New Covid-19 community case: What it means for the real estate industry

The re-appearance of Covid-19 in the Auckland community will have an impact on the real estate sector.

The hard lockdown ordered by the Prime Minister will put on hold physical attendance at open homes and in-person auctions for the near future, with many agencies now moving to remote viewings and carrying out auctions online.

Auckland and the Coromandel will be under under alert level four restrictions for seven days from 11.59pn tonight while the rest of New Zealand will be under alert level four for three days.

REINZ CEO Jen Baird said that only essential services were exempt from Alert Level 4 restrictions.

"Real estate and property management are not listed as essential services. Agents, property managers and staff must work from home, but remote work such over the phone, email, and other electronic means can be carried out including remote appraisals or listings, electronic sales and purchase agreements, and online or phones auctions," she said.

“We recommend vendors, agents, landlords and tenants communicate about what work can be done remotely through lockdown."

OneRoof has detailed below what Kiwis can and can't do under the different alert levels.

At alert level four:

1. Auctions: No physical auctions. All auctions need to be conducted online or via phone bidding.

2. Open homes and inspections: Open homes and private viewings are prohibited.

3. Pre-settlement inspections: These cannot take place.

4. Moving house: During alert level 4, buyers cannot move into new properties and sellers cannot move out of their properties.

5. Appraisals and listings: Appraisals must be carried out remotely. Discussions regarding the agency agreement, marketing and listing process must occur via telephone/ virtual methods only, not in person. Photography and videography to be carried out remotely.

6. Mailbox drops: Agents should not use letterbox drops to market a property for sale.

7. Settlement: It may be possible for settlement to go ahead if it doesn’t involve people moving, but it is recommended that both parties agree to delay settlement until alert level 3. If there is a clause in your sale and purchase agreement that addresses how settlement should occur if the alert level changes, talk to your lawyer or conveyancer and your agent about the best approach for your transaction.

The REA recommends that settlements are deferred for at least 10 days after alert level 3 begins. Be aware that if all settlements are deferred for the default 10 days, it may be difficult to find a moving company to help the settlement process. Consider choosing a longer period.

Be aware that a buyer’s situation may be uncertain during alert level four. If the buyer’s purchase was conditional on selling their own house, they might not be able to settle on their own transaction if they can’t physically move out of their house. Be considerate of the circumstances and needs of the buyer.

Land Information New Zealand (LINZ), most banks and many lawyers, conveyancers and real estate agents will be working remotely, and this may cause delays.

At alert level 3:

1. Auctions: No physical auctions. All auctions need to be conducted online or via phone bidding.

2. Open homes and inspections: Open homes are prohibited and private viewings are strictly by appointment only and with the consent of the client and property occupants/tenants. There is a maximum of two viewings per property per day and a maximum of two people from an "extended bubble" can attend the viewing.

Physical distancing of two metres to be observed at all times and only one real estate agent can attend the viewing. The viewing must be contactless meaning that the agent should open any doors/cupboards. Attendees must be pre-registered

3. Pre-settlement inspections: These can take place following the guidelines for private viewings.

4. Moving house: Settlements and moving house can occur. REINZ is currently awaiting guidance whether inter-regional moves can occur.

5. Appraisals and listings: Appraisals must be carried out remotely where possible. If an appraisal cannot be carried out remotely, licencees may briefly visit homes to conduct appraisals with the permission of the client/s (and tenant/s if the property is tenanted). Only one licencee to attend the property. Discussions regarding the agency agreement, marketing and listing process must occur via telephone/ virtual methods only, not in person. Photography and videography to be carried out remotely by the client where possible.

6. Mailbox drops: Agents should not use letterbox drops to market a property for sale.

Alert level two:

1. Auctions: These can take place, but physical distancing of two metres must be maintained at all times. No more than 100 people may attend an auction in total.

2. Open homes: These can take place provided contact tracing systems are in place and physical distancing (two metres between bubbles) is observed.

3. Pre-settlement inspections: These can take place ensuring physical distancing is observed.

4. Moving house: Settlements and moving house can occur

5. Appraisals and listings: Agents may visit properties to carry out appraisals and listings provided they can do so safely with physical distancing maintained at all times and hygiene etiquette. If the property is tenanted, permission of tenants is required, which cannot be unreasonably withheld, per the Residential Tenancies Act. Discussions regarding the agency agreement, marketing and listing process may occur in-person provided physical distancing is maintained at all times. Photography/videography may occur provided physical distancing is maintained at all times. Home staging is allowed.

- Information supplied by REINZ and REA.

Reference: oneroof.co.nz 18.08.21