Feature article

Covid-19 and your business

A guide for real estate throughout the different alert levels.

This page will be updated with the latest development on how COVID-19 is impacting New Zealand's real estate market*.

From 6 AM on Sunday 28th February, 2021, Auckland moved to Alert Level 3, and the rest of New Zealand to Alert Level 2.

Here's a quick look at what that means in practice:

What it means to be at Alert Level 3 for the Auckland real estate industry

In the Auckland real estate world, auctions can only happen if conducted online or with phone bidding. Open homes are not permitted, and it’s back to private appointment viewings only.

Once again, it’s all about keeping that 2 metre physical distancing, contact tracing, and close attention to hand washing hygiene.

Settlements and moving house can occur, as can pre-settlement inspections. Appraisals should be carried out remotely where possible and if this can’t be done, then only one licensed agent should visit the property.

Real estate agents will be able to visit homes being prepared for sale but they may not have customers to their office and are advised to work from home.

Photographers, videographers and home stagers can also visit homes being prepared for sale if their work can’t be done remotely, as long as they keep to the Alert Level health and safety requirements, and maintain 2 metres distance from occupants.

Property inspectors, valuers, engineers and tradespeople, such as plumbers and electricians are able to enter homes if necessary. They must maintain the recommended distance of 2m, comply with their industry-specific Alert Level guidance, and have the permission of the property’s occupants to come to the home.

People who have purchased homes will be able to physically move into them with furniture removal companies allowed to operate.

In the last Alert Level 3 lockdown, another Government exception, noted by the REA, says that people can travel into and out of Auckland if they’re returning to their primary home or relocating to a home or business

Private viewings

Private viewings of homes for sale or rent are allowed by appointment under Alert Level 3, as long as permission is given by the vendor and the property’s occupants. Occupants must leave the premises while the viewing takes place. Two private viewings per day are allowed on properties and two people from an extended bubble can attend this visit with the agent. They must keep the recommended physical distance from the agent and can’t touch any surfaces in the home. People can’t travel between regions to view properties.

Those who attend a private viewing must be pre-qualified to ensure they are serious buyers. The agent must email them the relevant Alert Level information beforehand, which includes hygiene expectations. Private viewing attendees must pre-register, providing names, addresses, phone numbers and email addresses to help with contact tracing.

No private viewings can take place at properties where occupants have been ill with flu-like symptoms, are self-isolating, or have been in contact with a confirmed case of COVID-19 within the previous 14 days. High risk people – those over 70 or with existing medical conditions – shouldn’t attend viewings if possible.

The private viewing must be contactless, so the agent or property manager must open all internal doors and cupboards before the viewing goes ahead. Attendees have to wait in their cars until the agent or property manager advises them they can enter the property, ensuring there is no contact between attendees.

Making an offer

All offers, including auctions and multi-offers, should be presented by email, phone or video call. Your agent will work with you to put the terms and conditions you would like into the sale and purchase agreement. Then purchasers will send a copy of this to your lawyer to check before you sign it electronically. You can also receive it and send it back by contactless delivery.

Appraisals

If an appraisal can’t happen remotely, agents can briefly visit homes to conduct an appraisal with permission of the vendor or tenants.

Discussions about the agency agreement, marketing and listing process can only happen via telephone or virtually, not in-person.

Settlements

Property settlements can happen and home moves can occur between regions.

Pre-settlement inspections by professionals may take place but only if the inspection is a condition of a sale and purchase agreement and where the inspection can’t be carried out remotely. The purchaser should not attend this inspection, they can only follow the inspection virtually.

Under Alert Level 3, conditional and unconditional contracts can be made. Contracts must be signed electronically or there can be contactless pickup or delivery if absolutely necessary.

Real estate activities which can’t happen

Public auctions, on-site or in auction rooms, can’t happen under Level 3.

Virtual auctions are possible and phone bidding is an option. Some vendors may decide to sell their homes in a different way.

Where the terms of an auction say only unconditional bids can be accepted, REINZ recommends the agent talks to the vendor about providing professional reports for the property. Where this happens, the agent must explain to potential buyers the risks of relying on a report commissioned by the vendor.

While open homes remain off the cards, agents and vendors can use video and 3D tours to give buyers a flavour of the home. On Trade Me Property, 3D tours and video viewings are available on a number of listings, the video and 3D tours highlighted in bright green icons on relevant listings on the platform. Useful buyer information such as floor plans and LIM reports, will continue to be available on request from the selling agent.

