Navigating Real Estate During COVID-19
by Jamie Heiberger Harrison
Every week the rules seem to change: Court rules, building rules, Administrative Orders, City Ordinances and State regulations…
The fluid dynamic is frustrating but understandable. We are, after all, still dealing with a novel coronavirus and while the seasons may change, ever-changing risks remain. I can tell you one thing for certain: it is an interesting time to be a real estate attorney.
The real estate industry has been particularly hard-hit by COVID19. Renters of residential properties have broken leases as a matter of course, forcing owners to mitigate their damages by having to re-rent at significantly lower price points; and they are often left to chase the renter for any and all deficiencies.
On the commercial side, cases started after March 17, 2020 will not be heard until an indefinite point in time, and all evictions were on hold until October which has now been extended under a federal moratorium to December 31, 2020. Even Owners who started cases pre-COVID must go through an uncertain process to seek leave of the court in order to get their warrant and eviction.
What about all of the cases that didn’t have judgments pre-COVID, or cases that were started with the tenant was already in arrears? Unfortunately, we just don’t know. Owners and Managers frequently ask whether it makes sense to even start new matters. We would like to believe that filing the action sooner rather than later will have the effect of ensuring your case will be ahead of cases that are not started at this time…but again, we just don’t know.
It does appear that about 25% of actions brought or letters written results is some form of relief for the Owner, even if it means collecting a significantly reduced rent, obtaining possession or working out a deferral agreement. So, while it’s true there’s a lot that we don’t know, there are some trends that have started to emerge, and it makes sense to remain alert and flexible.
Buildings, Co-Op & Condo Boards each have a unique set of rules for moving into and out of their buildings. Make sure those rules have not changed up until the day of you or your clients’ plans. Management companies have adopted unique protocols including how to gain entry to a building as well as rules regarding alterations and renovations. Many buildings instituted strict policies limiting the number of jobs taking place at any one time. As such, it is crucial that your clients have the information to assess whether a particular property is feasible for their needs.
These are just a few examples of the issues that my team and I constantly investigate as part of the due diligence surrounding our practice. I find my teams Comprehensive written Due Diligence report for our buyers more important than ever and if you have not seen one of our reports I do highly recommend, especially during these uncertain times.
In Love and Law,
Jamie
