COVID-19 raises legal concerns related to evictions and fair housing.

COVID-19 has altered the rulebook for property managers and investment property owners for the foreseeable future. Balancing the pressures faced by tenants struggling to pay rent due to job loss with your need to keep up with expenses and safety measures presents distinct challenges. Two of the biggest concerns affecting rental properties are the patchwork of eviction moratoriums and the unique fair housing issues and disability protections related to COVID-19. Here’s how to navigate these issues.

Evictions and Tenant Rights

The CARES Act enacted in late March instituted a temporary moratorium on certain evictions. Through July 25, the law prohibits landlords from initiating eviction actions or charging late fees or other penalties for nonpayment of rent to tenants residing in a property that participates in a federal assistance program or is subject to a federally backed mortgage or federally backed multifamily mortgage loan. That said, however, this temporary moratorium neither precludes a landlord from initiating an eviction for reasons other than nonpayment nor relieves tenants from responsibility for payment of the late rent once the moratorium is lifted.

But take note: After the moratorium is lifted, the CARES Act requires landlords to provide 30 days’ notice before evicting a tenant for nonpayment. And states, along with numerous counties and cities, have similarly responded to concerns over displaced tenants during COVID-19. As of May, a reported 42 states and the District of Columbia, plus many counties and cities, have also issued eviction moratoriums.

These pauses may be more expansive than the CARES Act. This means that property managers and owners should be sure to familiarize themselves with all applicable laws before initiating an eviction proceeding or taking any action against a tenant for nonpayment of rent.

Fair Housing Compliance

The pandemic also raises unique fair housing issues, including whether COVID-19 constitutes a disability under the federal Fair Housing Act. While a court may ultimately need to resolve this question, given the severity of the virus, it is advisable that COVID-19 be treated as a disability for purposes of the act.

Property managers and other real estate professionals should be sure to provide equal housing opportunities for individuals with disabilities, and engage with tenants who request reasonable accommodations due to COVID-19. Such reasonable accommodations may include allowing a tenant to remain in the unit beyond the lease term in order to self-isolate, temporarily ceasing any entry by others or showings of the unit, and making an exception to a no-visitors policy for caregivers.

All that said, the Fair Housing Act doesn’t require real estate professionals to provide assistance or housing to someone who poses a direct threat to the property manager or others. So, unless the threat posed can be mitigated by a reasonable accommodation, the property manager may not be required to assist the individual.

Keep in mind these fair housing best practices for working with the public in the wake of COVID-19:

• Limit in-person activity, and instead leverage technology to meet with prospective tenants, complete rental applications, and execute leases.
• Offer contactless key exchanges.
• Take precautions when in-person activity must take place. Ensure social distancing, require face coverings, and limit the number of people at a showing or meeting.
• Consider using a health questionnaire to ask all prospective tenants to self-disclose if they have COVID-19 or are experiencing symptoms.

To learn more about fair housing compliance during the pandemic, visit nar.realtor/coronavirus.

©National Association of REALTORS®
Reprinted with permission

Five measures brokerages are taking that you can adopt to fight discrimination and foster inclusion.

Since the killing of George Floyd in May, the topic of systemic racism has galvanized the nation’s attention. Many real estate professionals are becoming part of the movement for change. Here are five measures brokerages are taking that you can adopt to fight discrimination and foster inclusion.

1. Examine diversity in your office, and make sure many different voices are represented in the discussions you have at work. Brokerage leaders can create a task force to address racial disparities that may be present within the company.
2. Adopt policies that stand firmly against discriminatory practices and offensive communications, including inappropriate social media posts.
3. Develop partnerships with key community players like city councils, chambers of commerce, police departments, and health care facilities to help mobilize ideas for change.
4. Partner with local Black-owned businesses to help promote them and share referrals.
5. Learn from history. Research the historical real estate practices of redlining, steering, and blockbusting so you and your team are aware of where the industry has been. Find NAR resources for creating a more inclusive business at magazine.realtor/inclusive-plan.

