Ever since the COVID19-pandemic broke out, all industries have been affected whether for the good or the bad. With at least half the world confined to their homes and living under quarantine, the real estate and conveyancing sectors are experiencing a slowdown. With people focusing on securing food and sanitation supplies, what are the current issues these two sectors are experiencing?
5 Challenges the Real Estate and Conveyancing Sectors are Experiencing
Defaults on Loans and Payments
It comes as no surprise that when the world is experiencing a pandemic and a recession all at once, there will be individuals and corporations that will fail to pay their rents and loans on time. Some small to medium businesses are also experiencing a struggle when it comes to keeping their revenues up while paying their operating expenses at the same time. These things alone will highly impact the paying capacity of every tenant and debtor.
Moreover, when it comes to loans and rents, payments are not the only things that could get affected. For some, the contracts of their leases and their loans can be heavily impacted.
Force Majeure Focus
Due to the COVID-19 pandemic, more and more people will be looking at their force majeure provisions in order to protect their interests during cases when there are unavoidable and unforeseen circumstances. Force majeure provisions different from contract to contract and the laws that apply to those contracts. Nonetheless, these provisions will be getting more attention from both negotiating parties.
Several countries have already imposed a suspension on evictions. For the United States, 34 states have already suspended evictions during the course of the pandemic. To add to that, the government has also given a moratorium of 120 days for all housing subsidized or loaned by the government. In Europe, several countries have done the same action as well by suspending evictions and even giving mortgage relief.
On top of the eviction suspensions imposed in other countries, parties should also consider applying for rent relief for commercial spaces. Rent relief varies from country to country or from state to state. For some, rent reliefs may not be beneficial for the lessee especially when their contract will be affected.
Although it will not be a good year for the real estate and conveyancing sectors, it is not all lost. Other companies and individuals are looking at the pandemic as a growth opportunity. With land and space falling from their usual rates, some are taking advantage of this drop in prices. This can be attributed to the thinking that when the pandemic is over, the economy will slowly get back up and real estate along with it.
Slower and Lower Growth
While the real estate and conveyancing sectors are seemingly in a halt, it is still projected to grow although slower and with lower rates. In fact, real estate agents are still continuing their operations even when working from home. Like what was mentioned above, there are still people who are grabbing this opportunity to acquire land or to buy the homes they have wanted for a long time. And when the real estate has picked up its pace again, the conveyancing sector will also rise slowly.
Overall, there are certainly more challenges experienced by real estate and conveyancing. In some countries, there has been a huge halt in their operations. However, other countries that are slowly recovering will be able to pick up the pace while taking necessary precautionary measures in ensuring the resilience of their real estate industry. As for real estate agents and conveyancers, they should be able to anticipate drastic changes in their market due to the pandemic.