Of course, when I last wrote the Legal Hotline Hot Topics for our May 2020 magazine, I was hopeful that we would have moved past dealing with the repercussions on the real estate industry caused by COVID-19. Alas, that is not the case and the majority of questions on the hotline continue to be related to the pandemic and how REALTORS® can operate their businesses during this time. The hotline numbers certainly show that REALTORS® are resilient, creative and anxious to get back to work.

Anneliese Fierstos
Illinois REALTORS® Legal Hotline Attorney

As Illinois REALTORS® work to regain footing in the industry, I encourage everyone to avoid complacency in order to assist in all efforts to contain the spread of COVID-19. It is only through the collective efforts of both citizens and businesses that we can continue to slow the spread of the virus and eventually and take the time and effort to educate themselves on how to reopen their businesses while adhering to the advice of the CDC as well as other guidelines. Please visit Illinois REALTORS® web page for guidelines on reopening and consider how to incorporate safety guidelines including social distancing (and consider allowing as many staff as possible to continue working remotely).

1. May REALTORS® hold open houses during the most recent phase of the reopening in Illinois?

Yes. During Phase 4 of reopening, REALTORS® are permitted to hold open houses. If you choose to hold an open house, you must comply with specific guidelines which include social distancing where possible, limiting occupancy in the property during the open house and requiring that masks be worn, encouraging the use of booties and gloves, and employing proper sanitation methods. Occupancy limitations must be 50 or less people.  However, at a showing or open house that number is likely too high to allow for the recommended social distancing of 6 feet apart. Therefore, consider limiting the numbers allowed in property to a number reasonable enough to allow for appropriate social distancing.

However, note that remote and virtual showings are still encouraged because statistics have demonstrated that staying in place and isolation have made a significant impact on reducing the spread of the virus.

There are a number of valuable resources available which may assist in making business decisions related to open houses. Both Illinois REALTORS® and the Illinois Department of Financial and Professional Regulation (IDPFR) issued guidance documents for the real estate industry which includes specific guidelines for open houses.

• Info from Illinois REALTORS® on COVID-19
• Illinois REALTORS® Consideration for Offices in Phase 4

2. What is the latest news on showings in general, and then, specifically tenant occupied showings?

Real estate licensees may conduct individual or group showings of unoccupied or vacant properties.  For showings, physical distancing and the use of face coverings are both required. The use of disposable gloves and foot booties are encouraged and proper sanitation methods should be employed following showings.

Real estate licensees must comply with all Executive Order requirements, including limiting gatherings to no more than fifty (50) persons per space or building, or fifty percent capacity, whichever is less.

Individual and group showings are permitted for owner-occupied properties but with a few more requirements and again, remote or virtual showings are encouraged. For all owner-occupied properties, in order to conduct individual or group showings, showings should be scheduled in advance and the real estate brokerage professional must receive written consent from the owner of that property. In all instances, the real estate licensee should comply with all social distancing and now familiar PPE requirements.

Finally, individual or group showings can take place for occupied rental properties when the tenant has consented to the showing. For all occupied rental properties, in order to conduct individual or group showings, showings should be scheduled in advance and the tenant should receive appropriate notice given in a manner consistent with the lease, and/or local ordinance or statute. Owners and tenants are encouraged to work together on an amicable solution for both parties and remote or virtual showings are encouraged.

3.What is the status of the law in Illinois on evicting a tenant who has not paid rent and is the law in Illinois consistent with guidelines on evictions for federally funded housing?

The moratorium on evictions in Illinois has been extended until July 31, 2020.

However, an eviction action may be commenced if the tenant poses a direct threat to the health and safety of other tenants, an immediate and severe risk to property, or a violation of any applicable building code, health ordinance, or similar regulation.

A housing provider should consult an attorney for assistance in evaluating whether a tenant has acted in any way that would allow for an eviction under the exceptions to the moratorium.

Although a landlord is prohibited from evicting a tenant until July 31, 2020, the Executive Order does not relieve the tenant from any obligation under their lease or rental agreement, including amounts owed for rent or any other obligation they might have pursuant to their lease or rental agreement.

The dates to initiate evictions proceeding are different for properties with federal assistance or federally related financing.  On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (P.L. 116-136) was passed prohibiting landlords of rental properties with federal assistance or federally related financing from initiating eviction proceedings against their tenants for 120 days from the enactment of the CARES Act or through July 25, 2020.

The CARES Act, also requires that landlords serve a 30-day notice of termination of tenancy to the tenant after the expiration of the 120 day period on July 25, 2020, meaning that evictions for rental properties with federal assistance or federally related financing cannot be filed until August 24, 2020 at the very earliest. Additionally, some federal assistance programs and federally-backed mortgages have extended their moratoriums on foreclosures and evictions until August 31, 2020.

Due to anticipated changes in Supreme Court Rules addressing eviction proceedings, housing providers should consult with their attorney before initiating any eviction proceedings to make certain that they are relying upon the appropriate eviction deadline and that the complaint filed in court seeking an eviction order is accompanied by the required documentation and that specific notice requirements are followed.

4. Procuring cause questions have seen a rise on the legal hotline. This is likely due to the fact that the pandemic interrupted the development of a lot of relationships cause gaps between first contact of licensees and potential client. As a result, many buyers who did not have exclusive buyer brokerage agreements in place, chose to make independent contact with a seller’s agent during the stay in place order and while the interest rates were low.

A recurring question has been, “I showed a property to a buyer prior to the pandemic, and I have since learned that they have made an offer on the property on their own. Am I entitled to commission as the procuring cause of that sale?”

Procuring cause is an issue that cannot be clearly answered by the Legal Hotline attorney. That is because there is no black and white rule with respect to determining the procuring cause.

According to the National Association of REALTORS® (NAR) “Code of Ethics and Arbitration Manual,” the definition of procuring cause goes something like this: The procuring cause will be the agent who originated the chain of events, without abandonment (agent leaving client) or estrangement (client leaving agent), that leads to the successful sale with that buyer.

If a procuring cause issue is presented to an arbitration hearing panel, the panel will need to consider all the facts and circumstances presented by both sides of the argument and determine who best fits within the definition of procuring cause. NAR published a 17-question “Arbitration Worksheet” that lists pertinent questions for the panel to ask in a hearing. The worksheet features some columns to help guide the decision makers as they consider the facts and the answers to the questions. If you do have a potential procuring cause issue, it is a good idea to take a look at the checklist and educate yourself on the issues that would be deemed relevant by an arbitration panel and assess whether initiating an arbitration case is a good business decision for you and your company. Keep in mind. Your company will need to support you in any proceeding as it is the company that is really important.