Continuing interpretation of what the "Essential Business" designation means for the Real Estate industry
Letter to our Real Estate Industry Partners
April 21, 2020
To Our Real Estate Industry Partners:
In an effort to provide our real estate industry partners and clients with updates and additional guidance during the ongoing COVID-19 crisis, our office writes to you to address some of the concerns, thoughts, comments, and/or questions we have received in response to last week’s email.
As we have stated, Governor Cuomo and Empire State Development (“ESD”) have deemed real estate services “essential” during this COVID-19 crisis, meaning that showings, closings, and everything in between shall proceed, to the extent possible, while all involved comply with appropriate social distancing and cleaning/disinfecting protocols, as set forth by the Department of Health. Specifically, ESD has stated that “any services and parts therein may be conducted in-person only to the extent legally necessary and in accordance with appropriate social distancing and cleaning/disinfecting protocols.”
While we understand that there are a number of tasks that can be conducted remotely during the home buying/selling process, there are some essential tasks that simply cannot be.
For example, our office has received a number of inquiries regarding whether photographers may continue to photograph the interiors and exteriors of residential properties during this pandemic. It is our opinion, based upon our open dialogue with the Attorney General’s Office as well as our review of Governor Cuomo’s Executive Orders, that photographing/videographing properties to allow for remote viewing by buyers and appraisers is permitted if the above safety measures are followed. Further, the resolution of emergencies, such as furnace repairs and plumbing, heating, and electrical problems is also allowed, while of course using the necessary safety protocols.
Put simply, remote viewing of properties is only possible through the availability of quality photographs and videos; therefore, photographers and/or videographers are essential, pursuant to the ESD’s Guidance on Executive Order 202.6, and may perform their functions as long as strict safety protocols are followed. These strict safety protocols should include social distancing of at least six (6) feet from any other individual, the wearing of face masks if social distancing cannot be safely maintained, and hygienic/decontamination practices, such as handwashing with soap and water, or sanitizing the hands with approved products. The photographer/videographer should also work as quickly and efficiently as possible to remain on-site for as short a time as possible.
Questions such as the above with respect to photographing the interiors and exteriors of residential properties during this pandemic have continued to be brought to our attention by those within the real estate industry, and we will continue to put forth our best efforts to ensure that those questions are answered in an expedient manner.
To wit, as a component of our weekly email to the real estate industry, our office will be including an FAQ, and would encourage all who are able and interested to submit questions to firstname.lastname@example.org, to be reviewed and answered in the following week’s address. If you would like your question to be answered privately (such that the question, for whatever reason, will not be included in our weekly address), please feel free to reach out to any of the attorneys on our COVID-19 Rapid Response Team, and we will do our best to promptly provide answers to your questions. Our first FAQ, making up those questions we have received in large part over the preceding weekend, is included.
As attorneys and business professionals, we feel it would be fundamentally improper if our office were to refrain from assisting those individuals who have a need to go through the home buying/selling process during the current COVID-19 pandemic. Real estate transactions, such as those contemplated hereby and by Governor Cuomo, New York State, ESD, and the like, are occurring throughout the United States, and while COVID-19 maintains its place in the current climate, HoganWillig will continue to do all it can to offer its legal guidance to the real estate industry.
COREY J. HOGAN, ESQ.
Recent COVID Related Questions & Answers
April 21, 2020
- What is the rationale for permitting photographers access to the property?
Photographers provide services to an essential business.
“An entity providing essential services or functions whether to an essential business or a non-essential business shall not be subjected to the in-person work restriction, but may operate at the level necessary to provide such service or function.” Executive Order 202.8
Real estate transactions have been deemed “essential”, with the directive that real estate transactions of all types must be done remotely to the extent possible. Since the remote viewing of property is only possible through the availability of quality photographs and videos; photographers/videographers are essential and may perform their functions so long as strict safety protocols are followed.
Such Protocols Include:
- Social distancing of at least six (6) feet from any other human.
- Wearing a face mask if social distancing cannot be safely maintained.
- Aggressive hygienic/decontamination practices like hand washing with soap and water, or sanitizing the hands with approved product if the photographer has been in contact with anyone.
- The photographer/videographer should work as quickly and efficiently as possible to remain on-site for as short a time as possible.
It is only through good competent stills and videos from a reliable photographer and videographer that buyers can virtually visit properties. In-person open houses are forbidden, which makes the photographer’s role at this time all the more vital.
- Can I lose my Real Estate license?
Your license is issued by the New York Secretary of State; it can be revoked or suspended only for violations of the issuing statute (e.g. falsifying application information, failure to pay license fees) or more generally “fraud, misleading advertising, untrustworthiness or incompetency. Acting in a responsible manner during the COVID period is not evidence of untrustworthiness or incompetency.
“The department of state may revoke the license of a real estate broker or salesman or suspend the same, for such period as the department may deem proper, or in lieu thereof may impose a fine not exceeding one thousand dollars payable to the department of state, or a reprimand upon conviction of the licensee of a violation of any provision of this article, or for a material misstatement in the application for such license, or if such licensee has been guilty of fraud or fraudulent practices, or for dishonest or misleading advertising, or has demonstrated untrustworthiness or incompetency to act as a real estate broker or salesman, as the case may be.” RPL 12-A, § 441-C.1 (a) Revocation and suspension of licenses
- Is HoganWillig familiar with NYSAR notices?
We are familiar with local and national notices/pronouncements on the COVID situation, including, specifically those from NYSAR. There are conflicts in the NYSAR notices and what we have said in our open letters. We are interpreting the Executive Orders, ESD interpretations of the Executive Orders, and existing statutes and regulations, without regard to NYSAR (or BNAR) notices. While those notices may make sense from a health protection standpoint, if New York State’s only concern was to protect the public’s health relative to real estate transactions it would not have designated the industry as an “essential business,” nor would it have kept the County Clerk’s Offices “open” for recording purposes.
- Is HoganWillig saying it is okay for me to put myself at risk? Are they putting themselves at risk?
We are not suggesting you physically take part in a real estate transaction in the customary manner that existed prior to the current COVID-19 Executive Orders. We are saying that you are legally entitled to conduct certain real estate sale and purchase activities, so long as you follow published guidelines and common sense. We ourselves continue to meet with clients, attorneys, and other participants, while following published guidelines and common sense. Always make sure that you understand what your own office’s policies are concerning these issues. No party should take place in activities with which they are uncomfortable or would put them at risk.
- Can clients attend showings?
Whether or not a principal (buyer or seller) attends a showing is up to the principals. Both principals would not necessarily attend even a traditional showing (since many sellers opted not to meet potential buyers face-to-face.) A scheduled showing, minimizing the number of parties (e.g., no friends or relations of the buyer attending), with the applicable sanitization and distancing practices would be acceptable. Other protocols to follow include: isolating pets, putting out paper towels and hand-free soap dispensers, following safety guidelines and common sense wherever possible.
If the buyer does not want to enter the home, you can always fall back on a virtual showing. But this too creates liabilities: why was this not shown, the basement foundation is much worse than it appeared in the video, etc.