April 24, 2020

Solicitor's Corner: Real Estate Transactions in a COVID-19 World



The growing pandemic of the Coronavirus (“COVID-19”) has upended life as we know it. In particular, it has caused the real estate industry to grind to a near halt due to COVID-19 and the orders and directives that have resulted in its wake. Let’s review the events that have recently unfolded and their effect on the real estate industry.
 
GOVERNOR WOLF’S ORDER AND AMENDED ORDER
 
On March 19, 2020, Governor Tom Wolf issued an order directing all non-life-sustaining businesses in Pennsylvania to close their physical locations until further notice to slow the spread of COVID-19 (the “Order”). Remote working and telework operations remain permitted as long as social distancing is observed, and other mitigation measures are employed. With enforcement measures looming, a significant number of businesses sought waivers from the Order and further clarification as to whether their business is “life-sustaining” under the Order. Real estate and its related activities were not deemed to be “life-sustaining” under the Order. On March 25, 2020, Governor Wolf issued a Stay-at-Home order for Lehigh and Northampton counties and people are only permitted to leave their home for food, medicine and/or medical treatment, and to work at a business deemed “life-sustaining.”
 
At the time of this article, Pennsylvania Land Title Association sought an industry-wide waiver from the Order to permit real estate settlements; however, no response has yet been received on that request. Most businesses that do not fall squarely within the parameters of the specific “life-sustaining” businesses established in the Order have closed their physical offices and, to the extent possible, are operating remotely. By now you have also likely encountered others that have determined that their physical operation can stay up and running based upon their reading of the Order and their interpretation of their business activity. Regarding title companies, most agents have closed their physical offices and others have taken a very broad read of the Order and determined that, as “Insurance Agents” or “Credit Intermediaries,” their physical operation can stay up and running. Even so, there is a caveat in the Order that “in-person sales/brokerages are prohibited,” which certainly sounds a lot like a physical settlement.
 
There is litigation challenging the Governor’s statutory authority to order the closure of private businesses, so much of this may be settled in the courts. But how? And when? Regardless of the Governor’s order and any one interpretation of it, it is a complex matter and a challenge to determine how to operate in compliance with the Order, sound practices, and without compromising the health and safety of your staff, your clients, your colleagues, and the public.