How has the coronavirus relate to our real estate agency law?

How has the coronavirus relate to our real estate agency law?
Government officials with Dr. Anthony Fauci on the right

With the world and the U.S. in turmoil and no businesses actually functioning, I am hoping this column gets published, but we’ll hope for the best!

I as well as everyone else is hunkered down in their homes, eating and unfortunately gaining weight that they probably don’t want or need (I’ve got excellent genes and really don’t gain weight much at all, but this situation might be my first exception), but exercising as best that we can, playing video games with and without kids and grandchildren.

We are all somewhat pinned down, can’t go out anywhere, except sporadically to the supermarket, pharmacy, bank, maybe a park (I went to Steppingstone Park in Great Neck on Monday (wearing surgical gloves and a scarf covering my nose, much good that would do, in case I touched anything or came in contact with anyone), at the urging and insistence of my wife, Irene.

The place was virtually empty except for a few couples and individuals roaming around and sitting at the end of the dock). However, we do have our devices and online service providers streaming pretty much anything we want either by TV, cell, iPod, I Pad, laptop or pc constantly and consistently checking and observing updates, emails, Facebook, Twitter or LinkedIn for what’s next in the coronavirus (Covid-19) saga and wondering what day and time this will subside and eventually end.

As much as we need and want to go out and mingle and converse with our friends, neighbors and business associates this is surely and absolutely counteractive to what we need to do and as they say, we need to flatten the curve and that means staying away from people by being in your homes and make-believe that we all have the coronavirus (Covid-19) and just self-quarantine and then we’ll all contribute to flattening the curve and minimizing and eventually eliminating this scourge of a pandemic.

The financial cost is now outrageously high, stock prices are down 30%+, but the Dow’s 25 Industrials have rebounded up to 1,700 points, but has been vacillating up and down as of this writing (however, I watch the S & P, which to me is a much better indicator of our markets) but we’ll see what happens by the end of the day and whether or not the Congress’s up to $2 trillion package will pass both houses!

My opinion is that the bailout for people and businesses just might be a much greater sum than anyone might predict, expect or even can imagine.

A recession is already here, whether or not you are aware of it and what the current ramifications are and will be far-reaching with unemployment most likely reaching into the double digits range, some banks will most likely fail for sure, but most importantly and critically we have failed, by not being much, much more proactive, way in advance of this most deadly virus creating a worldwide pandemic.

Who was and is in charge of our government? Were they and are they constantly asleep at the wheel, waiting for an accident, major crash or this current insanely damaging pandemic?

Well here we are again, them playing “Monday morning quarterbacks” and us eventually holding the bag in the future for the bailout that was somewhat avoidable if we had been much more proactive and prepared years ago.

Just Google Dr. Michael Osterholm and view, listen and read what he had conveyed to our government officials and the two books that he wrote in 2000, “Living Terrors: What American Needs to Know to Survive the Bio-Terrorist Catastrophe” and again in 2017, “Deadliest Enemy: Our War against Killer Germs” as well as his most recent podcast on March 20, with Joe Rogan, renowned podcaster:

Back to real estate and the relationship between how brokers and salespeople disclosure their obligations and how our government has responded to the Covid-19 Virus. There are seven things that all brokers, associate brokers, and salespersons must be aware and cognizant of as fiduciary duties when dealing with sellers, investors, purchasers, renters and lessees of residential and commercial properties.

They are the following: reasonable care, undivided loyalty, confidentiality, full disclosure, obedience and duty to account the (shorter and abbreviated version=CCLOAD).

How many in our industry follow these legal rules and regulations, is probably far and few between and many more that should be but don’t. I would be very suspect for anyone disagreeing with my belief. After 38 years of being in the industry (26 as a broker and agent and 12 as an investor), I have personally experienced and seeing how many, many agents handle their client sellers and customer buyers.

Many times they become so attached to their buyers that as sellers or brokers agent they forget who their obligation and loyalty are too! Yes, sometimes we lose track of this because we might be around our customers more than the sellers, but it doesn’t matter, because you were hired by one person, the seller.

Yes, there are exceptions as to when you are a dual agent, where you do not have those 7 exclusive obligations to either seller or buyer.

However, my feeling is that if you are upfront and candid with both parties then it becomes less of an issue. It’s really about the transaction and having both parties come to an immedicable agreement on price, terms and conditions (transaction agency is the law and practiced in Texas and other states).

I have done numerous transactions this way and have never had any issues that I could not handle or negotiate. The reason that many don’t choose this path of agency, is that it is either truly misunderstood and don’t understand how to perform it properly or agents choose the path of least resistance; while at the same time still lose sight of the fact of who they legally represent!

Now let’s take our government in relation to our disclosure rules in real estate. Was our government candidly transparent and did they disclosure and did they have a duty to account to all of us all information and factors within the scope of how to properly and safely deal with the corona Virus?

Not really and very much poorly executed. There was surely no reasonable care from the get-go either as more and more of our citizens got sick and died! Where was their undivided loyalty to us (make-believe we were a seller) or to some other government entities?

And you know who I am talking about! Yes, there sure was confidentiality to themselves and that this virus would just pass and not to worry until it became extremely apparent how treacherous and deadly it was and had become to our country, especially those 25,000-plus New Yorkers and other states like California and many more and that it wasn’t going anywhere anytime soon!

Would we as brokers and agents withhold information from our clients who we represent? Probably not but those who are still not disclosing correctly are still breaking the law but still doing it anyway.

It’s the same as all those “spring break” beachgoers and the fact that the governor of Florida and California waited way too long to close down the beaches to minimize the infection rate that was escalating.

Although the action was finally taken to close the beaches, their fiduciary duties to the public were so poorly executed in this worst of times! The last two fiduciary duties are obedience and loyalty that one has to their clients!

Was our government obedient and loyal to us when they should have been, instead of being “Monday Morning Quarterbacks,” in one of the most critically, poorly prepared and damaging events in our history, causing devastation to the health of our country’s people, economy and financials?

Thank G_D, they did finally wake up, but it was too little too late for those that were infected and passed it on to those who got severely sick and those that died. Our economy, businesses and financials will recover after the pending recession, but we are not out of the woods by any stretch of one’s imagination and have a considerable way to go.

But, what do you say to those families and individuals that lost loved ones who suffered and are no longer with us and those that lost jobs, income and wealth? You can decide and come to your own answers and conclusions to my question.

Philip A. Raices is the owner/Broker of Turn Key Real Estate at 3 Grace Ave Suite 180 in Great Neck. He has earned designations as a Graduate of the Realtor Institute and also as a Certified International Property Specialist. Just email or snail mail (regular mail) him with your ideas on future columns with your name, email and cell number and he call or emails you back. For a consultation, he can be reached by cell: (516) 647-4289 or by email: [email protected]

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