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Colorado Real Estate Brokers: Protect Yourself (And Your Clients) From COVID-19 Risk

Updated November 24, 2020

On November 20, 2020, Colorado promulgated Public Health Order 20-36: COVID-19 DIAL that outlines how to implement the COVID-19 Dial and will be effective for the next 30 days, unless extended. This dial allows for local communities to determine the severity of COVID-19 spread and operate accordingly. The Dial classifies communities as green, blue, yellow, orange, red, or purple. Each level has its own restrictions:

  • Green Level, “Protect Our Neighbors,” allows businesses to operate at 50% of their pre-pandemic capacity. Critical businesses may continue to operate without capacity limits, except for critical retail, which must adhere to the 50% capacity limit. Indoor restaurants and bars may operate.
  • Blue Level, “Cautious,” allows the majority of businesses to operate at 50% capacity. However, public and private gatherings are limited to not more than 25 individuals (which has since been limited to no more than 10 individuals effective October 23, 2020). Restaurants are still allowed to operate at 50% capacity or 175 people (excluding staff), whichever is less. Gym and recreations centers may still be open at 25% capacity or 75 people, whichever is less.
  • Yellow Level, “Concern,” allows businesses to operate largely like the Blue level, however indoor restaurants must drop capacity.
  • Orange Level, “High Risk,” allows non-critical office based businesses to continue operating at 25% of their capacity limit but are encouraged to move to remote work. Other businesses and services must also restrict their capacities.
  • Red Level, “Severe Risk,” strongly encourages businesses to conduct work remotely. Restaurants are closed for in-person indoor dining but may offer curbside, takeout and delivery services. Indoor events are closed.
  • Purple Level, “Extreme Risk,” vast majority of businesses are closed for in-person activities, but Critical Businesses may continue to operate.

Currently, the relevant portions of the Order that outlines Real Estate operations state that real estate services constitute a critical business.

  • At the Green, Blue, Yellow and Orange Levels, real estate open houses must follow the Indoor Event requirements, including capacity limits.
  • At the Red Level, individual real estate showings are authorized and open houses may operate with only one household at a time.
  • At the Purple Level, real estate open houses are closed.

While the Order may allow for open houses (depending on the color of the dial), it is best to consult with the owner(s) of the house to ensure they are comfortable with the process. Regardless of the color level, real estate open houses must also comply with other specific mandates set out in the Order.

Importantly, local counties or municipalities are not restricted from adopting more protective standards than those contained in the Order. Whether or not a brokerage firm must abide by stricter protocols or a real estate broker is permitted to conduct specific activities is dependent on the applicable county or municipality’s specific governmental directive.

Please contact me if you have any questions with respect to the COVID-19 Dial or any specific county or municipality directive. As brokers and property managers navigate this ever-evolving COVID-19 reality, they should consider implementing COVID-19-specific contractual provisions and obtaining waivers and releases to protect themselves, their businesses, and their clients.

 A.  Real Estate Broker and Property Manager Risk Reduction

I’ve seen several COVID-19 risk reduction tools circulating in the marketplace, including MLS COVID-19-related warnings, COVID-19 front door notices, and ‘COVID-19 symptom-free’ certifications. While all of those options are better than ‘business as usual,’ a simple disclosure and release is the benchmark when it comes to protecting broker, business, and clients.

Our firm has developed a COVID-19 Disclosure and Release Agreement bundle for real estate brokers to use in every situation regardless of whether the broker represents a seller or buyer. Additionally, our firm has developed a COVID-19 Disclosure and Release Agreement bundle for property managers to use with respect to owners, current tenants, prospective tenants, and vendors.

B.  Contract to Buy/Sell and Listing Contract Provisions

Once proper disclosures are in place, real estate brokers should consider protecting their clients’ interests by implementing COVID-19-specific contract clauses. Our firm has also developed COVID-19-specific provisions for the Contract to Buy/Sell and Listing Contracts that cover situations like preliminary buyer inspections, COVID-19-related Contract termination, COVID-19-related dates and deadlines extensions, and temporary suspension of brokerage services.

If you are interested in one or more of these clauses or products please send me an inquiry with a brief description of your needs. It goes without saying that this is an uncertain time that is rapidly developing on a daily basis. If you do purchase a COVID-19-related product or clause, please contact me intermittently to ensure your version is up-to-date.

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