Question: I am the listing agent for a pending sales transaction. My seller just informed me that she has tested positive for COVID-19. What should I do?

Answer: Unfortunately, this has become a more common occurrence lately, given the recent surge of COVID cases. Here are some general guidelines to consider if your seller tests positive for COVID:

• Stay Safe: First and foremost, take any and all precautions you can to keep yourself and others safe. Wear protective face coverings, maintain social distancing, wash your hands with soap, and do not jeopardize your own well-being. 

• Address Any Disclosure Issues: Discuss with your seller as to whether the seller should disclose his or her health condition to the buyer or others, depending on whether the seller has already exposed them to COVID or may be exposing them in the future. Sellers who signed the C.A.R. Coronavirus Property Entry Advisory and Declaration (PEAD-S) have agreed to inform you as the listing agent of any change to their health condition. However, the PEAD-S does not explicitly give you the permission to disseminate that information to others. So, to avoid any misunderstandings, get your seller’s written permission to disclose to the buyer and others before doing so. You can ask the seller to complete and sign a C.A.R. Addendum (ADM), and check the box that the seller is amending the Transfer Disclosure Statement (TDS). Of course, amending the TDS in this manner may give the buyer a 5-day right to cancel, even if the buyer has removed all contingencies. However, on the flip side, providing a written disclosure with a right to cancel is arguably the best way to protect the seller from potential liability. Whether disclosure is legally required as a material fact affecting the value or desirability of the property, depends on the exact facts and circumstances surrounding the seller’s situation. That legal determination will ultimately be made, if needed, by a judge, jury, or arbitrator, not by us.

• Have the Seller Consider Deep-Cleaning the Property: Sellers with COVID who occupy a property being sold, have kept their deals together by voluntarily offering to have the property deep-cleaned before the buyer enters the premises or takes possession of the property. Nothing in the C.A.R. Residential Purchase Agreement (RPA) specifically requires the seller to deep-clean the property. Yet, doing so (or offering a buyer a credit in lieu of deep-cleaning) may help assuage a buyer’s fears of moving forward with the purchase. As a practice tip, a seller considering deep-cleaning may want to check upfront to see if the cleaning service will provide a deep-cleaning certification or other proof of completion of work for us to give to the buyer.

• Address Any Issues Involving Buyer’s Access to the Property: Under the RPA, a buyer has the right to access the property for 17 days after acceptance (see paragraph 14B(5)). A buyer also has the right to conduct a final walk-through at least 5 days before close of escrow (see paragraph 15). If the infected seller is self-quarantining at the property being sold, hopefully the parties can work something out concerning the buyer’s access as needed, such as, but not limited to, delaying access, arranging for virtual showings, deep-cleaning the property before showings, or revising the seller’s right to possess the property.

• Address Any Other Contractual Issues: Aside from accessing the property, the parties may also have to renegotiate other aspects of the sales contract, such as the timeframes for removing contingencies, taking possession, or closing escrow. If the parties incorporated a C.A.R. Coronavirus Addendum (CVA) into their agreement, the seller may be entitled under paragraph 4B to a 30-day extension to close escrow upon serving the buyer with a Notice of Unforeseen Coronavirus Circumstance (NUCC). Absent a CVA, the parties may still voluntarily agree to extensions or other matters using the C.A.R. Extension of Time Addendum (ETA) or Amendment of Existing Agreement Terms (AEA).

• Seller May Seek Legal Advice: If our seller is unsuccessful in renegotiating the sales contract to the seller’s satisfaction, or if any legal dispute arises, inform the seller in writing (and get an acknowledgment of receipt) that we strongly recommend that our seller consults with his or her own attorney as the seller deems appropriate. Even absent a CVA, the seller may, depending on the circumstances, nevertheless have certain legal rights under a force majeure (or “Act of God”) theory.

-Thank you to Melody O’Leary-Namikas (Ventura Office) 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 December 7, 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.