QUESTION: I learned today that there are new procedures and revised CAR COVID-19 forms. What is the latest information and should I use the new CAR forms?
ANSWER: The COVID-19 pandemic has changed many aspects of our personal and professional lives; it has tested our ability to adapt to an ever-changing regulatory landscape. The May 12, 2020 Guide from the Department of Health and Cal-OSHA as to how in-person showings of listed properties need to be handled has lead CAR to implement new/revised policies, procedures, forms and industry recommendations in the hopes that (a) as an industry we can help curtail the spread of the coronavirus (aka “flatten the curve”); (b) that real estate practices will be in conformance with state regulations; and (c) that these efforts will enable our industry to move more quickly towards the complete termination of any further sheltering in place requirements.
CAR has developed several important Guides and has made other materials available such that we recommend the following documents should be carefully reviewed by everyone:
- Real Estate Best Practices Guidelines and Prevention Plan for Showings (BPPP dated 5/27/20)
- Pictogram Sign (2 forms collectively called PRE)
- Industry Guidance Showing Rules FAQ
- Quick Guide – Compliance with the Industry Guidance Showing Rules
These documents are available online at: https://www.car.org/riskmanagement/covidlegaldocs
NOTE: The BPPP must be signed by each Broker to establish that the BPPP is the Broker’s Prevention Plan; that signed document needs to be maintained by the Brokerage, HOWEVER, that signed version does not need to be attached to any of the PEAD forms.
NOTE: The BPPP adopted by the Broker must also be agreed to by all of the Broker’s Agents. The most efficient means of establishing compliance with that requirement is for the Broker to take all the following steps:
(1) incorporate the BPPP into the Brokerage Policy and Procedures Manual;
(2) send a copy of the BPPP to all Agents via email;
(3) the email transmitting the BPPP to the Agents should include a a reminder that the Agents have agreed, as part of their Independent Contractor Agreements, to comply with the Company’s Policy and Procedures; and
(4) that email should also state that the Broker requires all Agents to comply with the BPPP.
As a result of the newly-revised best practice guidelines, CAR has also announced that it has revised the RLA-CAA and bifurcated the PEAD form into two different forms effective May 27, 2020. This Weekly Practice Tip will focus on the latest changes to the three (3) CAR forms that relate to the listing and sale of residential property:
1. LISTING AGREEMENT CORONAVIRUS ADDENDUM OR AMENDMENT (RLA-CAA 5/27/20)
The introductory paragraph was modified to reference “Health Official and other Government mandates and recommendations” along with the state and local orders and to specify that Sellers and Agents must comply with all of these regulations, collectively referred to by CAR as “COVID-19 Directives.”
This two-page Addendum now includes a provision that if the Seller agrees to allow potential buyers and services providers to have access that these visitors must comply with the CAR Best Practices Guidelines Prevention Plan (or the Listing Agent’s plan if it is substantially equivalent to the BPPP). However, the BPPP is automatically attached to the Listing Agreement Addendum as is the new PEAD-S form.
The RLA-CAA also makes it clear that if the Seller is allowing access for Showings, Marketing Activities and Post-Acceptance/Necessary Sale Activities that the access is only permissible if every visitor signs a PEAD-V form and the Broker’s Duties include providing the Seller with a copy off “all PEAD forms signed by” anyone entering the Property.
The Seller and Broker can agree on who is to pay for providing required face coverings and sanitizing products as well as whether or not a service is hired to clean and disinfect the Property.
Special attention should be focused on the new language in Paragraph 5B (1) “Showing Requirements” that specify that the listed property must have personal protective equipment available:
2. CORONAVIRUS PROPERTY ENTRY ADVISORY AND DECLARATION – SELLER/OCCUPANT (PEAD-S)
This new, one-page form is designed exclusively to be used with Sellers and any adult who is an occupant. It eliminates the information applicable to visitors that was in the prior PEAD forms. The signature block has been changed so that the acknowledgement is not required but it is still the best practice. Unlike the last version of the PEAD form, the PEAD-S does not specify that it needs to be signed each day; however, the best risk management advice is to have the Seller/Occupant of occupied property sign a new PEAD-S each day that there will be visitors.
The acknowledgment section for the Buyer’s Agent and Seller’s Agent are now not required but it is still the best practice to prove the PEAD-S was delivered.
The Seller/Occupant is still required to declare that to their knowledge they do not have COVID-19 and are not aware of having been exposed to it or are experiencing any symptoms. If those representations are not true or if they change, then the person signing the form must notify the Broker and the exceptions to the representations must be detailed in the blank lines in Paragraph 5.
3. CORONAVIRUS PROPERTY ENTRY ADVISORY AND DECLARATION – VISITOR (PEAD-V)
This new, two-page form is designed exclusively to be used with all Visitors each day that the Visitors visit the Property and it can be used with multiple properties. These rules are detailed in the two parenthetical statements directly below the title:
This form is designed to be provided with the BPPP which is automatically attached to the online form. As such, if the Listing Agent is using the BPPP, the Buyer’s Agent is able to prepare the PEAD-V with the correct attachment. The BPPP attachment does not need to be signed by the Listing Broker to be a valid part of the PEAD-V. Everyone signing the PEAD-V agrees to follow the BPPP and the posted rules.
All Visitors (whether they are potential Buyers/Tenants, Agents, Appraisers, Inspectors, Stagers, Contractors, repair people and vendors) sign the PEAD-V to be allowed access regardless of the reason why they are accessing the property.
The date the Visitor signs the PEAD-V should be the date of entry but if the form needs to be transmitted to the Seller’s Agent the day before the scheduled appointment, then it can be dated as of the date that it is signed.
Minors do not sign the PEAD-V but their names need to be identified in the Additional Terms section by the parents who do sign the form.
Visitors are still required to declare that to their knowledge they do not have COVID-19 and are not aware of having been exposed to it or are experiencing any symptoms. If those representations are not true or if they change, then the person signing the form must notify the Broker and the exceptions to the representations must be detailed in the blank lines in Paragraph 8.
PRACTICE TIPS
- The only logical way that all Brokers can effectively comply with the Cal-OSHA requirements for showing property listed for sale is to adopt the CAR Real Estate Best Practices Guidelines and Prevention Plan for Showings (BPPP dated 5/27/20) as their brokerage plan. Brokers must make sure all Agents affiliated with the brokerage agree to comply with requirements detailed in the BPPP by incorporating the BPPP into their Company Policy and Procedures Manual which Agents agree to follow in their Independent Contractor Agreement.
- Although it is cumbersome, a BPPP form should be attached to all PEAD-S and PEAD-V forms.
- The PEAD-S and PEAD-V forms needs be signed and transmitted electronically as much as possible but the BPPP and CAR’s Guidelines emphasize that anything that is given to or received by anyone should not be in paper form.
- Although CAR has put the burden on Listing Agents to provide the requisite personal protective equipment, it will be more practical for all Agents to maintain supplies of facial coverings, disinfecting wipes and hand sanitizers regardless of who they represent to make sure that anyone visiting the Property will be able to comply with the posted rules.
WEEKLY PRACTICE TIP: DO NOT FORWARD TO CLIENTS. This Weekly Practice Tip is for the exclusive use of clients of Broker Risk Management and their agents. It may not be reproduced or distributed without the express written consent of Broker Risk Management. The advice and recommendations contained herein are not necessarily indicative of standards of care in the industry, but rather are intended to suggest good risk management practices.
© Copyright Broker Risk Management 2020 05/28/20