COVID-Related Issue for Listing Expirations

May 11th, 2020 at 12:19 pm

Listing Agents Beware! If you are taking a new listing or you have a pending listing agreement, you should be aware of the “physically entered” limitation of the safe harbor clause (paragraph 3A(2)) in the C.A.R. Residential Listing Agreement (RLA). The safe harbor clause generally protects your commission for a specified timeframe after your listing agreement expires. However, this protection is only for a prospective buyer who “physically entered and was shown the Property during the Listing Period,” or someone who submitted an offer. 

Because of COVID-19 concerns, some serious prospective buyers may not have “physically entered” the property by the time your listing expires. They may have only taken some sort of virtual tour of the property, e.g. FaceTime with their buyer’s agent. If you are taking a new listing, you may want to consider adding the following language under “Additional Terms” of the RLA:

Given COVID-19 travel restrictions, Prospective Buyers under paragraph 3A(2) include anyone who may not have physically entered the Property, but was nevertheless shown the Property by any virtual method, such as a virtual tour, video conferencing, or FaceTime.

For a pending listing agreement, aside from trying to get an extension of your listing period, you can also consider adding the language suggested above to a C.A.R. Modification of Listing (MT) form for the seller to sign.

-Thank you to Kyle Kemp (Santa Barbara District Manager) for suggesting this week’s legal tip.

Copyright© 2020 Berkshire Hathaway HomeServices California Properties (BHHSCP). All rights reserved. Any unauthorized reproduction or use of this material is strictly prohibited. This information is believed to be accurate as of May 11, 2020. It is not intended as a substitute for legal advice in individual situations, and is not intended to nor does it create a standard of care for real estate professionals.

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