As lockdown continues with no end to that as yet confirmed or an exit strategy articulated, business is adapting to the “new normal” of working from home, social distancing and challenges presented by government guidance. Whilst there is no doubt that it has been a very difficult time for all involved in the Real Estate sector, it is a testament to the resilience of the industry and the professions that support it that, in a relatively short period of time, contingency plans have been activated and new systems and policies put in place to allow transactions to continue where at all possible. Here are just a few of the things that we have learnt from the last few weeks.
Covid-19 Clauses:
These are now being introduced with a view to protecting the position of the parties in the event that the current circumstances present obstacles which need to be overcome in relation to such matters as execution of completion documents (particularly where those are registrable at the Land Registry), disruption in the transmission of funds or other circumstances beyond the control of the parties. Clearly, given that only a matter of weeks ago, a lockdown would have been unimaginable, this type of provision will only benefit those new or ongoing transactions where contracts have not been exchanged already and issues remain in relation to those contacted prior to Covid-19’s appearance. However, the possibility of a second wave of Covid-19, or a future pandemic, is likely to ensure that this type of clause will become a common feature of drafting from now on: lawyers and legal know-how resources are busy issuing their own versions of proposed provisions which will, initially, form the basis for discussion and will inevitably settle into a widely accepted norm.
Proptech:
The wholesale, almost overnight, move to homeworking has prompted much greater engagement with not only the arms’ length conduct of business by email and ‘phone but also rapid “upskilling” in order to facilitate meetings via online platforms such as Microsoft Teams, Skype and Zoom. The use of electronic data and document rooms has proved an invaluable resource for the storage and access of documentation and information by clients, consultants and professional advisors all working in separate locations. Likewise, the quick adoption of new processes, both within organisations and between parties, and signature options to avoid the need for direct contact and paperwork has undoubtedly made a significant contribution to ensuring that, where possible, business can still be done.
Whilst there has long been talk of digitised transactions, electronic signatures and paperless working, the enforced exposure to what can be done remotely and online, may well result in an acceleration of the moves towards a new way of working.
Co-operation:
Whilst there will also be those who seek to take advantage of a difficult situation, generally speaking our experience is that the mood at the moment is one of consensus and co-operation with a view to facilitating business whether that be by way of agreeing practical solutions that would otherwise not be considered acceptable or allowing flexibility in terms of performance of previously committed obligations which it is simply too tricky or impossible to perform/satisfy at the moment.
When Needs Must:
We have seen that Governments can perform overnight what otherwise may have taken months, if not years, to achieve. Albeit emergency and temporary measures, legislation intended to protect commercial tenants, help to support small businesses and job retention schemes to mitigate job losses have helped to underpin the economy so that, at least for the time being, there is some stability, albeit that is resting on shifting sand, which has at least provided some assurance to the market.
Whilst undoubtedly the challenges presented by Covid-19 will lead to much uncertainty for a while to come, the embracement of new ways of working, thinking and doing witnessed during the short period since the crisis began are encouraging. Hopefully, once the shock to the system of the compulsory move to new ways of business has passed, it can only be hoped that the positives which have accompanied that will strengthen the sector as, hopefully, things return to normal whatever that may look like post Coronavirus. There is already news of a major housebuilder re-opening sites in 10 days’ time and so maybe the first steps on the road forward are not too far away…