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Tips Before You Add COVID-19 Legalese

Minimizing the chance of liability claims against your brokerage and your clients starts with clear communication about those risks.

September - October
2020

During the pandemic, of course you want to serve your clients to the best of your ability while being attuned to health and other risks. Minimizing the chance of liability claims against your brokerage and your clients starts with clear communication about those risks. While you should always consult with your broker and an attorney to assess the risk and the effectiveness of addenda and other contractual language, here are general guidelines on legal forms related to the pandemic:

Hold harmless agreements: In general, a hold harmless agreement protects a party from liability if another party is injured on their property or is injured during an inherently dangerous activity. In the case of a pandemic, where the effects of the associated disease are not only widely known but also widespread, easily transmitted, and unlikely to show symptoms for days after exposure, proving causation could be difficult from a legal standpoint.

Purchase agreement addenda: Coronavirus closures and other government orders in March left many practitioners scrambling for an addendum to the purchase agreement that specifically addressed potential delays related to the pandemic. Many brokerages and REALTOR® associations have created these addenda, which extend the closing date if necessary, and address other issues including the potential unavailability of inspectors or appraisers; a party’s inability to travel to sign documents; a party being subject to a mandatory quarantine; and closings of or delays in relevant government and business services, such as deed recorders, lenders, and title or escrow companies, necessary to close the transaction. View a sampling of such forms by downloading “2020 Legislative Meetings RMIC Workgroup Forms & Addendums” at nar.realtor/RM-RMIC.

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