COVID-19:
Consumer Information

Buying or selling real estate during COVID-19 raises a number of questions. Below, RECO, with input and insights from real estate professionals, finance experts and real estate lawyers, provides answers to a round-up of frequently asked questions from buyers and sellers navigating the real estate market during these unprecedented times.


Advertising/Marketing/Solicitation
Brokerage Offices
Contracts/Documents/Clauses
Deposits/Closing Trades
Finance/Lenders
Financial Elements of a Trade
Listings
Marketplace
Open Houses
Properties with Tenants
Showings


Advertising/Marketing/Solicitation

While not banned, door knocking in today’s environment is not a responsible practice. Respect for physical distancing should be a very high priority for everyone within real estate and beyond.

Salespersons are encouraged to limit all physical interactions to help fight the spread and decrease the risk of community transmission. Should you be approached in an inappropriate manner and want to file a complaint, you may do so online here.

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Brokerage Offices

Yes. The Government of Ontario has included real estate services on its essential workplaces list. As such, brokerage offices may remain open, with staff working onsite. However, brokerages and their employees must follow the health authority guidelines, including physical distancing and regular handwashing.

It is best to check websites or to call any brokerages in advance of a visit as some have closed their brick and mortar locations, opting for providing services remotely during the provincial state of emergency.

Contracts/Documents/Clauses

Yes. Electronic signatures or e-signatures have been permitted in real estate transactions since July 2015 (Electronic Commerce Act, S.O.2000). Documents signed electronically and those signed with a pen are equally binding.

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They can be delivered in such a way to maintain physical distance. But if you want someone else to deliver the documents, using a courier service is recommended, because you can track the delivery. However, you should research banking, signing, and sharing documents electronically.

This can be a tricky area. The circumstances of the pandemic may not be sufficient grounds to walk away from an existing agreement to buy or sell the home for which all conditions have been fulfilled or waived. Ultimately, you should consult your real estate lawyer about conditions and other relevant clauses in your specific agreement.

If you have an agreement in place and all conditions have been waived, you will likely need to work with your salesperson, lawyer, lender and the seller to see if an alternative solution can be reached between the parties. Walking away under the impression that all you have to lose is your deposit is very risky, and not recommended. The seller could sue you, courts could rule against you, and you could be forced to pay the seller for their losses.

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No. The pandemic does not change the fact that a purchase agreement is legally binding. If you have an agreement in place and all conditions have been waived, you will likely need to work with your salesperson, lawyer, lender and the seller to see if an alternative solution can be reached between the parties. Walking away under the impression that all you have to lose is your deposit is very risky, and not recommended. The seller could sue you, courts could rule against you, and you could be forced to pay the seller for their losses.

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Yes. You are within your right to request professional cleaning and sanitizing of a property prior to you taking possession, but the seller might not agree. This is something that would need to be negotiated between you and the seller, and included within the final agreement of purchase and sale (APS) as a condition of the sale, along with who is responsible to pay for the cleaning.

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No. The pandemic does not change the fact that a purchase agreement is legally binding. If you have an agreement in place and all conditions have been waived you should work with your salesperson, lawyer and lender to find a way to make it work. Walking away under the impression that all you have to lose is your deposit is very risky, and not recommended. The seller could sue you, courts could rule in their favour, and you could be forced to pay for any losses to the seller.

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As of August 12, 2020, the Ontario government has lifted the prohibition on open houses for all regions in Ontario, with public health and workplace safety measures and restrictions in place.

Health authorities establish restrictions for size of gatherings and physical distancing measures. Refer to current direction from the health authorities, including chief medical officer and public health and local government officials for guidance. Buyers and sellers (or their representatives) should discuss established protocols for property visits prior to visiting a property. Keep in mind, protocols may vary property to property depending on the needs and requests of the seller.

