Your guide to commercial real estate during COVID-19 L2

Alert 2 Commercial

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

With people allowed back to work and shops to open, Level 2 is a vital step forward for the commercial property industry. As companies send staff back to the office, they will have to stringently follow Level 2 guidelines of physical distancing, maintain excellent hygiene etiquette, as well as have organised contact tracing systems in place. All companies must have a plan for if someone in the office contracts COVID-19, is the clear message from the Government.

     

Offices

At this level, with contract tracing in place as a number one priority, commercial real estate offices can open for the public, staff and agents. 

Office managers should maintain a register of all people who enter the office, including the time they entered and left and all their contact details.

Good hygiene etiquette must be practised and offices must be regularly cleaned with a particular focus on high touch surfaces including stairwell handrails, door handles, personal workstations, table tops, lift buttons, microwaves and kitchen surfaces.

Offices should ensure workspaces are set up to maintain a minimum 1 m distance between those in the office. Consider other ways to ensure physical distancing is maintained such as staggering breaks, limiting numbers of people in the office and in lunch rooms. 

Staff and customers should maintain a distance of 2 metres from each other.

Offices must have a process in place to handle the situation where someone with COVID-19 is or has been in the office and communicate this to staff/agents.

    

Appraisals and listings

Agents, as long as they’re well, can visit properties and carry out appraisals and listings taking care to maintain physical distancing of 2 metres minimum.

The Government advises having discussions early on with the client about what might need to happen during the listing if the alert level changes.

Photography and videography may occur provided physical distancing is maintained and commercial staging is allowed.

Marketing can occur using standard methods, such as letter box drops, but brokers are asked to consider digital marketing. 

Personal contact should still be reduced with discussions about agency agreements, marketing plans, disclosures and so on by phone or video call.

   

Transporting customers

It’s fine to give one client a lift to a viewing, as long as they have no association with COVID-19 and they are not unwell with flu-like symptoms. The passenger must sit in the back passenger seat on the passenger side, to provide as much physical distance as possible.

Clients must confirm in writing that they have not been unwell with flu-like symptoms, or been in touch with a confirmed case of COVID-19 within the previous 14 days.

Agents must record the details of any interaction including the date and time, the customer’s name, contact details, the property visited, and details of those present for contact tracing.

      

Viewings 

Viewings may take place as long as contact tracing systems are in place and a viewing can go ahead safely with 2 metre physical distancing and hands sanitised when entering and exiting the property. If the property is tenanted, the tenant must consent to the open viewing or private viewing.  Commercial staging of the property is permitted.

The number of people in the property at one time must be limited to ensure physical distancing. This may mean staggering access to the property and requiring attendees to wait outside the property until prior attendees leave. 

Agents should discuss with clients how best to safely hold property viewings considering the size and characteristics of the property, bearing in mind physical distancing.  No more than 10 may attend these visits, one of whom will be the agent,  under current guidelines and they must keep a 2 metre distance from each other. 

Agents will have to have a queue management system organised in case attendees are waiting to enter the building in order to maintain physical distancing.

The viewing should be contractless where possible so the agent should have opened all the doors and cupboards before the viewing. 

The agent should also complete the register on behalf of attendees while maintaining physical distancing and good hygiene practices. Where possible, attendees should be electronically registered and given COVID-19 information.

For people who cannot attend viewings due to ill health or who have been in contact with a COVID-19 case, they are better to use virtual viewing options. 

    

Commercial auctions get the go ahead

In-person auctions can take place in accordance with the Government and Ministry of Health guidelines on public gatherings.

The number of people in the auction space at one time must be limited to ensure 2m physical distancing between different bubbles.

In every case no more than 100 people can attend the auction in total and no more than 10 from one group.

Hand sanitiser should be provided for use before and after the auction and COVID-19 information and hygiene notices should be on display.

Where possible, attendees should be assigned seat numbers and agents should create seating plans to help with contact tracing. 

Brokers should register auction attendees, taking their names, addresses, phone numbers and email addresses.  They should consider pre-registration where possible.

Attendance at auctions should be minimised still, encouraging children, family and neighbours to stay away. Prospective buyers can bid over the phone or look at online bidding options are other alternatives.

The auction space should be cleaned regularly with particular focus on high touch surfaces like stairwell handrails, door handles and surfaces.  Agents should keep registers for at least two months in case they are needed by Worksafe or the Ministry of Health. 

    

Sale and purchase agreements

Agreements can be negotiated and executed in person as long as done safely, the usual 2 m physical distancing, and agents should make sure to record the date and time of the visit.

Parties should use their own pens.

Clients and purchasers should be encouraged to seek legal advice on whether to include a clause to address how settlement will occur if the alert level increases to Level 4 before the settlement date. 

    

Inspections and Pre-settlement inspections

Inspections of the property can go ahead but make sure to record contact details of any professional visiting the property and the date they attended to help with contact tracing.

Pre-settlement inspections can go ahead as long as physical distancing, hygiene etiquette and contact tracing guidelines are followed for viewings as above.

If the property is tenanted, the tenant’s approval is required for the inspection.

    

Maintenance on commercial leased property

Maintenance can take place but agents are encouraged to gather information about any tenants who have been unwell with flu-like symptoms, have been self-isolating of been in contact with any COVID-19 cases. 

If any tradesperson visits the property, the date they entered the property and their details should be recorded to help with contact tracing. 

     

Cleaning and moving from leased space

Exit inspections can take place as long as they can occur within safety guidelines. It’s recommended that landlords arrange for professional cleaners to come in and prepare the property for the next tenants.   Moving properties can go ahead around the country. 

If possible agents should arrange for contactless delivery of sanitised keys.

       

Settlements and moving

Settlements and moving properties can occur, including from region to region. Ideally arrange for sanitised keys to be provided.

   

Thank you to the Real Estate Authority and to REINZ for outlining this information.