A number of Realtors in the Virginia area have been concerned recently about the necessity of adding “hold harmless” language to their agreements when brokering the selling or buying of a home. Since we know this is a cause of real concern for our friends in the real estate industry, we wanted to take a moment and give the legal perspective.
Legal Questions: Do You need To Add “Hold Harmless” Language to Brokerage Agreements Amid Covid-19?
WHY WOULD YOU NEED TO ADD THIS LANGUAGE IN THE FIRST PLACE?
A “hold harmless” clause is essentially a clause added to an agreement specifying that the agent, broker, firm or anyone connected to the agency would not be held liable if a particular set of circumstances were to arise, typically a set of circumstances that may be harmful or negatively impactful to the occupant(s) of a house being bought or sold.
Why has this presently come into question?
With the advent of COVID-19 it has become clear that some Realtors, agents, brokers and others in the real estate industry are concerned about the potential of a person who purchases a home getting Covid and linking it back to the purchase of the home or to the home in some way. It has also concerned Realtors in setting up showings and trying to ensure optimal levels of sanitation in the home, who are worried about the possibility of a person or people coming into contact with the virus from someone else attending a showing or a potentially unsanitized surface.
DO REALTORS NEED TO ADD “HOLD HARMLESS” LANGUAGE TO THEIR BROKERAGE AGREEMENTS?
They do not, in fact. The likelihood of an infection occurring due to any of the aforementioned circumstances actually happening is incredibly low. That being said, Virginia Realtors, the organization that advocates for Realtors and others affiliated with real estate in the state of Virginia, has released statements that Realtors may use if they would prefer to do so.
This is the statement that may be added to the Additional Terms sections of brokerage agreements:
“In no event shall Broker, brokerage firm, or any agents or employees of the brokerage firm, be responsible for or liable for any claims arising out of the COVID-19 Pandemic; entry into the property by Invited Parties, any person(s) accompanying an Invited Party, or any agent or third party entering the property on an Invited Party’s behalf; or the availability of the property for showing or inspection. Client understands the risks associated with entering properties and/or allowing others to enter their property during the COVID-19 Pandemic. Client releases, waives, discharges, and forever holds Broker, the brokerage firm, and its agents and employees, individually and collectively, harmless from and against claims, damages, losses, and suits arising from or in any way connected with the Pandemic. Invited Parties includes, but Is not limited to, potential buyers or tenants, agents, inspectors, contractors, appraisers, or other third-parties related to a real estate transaction.”
And this is the language to be used if conducting some kind of activity in the home, such as a showing:
“In no event shall Broker, brokerage firm, or any agents or employees of the brokerage firm, be responsible for or liable for any claims arising out of the COVID-19 Pandemic; entry into the property by Invited Parties, any person(s) accompanying an Invited Party, or any agent or third party entering the property on an Invited Party’s behalf; or the availability of the property for showing or inspection. Tenant understands the risks associated with entering properties and/or allowing others to enter their property during the COVID-19 Pandemic. Tenant releases, waives, discharges, and forever holds Broker, the brokerage firm, and its agents and employees, individually and collectively, harmless from and against claims, damages, losses, and suits arising from or in any way connected with the Pandemic. Invited Parties includes, but Is not limited to, potential buyers or tenants, agents, inspectors, contractors, appraisers, or other third-parties related to a real estate transaction.”
If you have any further questions concerning this issue or any other aspect of real estate law, please contact TATE BYWATER, to discuss. We are always happy, as your local law firm, to advise and give consultations in matters where the law may appear unclear, especially in cases such as this recent disruption. We strive to make ourselves available as members of the community as well as trusted servants of the law, and we always look forward to working with you.