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We have seen the introduction of a variety of new clauses and liability waivers intended to address such considerations as illness and virus transmission, transaction delays and interruptions in auxiliary business services that consumers rely upon to complete property transactions. It is important to be aware that poorly drafted waivers and clauses in an agreement can create unnecessary confusion and have the potential to create disputes that can result in additional costs for all parties. In a worst-case scenario, poorly drafted agreements can jeopardize the success of a transaction or can lead to avoidable litigation.

Whether you are considering including one or more COVID-19 related clauses in an offer, or are presented with a contract that includes one, RECO recommends that you review the document thoroughly with your real estate salesperson and real estate lawyer before agreeing to including such clauses or waivers in any contract, document or agreement of purchase and sale. The clauses have to make sense for not only the risks presented by the pandemic, but also to your specific circumstances.

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Proceed with caution. If you have an agreement in place and all conditions have been waived, you will likely need to work with your salesperson, lawyer, lender and the seller to see if an alternative solution can be reached between parties.

It is important that you, and all buyers, understand that “walking away” from a deal could result in the seller taking legal action against you. For example, were a buyer to withdraw from an agreement, and the seller were to later sell the property for less than the amount agreed upon in the abandoned agreement, a court could order that the original buyer not only lose their initial deposit, but also pay the difference between their agreed upon purchase price and what the property was ultimately sold for, plus additional expenses.

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The answer is, it depends. If the agreement is conditional or a “satisfactory financing clause” was used by the buyer then the buyer has the right to not proceed, assuming that the clause was properly drafted and that they are within the agreed upon timelines. However, if there was no such clause, a contract is a contract and would most likely be enforceable. You should speak with your salesperson and real estate lawyer to review the agreement and discuss contractual provisions relating to proceeding or canceling the sale.

Deposits/Closing Trades

It is outside RECO’s authority to require the return of deposits.

Failed transactions must be resolved through an agreement between the buyer and seller, with support from professionals such as real estate salespersons and lawyers. The distribution of deposits may only occur by agreement between the parties, or by court order.

During this unprecedented situation, we encourage all parties to be flexible and understanding in changing circumstances. Speak with your salesperson to work toward an effective solution.

RECO does not have the authority to enable the extension of closing dates.

The agreement to buy or sell a home is a binding contract between the buyer and the seller over which RECO has no jurisdiction. Any change to the closing date in the agreement can only be made by written amendment signed by the parties to the agreement.

Some brokerages have taken steps to develop and recommend clauses that facilitate COVID-19 related delays. Consumers are strongly advised to seek independent legal advice before including such a clause.

During this unprecedented situation, we encourage all parties to approach such situations with a desire to be flexible and understanding in changing circumstances. By working with your salesperson, you may be able to find alternatives that will satisfy the buyers – remember that this may require amending the agreement, which must be done by agreement of both the buyer and seller.

Land Registry Offices are included on the Government of Ontario’s list of essential workplaces, and these services remain available.

Most brokerages have contact-free options available to you. Speak with your salesperson to arrange to provide your deposits via electronic funds transfer. You might also have to work with your financial institution, to facilitate the transfer.

Finance/Lenders

No, for ethical and legal reasons. Your lender’s approval is subject to many conditions, including verifying income sources, both upon receiving your initial application and through any verifications leading up to the sale closing. By failing to notify your lender, you could be committing mortgage fraud and putting yourself in a financially challenging position.

Contact your lending institution to inform them that your circumstances have changed. If you are still interested in purchasing a property, work with them to explore your borrowing options.

Financial Elements of a Trade

Yes. Electronic funds transfers (commonly referred to as EFTs) reduce the need for in-person contact in the course of real estate trades.

Listings

Individual experiences vary brokerage to brokerage. Fortunately, real estate services providers have well established digital resources to manage virtually every aspect of the transaction. The industry as a whole has long adopted a progressive approach to marketing. This made the pivot to offering more services online and digitally a swift one for many brokerages and their teams.

Consumers entering the market can expect such physical distancing measures as: COVID-19 and vulnerability screenings, limited physical access to properties, new protocols and heightened safety and sanitation measures. Both parties can also anticipate an increased reliance on technology and digital media tools throughout the process. This may include video conferencing with their salesperson, viewing homes through virtual home tours and video walk-throughs, use of electronic documents for contracts and property information, and the use of electronic signatures for finalizing agreements.

