April 28, 2020 at 6:18 am
Real Estate as an Essential Business – DECD Guidance and City of Portland Restrictions on Real Estate Activities
On April 15, 2020 the Maine Department of Economic and Community Development (DECD) released new guidance related to the operations of real estate as an essential business during the COVID-19 pandemic. DECD has considered real estate to be an essential business since the Governor’s announcement of a stay-at-home order limiting business activities, but had provided no guidance or clarity around what real estate activities were permissible or how they might be conducted in light of social distancing requirements. The guidance released on Wednesday speaks substantially to residential real estate, but it is vague on commercial real estate.
Additionally, on April 14, 2020, the Portland City Council voted to extend its own stay-at-home order and modify it to include a prohibition on real estate activities for certain multi-unit residential properties. Portland also issued further guidance for construction activities in the City.
Below is an overview of the DECD guidance as well as the City of Portland’s new restrictions on real estate and construction activities.
DECD Guidance on Real Estate as an Essential Business
The DECD guidance includes new restrictions and requirements for buyers and sellers of real estate, including commercial multi-unit properties of more than four units and all residential real estate. The guidance does not address buying and selling activities for other types of commercial real estate properties. Regardless, we recommend that transaction activities for those properties be conducted using social distancing guidelines and in-person contact should be limited to the maximum extent possible. The DECD guidance can be viewed here.
Per the state executive order, for real estate activities involving commercial multi-unit properties of more than four units, the following requirements are imposed:
- Showings must be conducted virtually by the listing agent.
- The listing agent must wear a cloth face covering, foot coverings, and gloves when entering a property.
- Inspections must be completed by the building inspector only. Building inspectors must wear a cloth face covering, foot coverings, and gloves when entering a property.
For all residential real estate activities, the following requirements are imposed:
- Agents and buyers must narrow down houses to “a few” to view.
- An agent must “live stream” the viewing to the potential buyer from the property-the potential buyer may not be present. The agent must wear a cloth face covering and foot coverings (not gloves?) when entering a property.
- A potential buyer may select one house for a walk through, with the approval of the seller. Both the potential buyer and the agent must wear cloth face coverings, foot coverings, and gloves during the walk-through.
- The purchase and sale agreement must be executed electronically.
- Inspections must be completed by the building inspector only. Building inspectors must wear a cloth face covering, foot coverings, and gloves when entering properties.
- Appraisers must use all efforts to avoid entering a property. If it is necessary to enter, the appraiser must wear a cloth face covering, foot coverings, and gloves.
- Closing must take place using as many social distancing practices as possible.
City of Portland Extended Stay-at-Home Order and Further Restrictions on Real Estate Activities, Construction
In addition to the requirements contained in the DECD guidance, the Portland City Council voted on April 14, 2020 to extend its own stay-at-home order. In doing so, the city decreed that real estate agency activities shall not be allowed with regard to any occupied residential multifamily properties of more than four units, or with regard to an occupied residential multifamily property of four units or fewer in which the property owner is not a resident. The city’s order notes that all other real estate activities must comply with the DECD guidance outlined above.
The City also issued guidance on construction activities, which provides that only those construction activities and/or projects which were approved by the City on or before March 25, 2020 may continue their activities. Additionally, all persons on those projects must remain six feet apart on the construction site, to the maximum extent possible.
A copy of the April 14 City Council order is here.
Categories: Maine Real Estate Insider