COVID-19 Addendum

To: GRAR Broker Members Some members have asked whether they should have their clients sign one of the pre-printed COVID-19 Addenda. GRAR Leadership sought the guidance of the GRAR attorney, John Anderson of Harter Secrest & Emery. John provided the following thoughts on this matter. Please be sure to read the Note at the bottom, as well.

Existing Deals With Contracts In Place

For transactions where a contract has already been signed by the parties and approved by their attorneys, agents should NOT ask their clients to sign any COVID-19 Addendum which has not been approved, in advance, by the attorney who is representing their client.  The COVID-19 outbreak and its ramifications might significantly impact an existing deal, the ability of the parties to perform their respective obligations, and the remedies available to the parties for failure to meet any such obligations. Accordingly, if an agent seeks to have its client sign a form COVID-19 Addendum which has not been prepared and/or approved, in advance, by their client’s attorney, the agent could very well be found engaging in the unauthorized practice of law. Any such amendment to an existing contract involves the consideration of significant legal considerations and ramifications and should be drafted by the client’s attorney and that attorney should have the opportunity to explain all of the ramifications of any such amendment to the client prior to signature. Additionally, even if such a form COVID-19 Addendum contains language advising the client to consult with its attorney before signing, such a disclaimer will likely not protect an agent from a claim of unauthorized practice of law.

New Deals

For any new deals, subject to the considerations below, an agent may use a fill-in-the-blank COVID-19 Addendum that hasn’t been approved by GRAR/MCBA as an addendum to the GRAR/MCBA approved form purchase contract if, and only if, the COVID-19 Addendum includes language stating that it is expressly subject to, and contingent upon, the approval by each party’s attorney.   The following additional considerations should also be considered by the agent. First, given the unique nature of the COVID-19 outbreak, and its ramifications, it would be prudent for the Agent to discuss with the client whether the client’s attorney should be consulted before signing the contract (and addendum). Second, the agent should consider whether a COVID-19 Addendum is truly needed and whether using the existing GRAR/MCBA approved form contract and filling in the blanks to include longer periods for performance is adequate. Third, if GRAR/MCBA ever approves a form COVID-19 Addendum, the agent should use that approved form - - however, at the present time no such approved form exists. Fourth, since many of the COVID-19 Addenda that I have reviewed are quite complicated, an agent should review any fill-in-the blank form first to make sure that they understand its terms before asking their client to sign it - - this is certainly not a “one size fits all” circumstance.

Important Note: John Anderson and Harter Secrest & Emery represent the Greater Rochester Association of Realtors, Inc. The information provided here on this matter should not be interpreted as Harter Secrest and Emery seeking to provide legal advice to, or undertaking to represent, any GRAR/UNYREIS members. If you have questions on this topic, John Anderson recommends that you consult with, and rely upon advice fr om, your attorney.

Greater Rochester Association of REALTORS® | grar.org