Coronavirus: Legal Q&As


 WRA Legal Team  |    March 19, 2020
Questions and Answers

The WRA Legal Hotline has received several inquiries regarding conducting real estate business during the coronavirus quarantine period. Learn more with these hotline questions and answers.

Wis. Admin. Code § REEB 24.07(1)(c) requires cooperating firms to inspect the property unless they are denied access. The broker recently received an email from a broker who is sending out emails to licensees and apparently to buyers as well, stating they are offering video showings to properties. Please comment on this with regard to the duty to inspect and whether licensees are required to put themselves at risk when providing real estate services considering the coronavirus (COVID-19).

The WRA’s Legal Hotline wants all agents to be safe during this time and conduct their practice in a way that minimizes risk. Consideration of video and other technological alternative techniques may be worthwhile.

If an agent is not comfortable showing properties at the moment, the agent may consider that the law does still require a listing agent to inspect a property prior to listing it and all other agents must inspect prior to or during a showing unless the agent is not given access to the property. 

Wis. Admin. Code § REEB 24.07 provides: 

(1) Inspection of real estate.

(a) General requirement. A licensee, when engaging in real estate practice which involves real estate improved with a structure, shall conduct a reasonably competent and diligent inspection of accessible areas of the structure and immediately surrounding areas of the property to detect observable, material adverse facts. …

(b) Listing firm. When listing real estate and prior to execution of the listing contract, a licensee shall inspect the real estate as required by sub. (1), and shall make inquiries of the seller on the condition of the structure, mechanical systems and other relevant aspects of the property as applicable. The licensee shall request that the seller provide a written response to the licensee’s inquiry.

(c) Other licensees. Licensees, other than listing firms, shall inspect the real estate as required by sub. (1) prior to or during the showing of the property, unless the licensee is not given access for a showing.

The agent’s inspection of the property is limited to “accessible areas.” “Accessible areas” is not defined. If an agent or a consumer made a complaint because an agent didn’t inspect the property, the agent could argue a pandemic virus makes all of the property “inaccessible” for the agent. 

Sellers can also restrict access to a property and say that no one but the potential buyer can get in or otherwise restrict access as the seller deems prudent and that would alleviate the agent’s inspection obligation because the agent was not given access. 

Wis. Admin. Code § REEB 24.13(2)(a) provides:

Listing firms shall permit access to listed property for showing purposes, to all buyers and persons assisting or advising buyers, without unreasonable delay, unless the buyer’s or other person’s access is contrary to specific written instructions of the seller.

READ MORE ABOUT IT:
See the NAR Open House Guidance During COVID-19 at www.nar.realtor/open-house-guidance-during-covid-19 and Wis. Admin. Code chapter REEB 24 at docs.legis.wisconsin.gov/code/admin_code/reeb/24.

Looking for clarification on the new Addendum CV. With regards to language on lines 6-8, is the contract essentially put on hold for up to 30 days (or other agreed upon time frame)? So, for example, if a buyer is in day 3 of a 14-day Inspection Contingency period and they get notice that inspectors can no longer inspect, then that Inspection Contingency period “pauses” at day 3. When the inspectors are able to start working again, the buyer would have the remaining 11 days to do their inspection. Am I reading that correctly?

The buyer’s Inspection Contingency deadline would have to pass to trigger the 30-day extension. If a buyer is on day 3 of a 14-day Inspection Contingency, it is not yet known that it is impossible for the buyer to perform by the deadline.

For example, assume the offer was accepted on March 1, then the 14-day Inspection Contingency will run through March 15. If written notice of an office closure is given, then the deadline is extended potentially through April 14 , which is 44 days (14 + 30) after acceptance. 

This provision applies only if an office closure makes it impossible for a party to perform, which is admittedly a very high standard. It does not indicate that one contractor’s inability to provide services due to the closure of the contractor’s office triggers the extension because the party may look for other contractors for the assistance needed for the party’s performance. As the situation with the coronavirus evolves and solutions, often based in remote technology, are developed to work around obstacles to customary practice, it may be unlikely this provision comes into play, but it is nonetheless a prudent precaution.