RECO provides many helpful resources for anyone buying or selling a home, including information about working with a brokerage and salesperson and helpful brochures for buying or selling a home.

Given the importance for physical distancing and everyone’s need to follow the advice provided by public health officials, RECO recommends asking potential salespersons and brokerages: What procedures they have in place to adhere to and support physical distancing; how they intend to market or present properties, in person and virtually; and what protocols they have instituted for private showing, administrative requirements and in-person interactions, where unavoidable. These are very important questions, the answers to which may be relevant to your buying or selling experience.

Once you have discussed the services available from a brokerage and verified their registration to trade in real estate by using RECO’s Real Estate Professional Search Tool and are confident in the capabilities of your chosen salesperson and brokerage, then, and only then, should you consider signing a buyer representation agreement (BRA) or listing agreement.

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You don’t have to wait, but it will take some time to get it, and the paperwork, ready. Real estate brokerages remain available to work with you to sell your home, since they are on the list of essential workplaces in Ontario. It is important to note, that both buyers and sellers should become familiar with restrictions in place by government officials and changes in services offered by brokerages and salespersons.

Individual experiences vary brokerage by brokerage. Fortunately, real estate services providers have well established digital resources to manage virtually every aspect of the transaction. The industry as a whole has long adopted a progressive approach to marketing. This made the pivot to offering more services online and digitally a swift one for many brokerages and their teams.

Consumers entering the market can expect such physical distancing measures as: COVID-19 and vulnerability screenings, limited physical access to properties, new protocols and heightened safety and sanitation measures. Both parties can also anticipate an increased reliance on technology and digital media tools throughout the process. This may include video conferencing with their salesperson, viewing homes through virtual home tours and video walk-throughs, use of electronic documents for contracts and property information, and the use of electronic signatures for finalizing agreements.

Marketplace

There is no disputing that the real estate market is prone to market volatility, that is to say, sudden changes in property values. Buyers and sellers alike are encouraged to practice due diligence when embarking on the sale or purchase of a property. In addition to doing your own independent research, registered real estate salespersons and brokerages throughout Ontario are a great source for regional and community specific trends and market analysis.

No one has a crystal ball that will tell us exactly where the real estate market is headed, however by working closely with a well vetted brokerage, your lender and doing your own research you will be able to objectively determine what best suits your real estate needs and goals for the near and long term.

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Open Houses

As of August 12, 2020, the Ontario government has lifted the prohibition on open houses for all regions in Ontario, with public health and workplace safety measures and social gathering restrictions in place.

Based on the advice of the Chief Medical Officer of Health and other health experts, legal indoor gathering limits will be determined by levels of community transmission in each region. The legal limit for an open house is 50 people indoors, where physical distancing can be maintained.

Brokers and salespeople must ensure that the total number of individuals attending an open house must be limited to the number where physical distancing of at least two metres is possible, without exceeding 50 people.

Speak with your broker or salesperson regarding safety protocols and what you are comfortable with for open houses and showings, both as a seller or a potential buyer.

What you need to know to stay safe during an open house

Plan Ahead:

    • Stay at home and away from others if you are feeling ill or have symptoms of COVID-19
    • Get tested if you are worried you have or have been in contact with someone who has COVID-19
    • Plan in advance and prepare the personal protective equipment you will need for yourself

During the Open House:

    • Wear a face covering in indoor and outdoor public spaces
    • Maintain physical distancing of at least two meters metres from people outside of your household or social circle

Based on community needs, some municipalities and local medical officers of health have exercised their authority for more restrictions or requirements, such as mandatory face coverings in commercial establishments or all indoor public spaces.

Be sure to check your local public health unit’s or municipality’s website.

