tools must be balanced with private property rights, due process, and protections for property owners. HB 472 by Representative Alonzo Knox , which would authorize municipalities to implement rent stabilization programs, remains involuntarily deferred in committee. Louisiana REALTORS® continues to oppose rent control and rent stabilization proposals in any form because these policies reduce housing supply, discourage investment, and ultimately worsen affordability challenges over time. As we move into Week 10, Louisiana REALTORS® will remain focused on securing final Senate passage of HB 468 and HB 1027, advancing HB 1166 through the Senate, and continuing to engage on the tort reform and insurance measures that directly affect property owners, housing affordability and the real estate profession. With REALTOR® Day at the Capitol taking place during this critical stretch of the session, member engagement will be especially important as legislators continue to make decisions on real estate, insurance, liability, redevelopment and private property rights issues. Please view the weekly bill tracking report provided by our lobbying team over at Harris, DeVille and Associates.
Week 8 was one of the most consequential weeks of the session so far for Louisiana REALTORS® and the real estate industry. Two of the association’s flagship bills moved to the brink of final Senate action, rent stabilization was stopped again in committee, major insurance legislation continued to advance, and several bills affecting property rights, tort reform and transaction practice saw meaningful movement. The biggest developments of the week came on HB 468 and HB 1027 , both by Rep. Troy Hebert . HB 468 , the residential wholesaling bill, cleared the Senate Commerce Committee on April 28, had its amendments adopted on April 29, and was referred to the Legislative Bureau putting it one step away from the Senate floor. HB 1027 , the appraiser liability bill, followed the same path after its overwhelming House passage earlier this month and is also now pending Legislative Bureau review before final Senate consideration. Louisiana REALTORS® strongly supports both measures, which are designed to strengthen consumer protection, improve market clarity and reinforce confidence in the real estate transaction process. On the rent-control front, HB 472 by Rep. Alonzo Knox was brought back before the House Municipal, Local and Parochial Affairs Committee this week. Louisiana REALTORS® testified in opposition, and the committee voted 8-5 to defer the bill involuntarily. That is a meaningful win for property owners, housing providers, and the long-term health of Louisiana’s housing market. Louisiana REALTORS® remains firmly opposed to rent stabilization proposals, which may sound politically attractive, but have consistently been tied to reduced housing supply, deterioration in rental stock and long-term affordability problems in markets where they are adopted. Insurance remained one of the session’s most active and important policy areas. HB 1187, Rep. Paul Sawyer , dealing with Louisiana Citizens for emergency assessments, passed the full House 87-9 on April 29, and now heads to the Senate. Because Citizens' assessments can ultimately affect policyholders across the state, this bill has clear relevance for affordability and homeownership costs. HB 408, Rep. Edmond Jordan was heard in House Insurance Committee this week and remains pending. This bill would prohibit insurers from non-renewing residential policies when homeowners have taken documented steps to reduce risk, an issue with direct implications for insurability and failed closings in vulnerable markets. In addition, SB 241 by Sen. Valarie Hodges , which requires insurance adjusters and appraisers to include their license numbers in written communications, cleared House Insurance unanimously and is now headed to the House floor. Taken together, these measures reflect the legislature’s continued focus on insurance stability, transparency and accountability, all of which remain central to real estate activity in Louisiana. Week 8 also brought movement on broader tort reform and property-rights-related legislation. HB 437 , addressing expert witness fees, and HB 1089 , creating structured CARE Accounts for tort damages, both cleared House Civil Law and are now set for House floor debate next week. Meanwhile, SB 180 by Sen. Franklin Foil , allowing surviving spouses of disabled veterans to transfer a property tax exemption, is nearing final House passage after advancing to third reading. While not all of these bills directly regulate licensees, they reflect the broader civil liability and property tax environment that affects the cost and accessibility of owning property in Louisiana. Another key bill for the industry, HB 1166 by Rep. Kim Carver , remains very much alive and is now positioned for House floor debate on Tuesday, May 5 . The bill would require disclosures for vacant residential property, and it would close an existing gap in Louisiana law that currently exempts many vacant homes from standard seller disclosure rules. After being called and returned to the calendar earlier in the week, the bill is now finally set for debate. Louisiana REALTORS® also intends to use the bill as a vehicle for a structural amendment to the Louisiana Real Estate Commission that would move toward a more geographically balanced appointment process, with one member appointed from each congressional district and the remaining members appointed at large. That change would better ensure regional representation across Louisiana’s diverse real estate markets and help modernize the commission’s structure. Taken together, week 8 was a strong and consequential week for Louisiana REALTORS®. The association’s two flagship bills are now within reach of Senate floor passage, rent stabilization was turned back in committee, important insurance legislation continued moving, and HB 1166 remains positioned as both a major disclosure bill and a possible vehicle for meaningful LREC reform. Louisiana REALTORS® remains fully engaged at every stage of the process to protect private property rights, support practical regulation and advance policies that strengthen Louisiana’s real estate market. Lastly, this week, Louisiana REALTORS® wants to extend sincere thanks to Rep. Delisha Boyd — a real estate broker herself — for her tireless work shepherding HB 292 through the legislative process. The security deposit fairness bill, which allows landlords and tenants to mutually agree in writing to extend the timeline for returning a security deposit when damage is found, has passed to third reading and final passage in the Senate and is nearly on its way to the Governor's desk. This has been a meaningful win for both property owners and renters across Louisiana. Please view the weekly bill tracking report provided by our lobbying team over at Harris, DeVille and Associates.
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