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.
Want Your Teen to Own a Home Someday? Start Talking Money Now Teens may not be thinking about mortgage rates or down payments just yet, but the money habits they’re building now can follow them for years. And 88% of teens surveyed by Fannie Mae and Junior Achievement said they want to own a home someday. This week’s Consumer Guide: Talk to Your Teens About Money and Homeownership makes those conversations a little easier, covering everything from credit scores and budgeting to debt, renting versus owning and saving for that eventual down payment. So yes, you may have to interrupt the doomscrolling. But helping teens get smarter about money today could put them in a much better position to get the keys to a home of their own down the road. Download all of NAR’s Consumer Guides in English or Spanish at facts.realtor. For ease of reference, below is a list of the most recent guides: NEW: Teen Financial Literacy Fraud Red Flags Helping Family Members Become Homeowners Prepare Your Home for Hurricane Season Condominium Insurance Thank you for your continued engagement with the “Consumer Guide” series and for sharing the resources with prospective clients to ensure they have the information they need to find success in their home buying or selling journey. Remember that these guides are for informational purposes only and are not meant to enact or change any existing NAR policy. The next Consumer Guide, scheduled for publication on Oct. 21, will cover winter cold and storm preparedness.
Homeownership Is on Louisiana's November Ballot
After months of gathering recipes from across our Louisiana REALTORS® family, the cookbook is ready! This 200+ page collection is filled with Louisiana flavor, REALTOR® heart and recipes contributed by our members. We launched sales of the cookbook at the Fall Governance Meetings. You can now purchase your copy for $30 directly from the printer and shipped to you! Additionally, we will have copies available at the RRF booth at NXT . After NXT, we will carry a limited stock at the LR office for you to purchase through the LR Merch Shop and pick-up from the office or at an LR event, as stock is available. Even better, $15 from every cookbook sold will be donated to the REALTORS® Relief Foundation (RRF) to help provide housing-related assistance to REALTORS® and their families following disasters. Pick up a copy for yourself, grab one as a gift and enjoy a taste of Louisiana while supporting a great cause!