In addition, RECO has strongly recommended that brokers and salespersons follow the direction of health officials by limiting showings to situations where they are necessary. This means that you may only have physical access to a property at the final stages of consideration where historically, many buyers would walkthrough a property at the beginning of the consideration process.

Speak with your broker or salesperson regarding property showings, as access may be restricted and, in some cases, not permitted.

Properties with Tenants

Showings should only occur with the tenant’s consent or in accordance with lawful notice provisions contained within the Residential Tenancies Act (RTA) which is enforced by the Landlord and Tenant Board (LTB). RECO has recommended that parties hold off on showings if they do not have the tenant’s consent.

Speak with your salesperson about what you can and may need to do to in the case that there are particular health concerns on the part of the tenant.

Many salespersons and brokerages have established protocols that respect the needs and concerns of tenants that will allow serious buyers to safely view the property. If protocols are not already in place your salesperson may be able to negotiate a plan that will satisfy all parties. If they are unable to agree to terms that will allow a showing, you will need to make a decision on how comfortable you may be regarding finalizing a purchase without a showing.

Eviction orders fall under the Residential Tenancies Act, 2006 (RTA), which is enforced by the Landlord and Tenant Board (LTB). It is outside of RECO’s jurisdiction to comment on RTA issues.

During this unprecedented situation, we encourage all parties to approach such situations with a desire to be flexible and understanding in changing circumstances. We encourage you to speak with your salesperson to find effective solutions. Please contact LTB for further guidance.

Showings

Though buyers may want to see the home in-person before committing, as the homeowner, you ultimately make the decision regarding access to your property. By working with your salesperson, you may be able to find alternative solutions or establish showing protocols that you would be comfortable with. For example, you could reduce the number of in-person showings required by asking that salespersons vet buyers to assess their interest, offer virtual tour options and digital marketing materials. If they remain interested, you could work out a plan to safely show the property.

If a property is tenant-occupied a showing should only occur with the tenant’s consent and having given the tenant notice in compliance with the Residential Tenancies Act.

Real estate brokerage is permitted during the pandemic. Though compliance with direction of health authorities is the responsibility of the health authorities and local by-law enforcement officers, anyone who feels they have experienced or witnessed a violation of the Real Estate and Business Brokers Act, 2002 (REBBA 2002) can file a complaint with RECO. It is not necessary for you to determine that there has been of violation of the law, including the Code of Ethics. RECO reviews each complaint to determine whether RECO has the authority to deal with the matter.

RECO will investigate complaints about salesperson and brokerage breaches of requirements of health authorities, such as open houses.

It is important to note that private in-person showings are permitted and are typically reserved for buyers with a high level of interest in the property. Showing protocols are established by the seller and their salesperson and may vary from property to property.

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Individual experiences vary brokerage by brokerage. Fortunately, real estate services providers have well established digital resources to manage virtually every aspect of the transaction. The industry as a whole has long adopted a progressive approach to marketing. This made the pivot to offering more services online and digitally a swift one for many brokerages and their teams.

Consumers entering the market can expect such physical distancing measures as: COVID-19 and vulnerability screenings, limited physical access to properties, new protocols and heightened safety and sanitation measures. Both parties can also anticipate an increased reliance on technology and digital media tools throughout the process. This may include video conferencing with their salesperson, viewing homes through virtual home tours and video walk-throughs, use of electronic documents for contracts and property information, and the use of electronic signatures for finalizing agreements.

Working with your landlord and/or the property owner to address your concerns is the first step you should take. Share your protocol requests with them and ask they include them in their discussion with their salesperson. In addition, you could also put up signs asking visitors to wear protective coverings for hands and face and reminders not to touch items in the home. You may want to provide personal protective equipment so that you are assured that safety equipment has not been worn elsewhere.

Local by-law enforcement have primary responsibility for investigating and enforcing public health requirements, so if you know of an individual who is violating public health directives, your primary point of contact should be local health authorities (available by dialing 311 in many municipalities).

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Showings should only occur with the tenant’s consent or in accordance with lawful notice provisions contained within the Residential Tenancies Act. Speak with your salesperson about what you can and may need to do to in the case that there are particular health concerns on the part of the tenant.

