Property, construction and development
Covid-19 has now been labelled a pandemic but what impact is it having on the real estate sector and what challenges are commercial landlords and developers coming up against?
In outline, the immediate impact of coronavirus on real estate falls into the following main areas:
- For commercial lettings, issues are about obligations, access to properties and impact on rent and service charge (see under “Premises”);
- For short term residential lettings, the same issues but also how the premises might be affected by an occupant/visitor contracting Covid-19;
- For buildings let on long residential leases, issues around maintenance and cleanliness of common parts and service charge recovery;
- For property transactions, the risk of delay putting a contracting party in breach, e.g.:
- failure to perform mandated steps in the transaction
- a critical person contracting Covid-19 and going into self-isolation
- a premises needing to be deep cleaned
- delay in execution of a document, whether signature or witnessing or returning to lawyers
- Funding for acquisitions or developments being impeded by delays in complying with loan pre-conditions;
- Planning permissions and other statutory consents being delayed by staff shortages at the local council or elsewhere;
- Construction and development obligations being affected by:
- shortages of people to carry out general construction operations
- interruptions in the supply of relevant materials
- absences of key individuals in areas such as design, survey, valuation, certification
- delays in the issue of necessary statutory or other consents
- Values of properties, particularly retail and leisure, may decline (at least in the short term), potentially affecting:
- banking covenants owed to current lenders
- funding for acquisitions and developments
- balance sheets and rental flows
If you are concerned about any issues relating to your property or development get in touch with one of our team who can help.
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