1. We are supposed to close next week but the buyer has tested positive for COVID-19 and wants to terminate the contract. Can either party terminate the contract based on a COVID-19-related diagnosis, exposure, or quarantine?

There are very few contracts related to residential real estate sales that permit termination based on something like the COVID-19 pandemic. However, it might be possible to delay the closing if both parties agree to do so. This is the case if a reasonable delay of the closing date due to illness or stay-at-home orders is proposed and can be negotiations to the standards of both parties. It is the responsibility and right of the parties involved to negotiate any amended terms based on the current health pandemic.


2. My seller has a positive diagnosis for the coronavirus. What are my obligations to release that information to the buyer, inspectors, and members of the public who have been to the property?

Should you learn that a seller has the virus, you are obligated to inform everyone who had contact with the person selling the property or was inside of the property even if the client was not present. This includes potential buyers, as well as inspectors and others who were on-premises. This is part of your legal duty to inform. Additionally, you must inform your doctor and city authorities of your exposure.


3. Does my seller have to disclose to potential buyers if he or someone in his household has tested positive for COVID-19?

Absolutely and he or she is legally obligated to do so. They must do so even if the infected person did not directly come into contact with anyone. The virus is a health concern in real estate just like any other material defect. The virus has been shown to have the ability to survive on some surfaces for several days after exposure. This means someone could contact the illness even if he or she never came into direct contact with an infected person.


4. Can the buyer ask the seller to have the property deep cleaned after the seller moves out?

Buyers can make whatever requests they deem reasonable and necessary when writing the offer to buy. Under our current circumstances, this would include a deep cleaning before moving in. The cleaning would be done at the expense of the seller. If the person selling refuses, the buyer’s option would be to wait to take physical ownership of the property for several days after the previous owner has left. This ensures that any trace of the virus would be gone by the time they move in.


5. May I ask clients or others I interact with in my real estate business if they have traveled recently or have any signs of respiratory illness?

It is within your rights to request travel information from your clients or anyone with whom you interact. Because the chances of being exposed to COVID-19 when traveling are so high, everyone has a right to know if someone with whom they are interacting has recently (within 14 days) has traveled. This is especially true if that travel was to an area with a moderate to a significant outbreak of the virus. If a client has traveled recently and you are concerned about exposure, you can request to meet virtually or postpone upcoming meetings.


6. Can my buyer terminate his purchase and sale contract due to COVID-19 and receive his earnest money back?

Buyers who are paying cash cannot terminate a purchase or sales contract, even under the current circumstances. If a buyer already was permitted termination rights under the current agreement, he or she can do so, but this is rarely the case. That right needs to exist and cannot arise due solely to COVID-19. If the two parties agreed to include a COVID-19-related addendum in their contract, that would allow either party to end the transaction based on that clause.


7. My client is a cash buyer who lost her job due to COVID-19 related issues and wants to terminate the sales contract.

Cash buyers typically would not be able to terminate a sales contract due to the COVID-19 outbreak. It varies from situation to situation, and buyers and sellers typically can terminate if a buyer can no longer fund the purchase. However, cash buyers lack this power. Even with the current health pandemic, a cash buyer would need to honor the contract as if nothing were happening. If you have concerns, you should review your contact and/or speak to your attorney.


8. Is an executed deed effective even if it has not been recorded in the real property records due to delays under COVID-19?

It is. Deeds become effective when they are executed even if they are not recorded immediately. Chances are the current buyer and the seller will not even know if the deed has been recorded and it will only become a problem or future transactions. This is why it is so important to eventually record the deed as soon as possible, once it is safe to do so. If you have questions about the deed to your property and how COVID-19 affects it, speak to your attorney.


9. How could the pandemic affect the real estate market?

Nobody knows what long-term impact the virus will have on the real estate market or any other sector. At the moment, it has had a major effect on it and every other area of life. Many have noted that existing trends have sped up in response to the virus. In other cases, trends reversed and we are dealing with an entirely different situation now than we were a few months ago. Long-term, how the virus will affect real estate depends on the region, extend of the stay-at-home orders, and how long those orders remain in place.


10. How could the pandemic affect my ability to qualify for a mortgage?

It varies from case to case. Those who want to apply for a mortgage right now could see a major effect, even if their income level remains the same. If you lose your job or even experience a temporary lapse in income, it could affect your ability to qualify for a mortgage in the coming months or even years. The extent of how you will be affected depends on the extent to which COVID-19 has affected your earnings.