Many salespersons and brokerages have established protocols that respect the needs and concerns of tenants/owners that will allow serious buyers to safely view the property. If protocols are not already in place your salesperson may be able to negotiate a plan that will satisfy all parties. If they are unable to agree to terms that will allow a showing, you will need to make a decision on how comfortable you may be regarding finalizing a purchase without a showing.

Please take great care to discuss with your seller the importance of considering the health and safety of tenants.

Private showings are permitted. Work with your brokerage to learn what protocols they have in place to comply with requirements and recommendations of health authorities, such as physical distancing. You should consider with your brokerage when and how showings are conducted. Showings should be limited to those properties you have a legitimate interest in buying, after having viewed the property using virtual showings, videos, photos, or the like to assess whether the property likely meets your needs. All parties play a role in minimizing the risk of transmission of the coronavirus.

If you own the property, you decide if or who can have access to the property and when, considering your agreement with the brokerage. As always, safety should be priority number one. Speak with your salesperson or broker if you, or someone in your home is immunocompromised, has recently returned from traveling, or is considered to be at high-risk for transmitting COVID-19. Discuss the circumstances and alternatives with your representative, by working together you can establish and implement measures to help protect everyone involved in your transaction.

Consult public health frequently for the most up to date guidance and recommendations from authorities. If you are renting or leasing the property speak with your landlord or the property owner to discuss your concerns.

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Individual experiences vary brokerage by brokerage. Fortunately, real estate services providers have well established digital resources to manage virtually every aspect of the transaction. The industry as a whole has long adopted a progressive approach to marketing. This made the pivot to offering more services online and digitally a swift one for many brokerages and their teams.

Consumers entering the market can expect such physical distancing measures as: COVID-19 and vulnerability screenings, limited physical access to properties, new protocols and heightened safety and sanitation measures. Both parties can also anticipate an increased reliance on technology and digital media tools throughout the process. This may include video conferencing with their salesperson, viewing homes through virtual home tours and video walk-throughs, use of electronic documents for contracts and property information, and the use of electronic signatures for finalizing agreements.

Established protocols vary by brokerage. Most include increased use of technology and social media to minimize or eliminate the need for in-person interactions. This may include replacing physical open houses with digital ones, using esignature tools to finalize contracts and agreements and establishing rigid protocols and COVID screening procedures for individuals attending private at-property showings. It is important to discuss protocols, service availability and any restrictions in place with a brokerage prior to signing a BRA or listing agreement.

Health authorities establish restrictions for size of gatherings and physical distancing measures. Refer to current direction from the health authorities, including chief medical officer and public health and local government officials for guidance. Buyers and sellers (or their representatives) should discuss established protocols for property visits prior to visiting a property. Keep in mind, protocols may vary property to property depending on the needs and requests of the seller.

Helpful links:

As the Ontario government begins to lift restrictions on nonessential businesses, coordinating such services are expected to become easier.

Many service providers are offering contactless services meant to significantly decrease, if not eliminate, in-person contact. When scheduling an in-home service, it is important to establish agreed upon protocols with the service provider.

Continue to follow the direction, advice and guidance of public health officials regarding physical distancing and mitigating risk to exposure or transmission of the COVID-19 virus.

Public health has released guidance on cleaning and disinfecting of public settings that you may find to be a helpful reference as disinfecting your space should be considered following any service visits.

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Though buyers may want to see the home in-person before committing, as the homeowner, you ultimately make the decision regarding access to your property. By working with your salesperson, you may be able to find alternative solutions or establish showing protocols that you would be comfortable with. For example, you could reduce the number of in-person showings required by asking that salespersons vet buyers to assess their interest, offer virtual tour options and digital marketing materials. If they remain interested, you could work out a plan to safely show the property.

If a property is tenant-occupied a showing should only occur with the tenant’s consent and having given the tenant notice in compliance with the Residential Tenancies Act.