The Government of Ontario ordered all non-essential businesses to close by 11:59 PM on Tuesday, March 24, 2020 due to the COVID-19 pandemic. The government published exceptions to this order in their list of essential workplaces. Notably, the government has deemed real estate an essential service.
In short, the government has signaled that real estate trades may continue. But that doesn’t mean a return to “business as usual.” Ontario remains under a state of emergency, and registrants have a duty to follow the direction of health officials to minimize direct physical interaction. Embracing digital technology is essential in order to reduce the risk of COVID-19 transmission.
Earlier this week, RECO released updated guidance on open houses and showings. In particular, RECO strongly recommended that brokerages and salespeople follow the direction of health officials by declining to facilitate or participate in open houses, and by limiting showings to where they are absolutely necessary.
That guidance continues to apply.
There are many other situations during a real estate trade that typically involve personal contact, such as signing documents and in-person client communications. We strongly recommend that registrants look at technological solutions that can significantly reduce or eliminate the need for these in-person interactions, and discuss alternatives with their clients.
Possible alternatives include:
- Using virtual tours, 360 walk-throughs, mobile measurement applications and digital floorplans instead of in-person viewings
- Using electronic documents and signatures, instead of paper documents
- Using electronic funds transfers instead of certified cheques
- Communicating with clients via written communications, smartphone technology applications, and video conferencing, instead of face-to-face
Am I allowed to continue trading?
Yes, the government has sent a clear signal that real estate trading may continue. However, health and safety remain paramount. Health authorities have asked all Ontarians to reduce or eliminate in-person interactions. We strongly recommend that you work with your clients to find technological alternatives.
Am I allowed to take new listings?
Yes, you may enter into new listing agreements with sellers. However, you are under no obligation to do so.
Before asking your client to sign a listing agreement, make sure they understand the services you are prepared to offer, and how those services will differ compared to what they might have expected from a typical trade prior to the COVID-19 pandemic.
How do I deal with tenant occupied properties?
Tenant-occupied properties pose particular challenges. Though tenants and landlords have respective rights under the Residential Tenancies Act, administered by the Landlord and Tenant Board, particular attention must be paid to the tenant’s health and safety.
Though buyers may want to see the home in-person before committing, you could reduce the number of in-person showings required by asking buyers to assess their interest through virtual options first. If they remain interested, you could work out a plan to safely view the property. Viewings should only occur with the tenant’s consent, however.
Please take great care to discuss with your seller the importance of considering the health and safety of tenants.
Please check the Landlord and Tenant Board’s website for ongoing updates related to COVID-19 and tenants.
I heard some salespeople continue to trade real estate in ways that go against the direction of health officials (for example going door to door to prospect clients). What can RECO do about that?
Everyone, including registrants, must take this crisis seriously for their own health and that of the general public. The Real Estate and Business Brokers Act, 2002 and the Code of Ethics include provisions that require registrants to practice with integrity, to promote the best interests of their clients and to act honourably and professionally. We take these matters very seriously. Registrants who demonstrate a blatant disregard for the protection of the public, by ignoring the direction of health officials during their trading activities, will face serious sanctions, including possible disciplinary prosecution by RECO.
If my client insists, do I have to agree to use paper documents, physical cheques and in-person communications?
No, as a registrant and business operator, you decide which services you are prepared to offer. You should make those decisions based on the most current guidance and direction of health authorities, which at present is to reduce or eliminate direct physical interaction that could promote transmission of the virus. Help your clients understand the importance of following current direction from health authorities and the risks that come with paper documents and in-person meetings.
Can my seller client decline to allow showings in advance, but allow buyers to make their offers conditional on a satisfactory showing?
There is nothing in the Real Estate and Business Brokers Act, 2002 that would prohibit such a practice. However, you should seek advice from your brokerage and legal counsel about the pros and cons before recommending such a clause to a client. When representing the seller, be sure they understand the risks that may come from this approach. Consider including language that would protect the seller in case the buyer then refuses to provide or unreasonably delays a final, written decision about whether they will waive the condition or not.
There is no clear alternative to certain in-person aspects of a real estate trade, such as home inspections or measuring the property to confirm dimensions prior to listing. What does RECO recommend?
RECO is considering these sorts of questions, but in this rapidly evolving situation, we don’t have all the answers. We are looking to the profession, which continues to develop innovative solutions to these sorts of challenges. We invite brokers and salespeople to share these solutions with their colleagues and their local boards.
How does the government’s announcement impact RECO’s services?
Though RECO has been identified as an essential workplace, RECO will continue to operate and provide information about COVID-19 and real estate. Please remember that RECO has no authority to direct the cessation of real estate trading in Ontario.
RECO has transitioned all of its staff to working from home, in order to continue to deliver key services while protecting their safety. RECO’s core services (registration applications, transfers, Mandatory Continuing Education and complaint handling) are all available online. For the latest information about RECO’s service delivery, please visit RECO’s COVID-19 Notices page
COVID-19 and the professional liability insurance program
Many registrants are asking if the professional liability insurance program provides coverage for claims arising out of events related to the COVID-19 pandemic. For information on this issue, please see this document from the insurance provider, Alternative Risk Services.