The U.S. Department of Homeland Security issued guidance to identify essential industries to critical infrastructure.

The U.S. Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency released an advisory list on which industries are “essential to critical infrastructure,” which deems the essential real estate industry essential. The advisory comes at a time when the industry itself is split over how essential real estate services are and states are making decisions on a local level.

“This list is intended to help State, local, tribal and territorial officials as they work to protect their communities while ensuring continuing of functions critical to public health and safety, as well as economic and national security.”

On page 13 of the 15-page list, the agency writes that “residential and commercial real estate services, including settlement services” are essential. It also lists staff at government offices who perform title search, notary and recording services in support of mortgage and real estate services and transactions as essential.

California and Washington are two of the latest in a string of dozens of states to deem the real estate industry an essential service at a time when states across the country are issuing stay-at-home orders banning work deemed “nonessential” to slow the spread of COVID-19.

“There are thousands of real estate and mortgage transactions currently pending in Washington State,” Washington Governor Jay Inslee wrote Friday in a memo. “Most transactions are for residential properties, with people already in transition out of/into new residences.”

“Significant legal liability and displacement (if not homelessness), could occur if these transactions do not close,” Inslee added. “Pending/under contract sales should be allowed to close, using remote/electronic means whenever possible, and following social distancing guidelines if remote/electronic closing cannot occur. For homeowners in distress related to the COVID-19 event, it is important that they have the option to sell their home or pursue a refinance or residential mortgage loan modification.”

The Federal advisory can now help other states make the decision, although the advisory was clear to note that it shouldn’t be considered a directive or standard. Dozens of states have issued stay-at-home orders and in almost all of them, real estate has been deemed an essential business, although many have limitations like banning open houses or encouraging remote work or digital transaction tools where applicable.

Utah, Louisiana, Pennsylvania, New York, Michigan and Vermont are all states that did not include real estate in their list of essential industries to stay open during the stay-at-home order, according to information compiled by real estate brokerage Redfin. 

Email Patrick Kearns

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