These are challenging times for many professionals, requiring us to re-think our practices and ways of connecting with people. This is especially so for real estate agents and brokerages. While real estate services have been declared essential in Ontario, agents and brokerages still need to ensure they are following the social distancing requirements to ensure the safety of their employees, agents and clients. This means social distancing in offices and at showings. Brokerages and agents are under tremendous pressure to help their clients and ensure the success of their businesses, and at the same time ensure that they continue to comply with all the rules and regulations that govern their industry.

Regulators are also essential services and so it’s important to keep in mind that if you run afoul of the rules governed by the Real Estate Council of Ontario (RECO), you may end up with some unpleasant consequences. Complaints to RECO are a risk that is heightened in this new world, with stresses on buyers and sellers piling up. Their agent may end up the target of this fear, frustration and oftentimes – desperation in the marketplace. This is no time to be complacent with the rules.

With the economy in a virtual free-fall and tremendous job insecurity across most sectors, Canadians are unsure whether they will continue to earn the same income they had been prior to the start of the COVID-19 pandemic. This means that home purchases made prior to the start of the pandemic, but which haven’t yet closed, may no longer be affordable to the buyers. While home prices have remained relatively stable so far, incomes have not. This has led to a significant challenge in the industry. Below is a discussion of some commonly asked questions and issues faced by realtors in today’s new reality.

Do you need an in-person showing?

Sometimes the answer to this will be “yes”. What protections do you have in place to ensure the health and safety of all involved? There could be potential liability if you conduct an in-person showing without taking special measures to mitigate any risk of the participants contracting COVID-19. Here are some options to consider which can protect the seller, potential buyers and their agents and reduce your own legal liability:

  • Consider a sign-in sheet for all visitors confirming, to the best of their knowledge and belief, that they are in good health in relation to the virus.
  • Have visitors confirm they have not travelled outside of Canada in the last 14 days and have not been in contact with someone who has.
  • Ensure each visitor leaves their contact information so you can contact them later if you discover that they are potentially at risk of infection based on their attendance at the showing. Be sure to keep their contact information confidential as it is personal information and legally protected. You also cannot use their contact information to send them electronic marketing materials in the future unless they consent to it. An alternative is to keep a list of all agents who brought their clients to the showing so that you can inform them if an issue arises.
  • Have each visitor (and seller) sign an agreement stating that they release the agent and brokerage from any claims resulting from any party contracting COVID-19 as a result of the in-person showing. Participation in the showing must be done with the agreement that each person is participating at their own risk of contracting the virus. For potential buyers and their agent, this could be part of the sign-in sheet.

What if your client is unable or unwilling to close on the purchase?

The Real Estate and Business Brokers Act (“REBBA”) disallows any agent or brokerage to encourage any party to the agreement to break the agreement for the purpose of entering another such agreement. What this means is that if your buyer-client can no longer afford the home they agreed to purchase and they want to purchase another less expensive home, you would be best advised to stay out of that conversation. If the buyer fails to close on the purchase, they will not only lose their deposit, but will be liable to the seller for any damages incurred by their failure to close on the purchase. This decision not to close should be the buyer’s decision alone as they will be at risk of being sued by the would-be seller if they fail to close on the transaction.

What if your client wishes to sell their home quickly?

There are many people who had purchased homes with the hopes of then selling their homes prior to the pandemic hitting. There can be a tremendous amount of fear and desperation for these clients about owning two homes for longer than they can afford to. Don’t let yourself get pulled into this desperation. All the rules relating to truthfulness and disclosure of material facts remain in effect. Be careful of adhering to the Code of Ethics and the laws pertaining to the trade in real estate. Don’t hesitate to contact a legal professional for advice and guidance in these stressful times in order to better protect yourself and your license down the road. Any representation that you make to help your client list and sell their homes must abide by all the same rules as always. The pandemic does not change your professional obligations.

What if someone makes a complaint about you to RECO?

The fact that someone makes a complaint against you does not automatically mean that you’re in trouble. But unless it is clearly frivolous or irrelevant to your obligations under REBBA, the regulations or the Code of Ethics, RECO will likely conduct an investigation. This may mean simply having you answer questions of an investigator, or it may be more involved. Any correspondence from RECO should be taken seriously and responded to promptly. An experienced lawyer can help you navigate this process and reduce some of the stress that is inevitable in these circumstances.

These are challenging times. Whether you focus on leasing or sales, or both, your business will undoubtedly be affected by this unprecedented pandemic. Keeping calm and maintaining your professional standards will help you weather this extended storm as smoothly as possible.

To discuss your unique situation, please call (416) 953-3334 or send an email to: today.

NOT LEGAL ADVICE. Information made available on this website in any form is for information purposes only. It is not, and should not be taken as, legal advice. You should not rely on, or take or fail to take any action based upon this information. Never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. Siskind Doyle LLP professionals will be pleased to discuss resolutions to specific legal concerns you may have.