Agents are not advised to use letterbox drops to market a property. Visiting a property with a group of agents isn’t allowed either. Agents will have to rely on property videos and photos.

Bridging finance

Buyers and sellers can talk to their bank or mortgage provider about bridging finance if need be. Banks will be looking closely at applicants’ job security and are occupied helping existing homeowners restructure their mortgages as lockdown conditions impact businesses’ ability to operate.

Rentals

Private viewings of rentals are allowed by appointment, with up to two people from an extended bubble and one property manager. These can only happen when the current tenants are away from the house and visits must be spaced apart in time to allow for time to sanitise after the previous appointment. Again as with homes for sale, attendees must wait in their cars until you are told the home is ready for entry.

Photography and videography of rentals are to be carried out remotely by the landlord or tenants where possible. Photographers or videographers who go to the home must adhere to the Alert Level health and safety requirements.

Management and tenancy agreements

Negotiating and executing agreements must be contactless and must be explained over the phone or virtually. Appraisals must be carried out remotely where possible, with physical appraisals allowed to happen at Alert Level 3.

Tenants can give notice on their rental contracts and they can move from their rental home under Level 3.

At this point, notice can be given to terminate a tenancy, says REINZ However, if we move further up the Alert Levels and emergency legislation is again brought into effect, then the notice may not be enforceable – as happened previously during lockdown.

Landlords should arrange for professional cleaners to make a vacant rental property ready for new tenants. At the end of the tenancy, rather than the landlord and tenant doing the final property inspection together, which is what usually happens, it’s recommended the tenants take photos of the property’s condition before leaving.

The rental freeze on rent increases remains in place as it was made for an initial six months.

Routine inspections are prohibited at Alert Level 3. These should be completed remotely in agreement with the tenants or be rescheduled. In-person inspections can only happen in an emergency.

Home maintenance

Only urgent maintenance visits to homes will be allowed at the new alert level with plumbers, electricians and similar, taking care to keep the required 2m safe distance from those in the house. Ideally, occupants will leave the home during their visit.

What it means to be at Alert Level 2 for NZ real estate

At this level, there can be no groups larger than 100. There’s a return to 2 metre physical distancing in public and in stores and 1m distance in workplaces, cafes, restaurants and gyms. Where physical distancing isn’t possible, you should wear a mask. You should also have contact tracing systems around every in-person meeting or event and pristine hand wash etiquette expected when arriving and leaving a property.

Auctions and open homes can go ahead but with 2 metre physical distancing and no more than 100 people total in attendance.

Open homes are allowed

Open homes can still go ahead as long as groups don’t exceed 100, and remember your physical distancing between bubbles, hygiene etiquette and contact tracing.

The Government has stressed that you need to adhere to a minimum of 2 metre physical distancing from anyone unknown in an open home. Hygiene etiquette should prevail with agents cleaning high touch areas in home viewings and ensuring that contact tracing is set up for all parties involved. The contact information you give agents at a variety of meetings in the real estate journey will be kept for two months or more in case it is needed by the Ministry of Health.

Private viewings are easily arranged by using the Trade Me Property “Request a viewing” button. Private viewings or virtual viewing options can be used for buyers who can’t comply with health requirements or for at-risk people.

At open homes, contact tracing systems should be in place, agents noting the details of all the open home attendees. The private viewing or open home should be contactless where possible, so agents may manage the open home register themselves to limit contact with pens, registers and tablets. You may also be asked for an official form of identification such as a driver’s licence.

It’ll be the agent’s responsibility to ensure attendees are keeping to the advised 2 metre physical distancing, by considering the layout and size of the property. It may be that agents stagger entry to the property and have a system for managing a queue. You’ll be asked to remove your shoes prior to entry and offered hand sanitiser as you enter and exit the property. After the open home, the agent will sanitise all the areas that may have been touched.

For those with a house on the market, discuss with your agent how best to safely hold property viewings, given the size and characteristics of the home.

Auctions are allowed

You can safely attend auctions in person and sell by auction as long as bidders keep to health requirements of 2 metre physical distancing and stick to hygiene etiquette.

A maximum of 100 people may attend the auction, whether it’s held outside or inside. Real estate agencies will have made sure there are measures in place to allow for the appropriate 2 metre physical distancing depending on the size and layout of the auction venue.

If the auction is held at the property for sale, the number of attendees may need to be kept adjusted if the layout and size of the property prohibits the appropriate physical distancing.