READ MORE ABOUT IT:
See the WRA's coronavirus webpage, including the WRA Addendum CV Provisions, at www.wra.org/coronavirus.

An agent wrote an offer on a property. The offer was contingent on the seller delivering a notice terminating the tenancy of a month-to-month tenant after the buyer delivered the loan commitment because the new owner is going to occupy the property. The listing agent said that they are not able to ask the tenant to move out now because of new rules that were put in place because of COVID-19. Is this true?

The WRA Legal Hotline is not presently aware of any state or federal prohibitions on terminating a month-to-month tenancy with proper notice. Perhaps the listing agent is thinking of temporary federal moratorium on foreclosures and evictions and the actions being taken in some Wisconsin courts. That is not applicable to giving a notice to a tenant to terminate a tenancy. 

The news indicates that judges have halted evictions in Milwaukee and Dane counties to prevent homelessness and the spread of the coronavirus. See www.jsonline.com/story/news/local/2020/03/18/judges-milwaukee-and-dane-counties-order-sheriffs-deputies-not-evict-people/2867116001.

Also, the Department of Housing and Urban Development plans to stop foreclosures and evictions for 60 days on single-family homes with loans through the Federal Housing Administration. See https://fortune.com/2020/03/20/renters-coronavirus-eviction-moratorium-protection.

Does a tenant in a multi-family housing unit have the right to refuse a showing notification in light of what’s going on with COVID-19?

There is no outright authorization in statutes or administrative code or in any executive or agency order that permits a tenant to refuse a showing for any reason as long as the landlord gives proper notice to the tenant. Given the recommendation that people engage in “social distancing,” a landlord should consult the landlord’s legal counsel regarding whether the landlord should force a showing at this time even if legally permitted to do so. 

The buyers have attended an open house and want to write an offer, but the buyer's agent was refused a showing appointment due to the current coronavirus crisis. What are the rules regarding the duty to show for REALTORS® under this circumstance?

Although not normally recommended, an agent may draft an offer to purchase without viewing the property. The seller may have imposed limitations for showings, open houses or inspections. Without viewing the property, the agent may be hard-pressed to make necessary disclosures regarding property conditions and recommend appropriate contingencies for the buyer's consideration. This situation is unique in that the buyer has seen the property, so the cooperating agent may make additional inquiries about what the buyer viewed, what inspections or testing may be appropriate and draft accordingly.

Wis. Admin. Code § REEB 24.07(1)(c) requires cooperating firms to inspect the property unless they are denied access: 

Other licensees. Licensees, other than listing firms, shall inspect the real estate as required by sub. (1) prior to or during the showing of the property, unless the licensee is not given access for a showing.

The agent should certainly encourage the buyers to include an inspection contingency in the offer as well as any other inspection or testing provisions with regard to potential issues the buyers may have noticed.

See the Wis. Admin. Code § REEB 24.07 inspection and disclosure rules at https://docs.legis.wisconsin.gov/code/admin_code/reeb/24/07.

The sellers want to continue open houses during the virus crisis. The home is not occupied. What is proper protocol?

Given the unprecedented times, there is no specific protocol. What may be appropriate today may change on a daily basis. Before making any decisions, the broker will need to balance all interests involved, including but not limited to the seller's instructions, federal or state mandates, and safety considerations for the licensee and buyers. All these will need to be considered when making decisions about showings or open houses. Given the property is vacant, the broker may, for example, with the permission of the seller, host limited open houses. For example, allowing only one buyer at a time in the property, requesting no buyers manifesting symptoms, cleaning any surfaces between buyers, or maintaining social distances. 

Alternately, the broker may elect not to have open houses and instead have only individual showings. For example, in some markets, open houses have been completely curtailed; some MLSs have elected to cease open house features on the MLS systems.


See more real estate-related resources surrounding coronavirus on the WRA's coronavirus webpage: www.wra.org/coronavirus.

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