REINZ Issues Information For Real Estate Profession During COVID-19 Lockdown Period
To help prepare the real estate profession for what will happen after 11.59pm tomorrow night when we move from an Alert Level 3 to an Alert Level 4 lockdown, the Real Estate Institute of New Zealand (REINZ) has issued the following information to the profession.
Please note: this is not legal advice, but provides a recommended approach in certain situations. Additionally, this information may change in light of further Government updates over the coming hours/days.
All comments below are attributable to Bindi Norwell, Chief Executive at the Real Estate Institute of New Zealand (REINZ)
Information is as follows:
For all situations, regular communication between all parties will be essential.
Essential Services: Real estate is not considered an essential service. The list of essential services is constantly being updated, so please click here to see the full list.
Government financial support package: Additional financial support measures have been announced. It is available to self-employed persons so does apply to real estate agents. Please click here to find out more.
The Government has announced an 0800 number for anyone who is unsure whether they are an essential service or not. This will be available of the Covid-19 webiste from 5pm tonight.
Real Estate Sales
Open Homes/Private viewings: These are not considered essential services so cannot take place in person. They could take place via online virtual tours or video conferencing type software, where people aren't required to leave their homes and no in-person contact occurs
Auctions: These are not considered essential services so can only take place via phone or online bidding methods
Settlements: In lockdown, vendors and purchasers will NOT be able to move in and out of their houses. For this reason, Auckland District Law Society is recommending that settlements be deferred until after the Alert Level 4 restriction is lifted. The party's lawyers will make appropriate amendments to the contract to facilitate this
Moving if a property settles during lockdown: Travel will be restricted to essential travel only e.g. pharmacy/supermarket trip, so settlements and moving house should be deferred until after the Alert Level 4 restriction is lifted. The parties’ lawyers will make appropriate amendments to the contract to facilitate this
Rural sales and tenanted property sales: Auckland District Law Society have considered situations where sales may not involve people leaving their home or any in-person contact (e.g. where a property is tenanted and the tenancy will continue after settlement) and have advised that whilst settlement can occur where no one has to have contact, purchasers and vendors may encounter difficulties when trying to get A&I, mortgage instruction, and other legal forms issued and signed. So, deferring settlement may still be the safest option. We would strongly recommend that the parties seek and follow the advice of their lawyers and not assume settlement can or will be able to occur. Physical property inspections cannot occur when we are under Level 4 lockdown
Bridging finance: Vendors/purchasers should talk to their bank or financial services provider in the first instance
Conditional contracts: These can still be confirmed during lockdown provided no travel/face-to-face meetings are required. If the condition(s) cannot be met during the Alert Level 4 period, then both the buyer and seller should take legal advice and either extend the condition until after the lockdown period or cancel the contract. The party's lawyers will make appropriate amendments to the contract to facilitate this
Pre-settlement inspections: These are unable to take place in person during lockdown, however, if both parties agree, these could take place using video conferencing
AML: DIA is working on guidance as to if and how CDD verification can occur during lockdown. We will let you know as soon as this guidance is released, which we understand will be tomorrow
Rental Viewings: These are not considered essential services so are unable to take place during lockdown unless done by virtual reality tour or pre recorded video/photos or other technology. If tenants need emergency accommodation, they should contact Work and Income
Routine inspections: These are not essential services, so should be deferred until after the lockdown period in consultation with the landlord and their insurer
Routine Maintenance: As this is not an essential service it should be deferred until after the lockdown period in consultation with the landlord
Urgent Maintenance: If this is related to essential services e.g. power, water, waste, gas then it is likely this can be undertaken during the lockdown period. However, we are awaiting confirmation from MBIE on this matter
Rental increases: Cabinet has agreed to freeze all rent increases. Rent still needs to be paid during this period, however, if tenants have lost their jobs and need support they should talk to their landlord/property manager at their earliest convenience to work out a payment plan or to see what financial support is available to them. Click here for more
No cause terminations: Tenants can not be issued with a 90-day no cause termination notice during the lockdown period. We are awaiting further details from MBIE on this issue
Owner wants to move back into the property during lockdown: The current law states a landlord must give 42 days’ notice if an owner or their immediate family wish to use the premises for their own use. Under the proposed changes (which are currently under review) this would increase to 63 days’ notice. We are waiting for confirmation in regard to which notice period should be used if this is required
Tenancies due to end or commence during lockdown: MBIE is confirming the situation and we will update members as soon as we have any further information.