If you attend an auction you’ll be asked to register or possibly to pre-register, and these details may be kept for two months or more in case they are needed by WorkSafe or the Ministry of Health.

Expect agents to provide you with digital auction packs rather than printed ones, and you’ll be able to bid remotely, via phone and online, if you prefer.

Real estate offices are open

Real estate offices are open for business and able to take walk-in inquiries from home buyers and sellers who must keep a 2 metre physical distance.

Signing the tenancy agreement

Agents and clients can meet in person to negotiate and sign the agency agreement, while maintaining the 2 metre physical distancing and hygiene etiquette. Surfaces should be sanitised and parties should use their own pens. The details of the parties in this meeting will be recorded for contact tracing purposes.

Agents transporting clients

You’ll be able to ask for a lift from an agent if there are no concerns of COVID-19, but they can only transport one person at a time. You’ll have to sit in the back passenger seat on the passenger side, not behind the driver, to make sure there is as much physical distance as possible. The areas of the vehicle which you may have touched will be sanitised afterwards

Making an offer

Sale and purchase agreements and listing agreements can be negotiated and signed in person once more either at people’s homes or at real estate offices. Make sure you don’t share pens. A 2 metre physical distance should be kept between parties, surfaces should be sanitised and details for contact tracing will be expected.

Appraisals, home inspections and marketing services

As a buyer or seller, you can ask for your home to be inspected by a range of professionals, including building inspectors, valuers and others. They’ll have to keep a 2 metre physical distance at all times.

No one can visit a property if the occupants are unwell, are self-isolating or have been in contact with a confirmed case of COVID-19 within the last 14 days.

An agent can visit your home if you’re thinking of selling. They can now complete a physical appraisal, providing they meet all the health requirements.

Photographers, videographers and home stagers can visit the home to help with its marketing, as long as 2 metre physical distances are kept. They have to comply with the health requirements, physical distancing and ensure that surfaces are sanitised.

For buyers, it’s okay for you to visit the property with your professional or tradesperson if you all comply with health requirements.

Bridging finance

The finance environment remains very supportive to buyers who can display good job stability and a healthy deposit. Speak to your mortgage adviser about any plans to use bridging finance.

Rental property

In-person routine rental inspections are happening now as long as they can be carried out safely. Property managers have to make sure that no one is unwell at the house with flu-like symptoms or has been in contact with a COVID-19 case. Property managers can also visit properties to carry out appraisals and listings provided they can do so safely, within health guidelines. Home staging is also allowed at Level 2.

Selling a tenanted property

At this point, notice can be given to terminate a tenancy. However, says REINZ, if we move further up the alert levels and emergency legislation is again brought into effect, then the notice may not be able to be enforced – as happened previously during lockdown.

Landlords can’t apply to the Tenancy Tribunal to end the tenancy for rent arrears unless the tenant is at least 60 days behind in rent.

Rental viewings

Rental viewings are allowed and can accommodate up to 100 people. The usual 2 metre physical distancing must be maintained between bubbles.

The property manager may stagger access to the property to meet distancing restrictions if there’s good interest and so you may have to wait outside the home until others have gone through.

Everyone who wants to attend will have to provide all their contact information for contact tracing.

The rental viewing should be as contactless as possible so the property manager should open any doors and cupboards before the viewing begins. Home staging is allowed to go ahead.

You’ll have to remove shoes prior to entry and hand sanitiser will be on offer as you enter and exit the property.

Rental viewings won’t be permitted at homes where the tenants have been unwell with flu- like symptoms or been in contact with a confirmed case of COVID-19 in the last 14 days.

Management and Tenancy Agreements

You can negotiate rental agreements in person as long as this is done with physical distancing. You can also do it via phone or video call to reduce personal contact. If done in person, everyone should use their own pens and the details of the visit should be recorded, with contact details of the people present noted for contact tracing.

Cleaning and moving

Property managers and landlords can come and make exit inspections as long as they can happen safely. Landlords are advised to clean a vacant rental property professionally so it’s ready for new tenants. Any visits to the home should be recorded in detail with contact details of those present.

Contact tracing

The NZ COVID Tracer QR code poster should still be displayed at workplaces and businesses. As well as real estate offices, this includes auctions, private viewings and open homes. 

You also need to provide an alternative form of registering for people who don't have the COVID app, and inform people using it that their details will be kept for a minimum of 30 days.

Similarly, any professionals and tradespeople you contract to visit a property need to have their details recorded and kept for 30 days.