How can I control real estate showings in the shadow of COVID-19?
Over the course of the past week, we have fielded dozens of requests for clarification on how property owners and homeowner associations can protect themselves from exposure to COVID-19 in the context of real estate showings. Because of the critical importance that social distancing plays in avoiding catastrophic levels of infected citizens overwhelming our medical resources, we want to share this information with you.
First of all, the severity and peril of the current pandemic cannot be overstated. To the extent that we wind up looking back and figuring out that we did overstate, we should simply be thankful. Taking the right action every minute of every day counts dramatically in this fight against this virus which threatens our physical, emotional and financial health.
With that, here are points to keep in mind when it comes to real estate showings:
- A condominium association (or HOA) in Illinois (and likely in all jurisdictions) has the right to impose reasonable rules and regulations in the operational management of their properties. In these circumstances, this means that associations may altogether prohibit third party access to inspectors, prospective buyers, agents and other non-essential parties in connection with a real estate transaction. As more and more jurisdictions imposed “Shelter-in-Place” orders, this becomes a moot point as those orders already dictate that those third parties should not be attempting to conduct business as usual. But even where such orders are not in effect, until such time as our governments can assure us that the crisis has been contained and the infection rates have begun to decrease, associations have legitimate basis for imposing a ban on third party entry and for requiring that all such showings or inspections be postponed until a later date. The collective health and welfare of the owners and residents of the association must come before the financial incentives of a small number of owners looking to sell their units.
- A homeowner that is trying to sell their home and thus is engaged in showing the home to potential buyers may elect to place restrictions on such access, such as limiting the number of people allowed into the home, or requiring that anyone coming into the home wear protective gear or use sanitizing products before entering. If a party does not wish to comply with those requirements, they can be denied access and the potential buyer is, of course, free to move on to another home prospect.
As an aside, given the volatility in the financial markets, and given the unprecedented reach of the shutdowns resulting from this pandemic (courts, government offices, etc.), we recommend that, if at all possible, sellers shelve plans to sell their homes for a brief period of time because we are seeing that many of the recently inked contracts are falling through anyway, due to fears, job losses, income losses and changing lending environments. For the better of our nation and our world, we need to breathe deep, accept that we must all sacrifice together and pause our commerce where possible for a few weeks.
We at Erwin Law are here to help during these challenging times.