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Nothing you can do. Keep your mouth shut.
Associate 1- the fact they’re quarantining in the home could adversely affect the transaction or the client’s best interest if it were to be disclosed. That is entirely privileged.
A. Our first duty is to the law. B. The law says our next duty is to keep information shared with us by our clients confidential. C. The law also provides an exception to that cardinal rule if keeping that confidentiality may result in harm or danger to our clients or others. D. COVID, under certain circumstances, is, not only dangerous and harmful but also fatal. E. If you’re not an epidemiologist, then you can’t reasonably opine on catching COVID from surfaces. F. You don’t know whether the future occupants would have underlying conditions that would create a COVID danger or trigger some kind of anxiety episode. G. Therefore, disclosure would not, IMO, violate our RPC.
I wouldn’t do or say anything. If they break quarantine, that’s a different story. If there will be a week between them being in the house and anyone else being there, risk of transmission is incredibly low, as I understand it.
Rule 1.6 allows disclosure of information related to representation of a client if the lawyer reasonably believes that doing so is necessary “to prevent reasonably certain death or substantial bodily harm.” Unless you reasonably believe that moving into the home is “reasonably certain” to cause the party assuming possession to die or sustain “substantial bodily harm,” I think you should not say anything to opposing counsel.
Warn your clients of the risks of non-disclosure in your jurisdiction, in writing, and then abide by their instructions. Terminate your engagement in writing. If the failure to disclose is a crime in your jurisdiction, make sure they know that your communications on the issue are not privileged.
Agree with Attorney 1 and do not think the question of disclosure is even close.
The new owners should assume the home needs sanitized and air purified since there were other people in it. I doubt your State has a provision that would require disclosure since there isn’t a crime being committed or about to be committed (unless their actions somehow violate a health ordinance). You need to consult your own rules, though. Also, consult the settlement agreement to see if this is specifically addressed. COVID matters also would likely come under HIPAA rules as well. So, before you would disclose (which I am not advocating you should) you should consult the HIPAA rules as well. The consequences of a HIPAA violation can be severe - very severe.
Pro
While I think all of us automatically think of it when it comes to disclosing medical information , HIPAA isn’t likely to apply. HIPAA really only applies in limited circumstances - primarily to those sending protracted health information in connection with Medicare/Medicaid buildings. I mean, sure, double check that because I’m a real estate lawyer who knows a little about HIPAA because of the nature of the assets I used to work on; but it shouldn’t be an issue.
Why would you want or feel you need to disclose that?
My first thought would be to check your settlement/release. Do the terms of the relinquishment create any duty to disclose? Do the terms of the release allow for future liability toward your client based on a condition of the house?