Sources: Sandra Butler, AHWD, Sibcy Cline Inc., Cincinnati; Raelenna Ferguson, Realty Executives Edge; Cape Girardeau, Mo.; John Graff, AHWD, SFR, Ashby & Graff Real Estate, Los Angeles; Julia Israel, AHWD, Keller Williams Integrity Realty, Minneapolis; Nate Johnson, AHWD, GRI, Real Estate Solutions, St. Louis

©National Association of REALTORS®
Reprinted with permission

Minimizing the chance of liability claims against your brokerage and your clients starts with clear communication about those risks.

During the pandemic, of course you want to serve your clients to the best of your ability while being attuned to health and other risks. Minimizing the chance of liability claims against your brokerage and your clients starts with clear communication about those risks. While you should always consult with your broker and an attorney to assess the risk and the effectiveness of addenda and other contractual language, here are general guidelines on legal forms related to the pandemic:

Hold harmless agreements: In general, a hold harmless agreement protects a party from liability if another party is injured on their property or is injured during an inherently dangerous activity. In the case of a pandemic, where the effects of the associated disease are not only widely known but also widespread, easily transmitted, and unlikely to show symptoms for days after exposure, proving causation could be difficult from a legal standpoint.

Purchase agreement addenda: Coronavirus closures and other government orders in March left many practitioners scrambling for an addendum to the purchase agreement that specifically addressed potential delays related to the pandemic. Many brokerages and REALTOR® associations have created these addenda, which extend the closing date if necessary, and address other issues including the potential unavailability of inspectors or appraisers; a party’s inability to travel to sign documents; a party being subject to a mandatory quarantine; and closings of or delays in relevant government and business services, such as deed recorders, lenders, and title or escrow companies, necessary to close the transaction. View a sampling of such forms by downloading “2020 Legislative Meetings RMIC Workgroup Forms & Addendums” at nar.realtor/RM-RMIC.

©National Association of REALTORS®
Reprinted with permission

Resources from NAR can help you develop more inclusive business plans.

Your association can help you make real strides toward a more inclusive business. For a decade, the National Association of REALTORS® Code of Ethics has gone beyond the law when it comes to fair housing. But many real estate practitioners are looking for ways to make a deeper and more visible commitment to equality. Resources from NAR can help.

1. Display the Equal Housing Opportunity logo on your company windows and in advertising. Decals, as well as a customizable poster, are available from the REALTOR® Team Store(link is external), or download the logo from nar.realtor.
2. Write a diversity and inclusion statement to promote as part of the personal or company mission. NAR’s statement says, in part: “We fully embrace perspectives from all walks of life—regardless of race, ethnicity, gender, religion, age, sexual orientation, gender identity, disability, national origin, socioeconomic status, political affiliation or any other qualities by which we may define ourselves. We commit to bringing out the best in ourselves, uncovering our hidden talents, and celebrating differences in our day-to-day interactions. These beliefs are essential as we serve our members who help fulfill the dream of home and property ownership in America.”
3. Be open to self-examination. For insights into how your mind perceives and responds to differences, check out the fascinating, no-cost workshop from NAR, “Bias Override: Overcoming Barriers to Fair Housing.” This 50-minute video program was developed in partnership with the Perception Institute, an organization that worked with other professionals, including judges and teachers, to overcome implicit bias. Watch the video, and use the online tool to test your own implicit biases.
4. Adopt the Equal Professional Service Model(link is external) for your practice. Developed by NAR, the model has four key steps that should be applied consistently in interactions with buyers:
   
   • Do I use systematic procedures?
   • Do I have objective information?
   • Has my customer set the limits?
   • Have I offered a variety of choices?
    
5. Earn NAR’s At Home With Diversity® certification. This day-long, interactive workshop—recently retooled—offers a wide range of insights and exercises to help you not only provide equal service but also transcend racial and cultural differences. Bonus: The program is available for continuing education credit in many states and counts as an elective credit toward several NAR designations.

For more resources—including information on diversity and inclusion grants available to local and state REALTOR® associations—visit nar.realtor/diversity.

©National Association of REALTORS®
Reprinted with permission

Not only do social distancing, masks, and good hygiene during showings keep you and your clients safer, these steps help you manage legal risks.

Not only do social distancing, masks, and good hygiene during showings keep you and your clients safer, these steps help you manage legal risks. Sellers were more likely than buyers to sue their broker or agent if they or a family member became infected with the coronavirus soon after a home showing, according to a May survey of 1,040 buyers and sellers by the Engagious public opinion research firm. Among the findings:

38%

The percentage of buyers who indicated that they would be very likely to sue their broker if they became sick with COVID-19 after learning that a resident of the home they had visited had contracted the disease.

48%

The percentage of sellers who indicated that they would be very likely to sue their broker if one of their visitors contracted the coronavirus soon after a showing.

29%

The percentage of ­buyers who indicated that they would still consider suing, even if they had signed a release holding their real estate broker harmless if they or a family member contracted COVID-19.

41%

The percentage of sellers who indicated that they would still consider suing, even with a signed release.

58%

The percentage of buyers who were willing to waive their right to sue the seller or their agent for COVID-19–related claims.

©National Association of REALTORS®
Reprinted with permission

Fair housing lawsuits are one tool for addressing illegal discrimination in the real estate and mortgage credit industries.

Fair housing lawsuits are one tool for addressing illegal discrimination in the real estate and mortgage credit industries, though the bar is high for determining liability. Cases alleging discrimination in lending practices were highlighted in NAR’s 2019 Legal Pulse report. Here’s a summary of three notable cases:

1. The city of Miami Gardens, Fla., sued mortgage lender Wells Fargo alleging that it had engaged in discriminatory or predatory lending in violation of the Fair Housing Act between 2004 and 2008, citing its use of redlining and reverse redlining tactics. The city asserted that Wells Fargo denied credit to particular neighborhoods based on race (redlining) and of “flooding a minority community with exploitative loan products” (reverse redlining).

Result: Miami Gardens was unable to prove that it suffered an injury as a result of alleged redlining and reverse redlining by Wells Fargo. The court determined that “the undisputed evidence confirmed that none of the 153 loans originated by Wells Fargo [within the limitation period] foreclosed.” Thus, the city could not have suffered an injury as a result of any of these loans.

2. The U.S. Department of Justice filed a civil complaint against First Merchants Bank alleging violations of the Fair Housing Act and the Equal Credit Opportunity Act committed between 2011 and 2017. The suit alleged that the bank engaged in unlawful redlining by not providing mortgage credit services to majority Black areas in Marion County, Ind. The complaint further alleged that the bank failed to have any branch locations in majority Black areas, refused to market in majority Black counties, and had a disproportionately low number of loan applications and loan originations from majority Black neighborhoods.

Result: The parties filed a settlement agreement. In it, the bank denied the allegations but agreed to take all actions necessary to ensure that it offers and provides all persons with an equal opportunity to apply for and obtain credit, retains an independent third-party consultant to assess its fair lending risk management program, maintains a fair lending monitoring program, and provides training to all employees.

3. Prince George’s County and Montgomery County, Md., filed suit against Wells Fargo for alleged predatory and discriminatory residential mortgage lending, servicing, and foreclosure practices in violation of the Fair Housing Act. In the complaint, the counties alleged five categories of injuries: foreclosure processing costs; the increased cost of municipal services; economic injuries to the counties’ tax bases; lost municipal income; and non-economic injuries.

Result: The court held that the counties sufficiently pleaded claims associated with foreclosure processing costs but found the alleged non-economic injuries were too far removed from the alleged discriminatory conduct to have been plausibly caused by Wells Fargo.

©National Association of REALTORS®
Reprinted with permission