The real estate market across the country is bracing for an unpredictable season following the economic challenges created by the Covid-19 pandemic. Some analysts are of the view that extremely low costs of borrowing may not be enough to attract home buyers until the current climate of economic uncertainty begins to improve.
The job market that had been going all guns blazing has come to a screeching halt, which could set the stage for a sluggish housing market in 2020. However, housing sales is not the only challenge for real estate agents and investors right now, but also a host of commercial and legal issues may also need to be addressed going forward.
As many economists and large financial institutions are expecting the economy to go through a recessionary phase, the job losses across the country may mount further before the business and economy begin to stabilize. When people get laid off or their business gets shut down, they may quickly start missing their mortgage payments.
Lenders will have to facilitate mortgage modification programs requiring homeowners to repay their loans in smaller monthly installments. Experienced mortgage modification attorneys can assist homeowners in negotiating with their lenders for more conducive and manageable mortgage payment plans in the new economic scenario triggered by the coronavirus.
Impact on Existing Real Estate Sales Contracts
Many real estate buyers and sellers who have already entered into a contract may be wondering whether they could terminate the contract citing Covid-19 as an “Act of God” or in a situation where they are directly affected by coronavirus illness or quarantine. In these cases, it is best to consult with a real estate attorney who will assess the terms of the contract and provide appropriate legal advice.
A standard residential real estate sales contract is not likely to have a provision for termination of the contract due to a pandemic situation. The contract typically will have a clause that allows termination of the contract by one party if the other party fails to meet the conditions of the contract.
A reasonable solution may be for both parties to mutually agree to an extension of the closing date because of Covid-19 related illness, quarantine, local lockdown or shelter-in-place orders. A knowledgeable real estate lawyer can advise how to maneuver an extension in carrying out the legal obligations under the contract due to the pandemic.
Protection against Real Estate Fraud
During times of stress and uncertainty, fraudsters are the first ones to start taking advantage of individuals and businesses by perpetrating sophisticated scams, including real estate transaction frauds. They may send offers of distress sales of prime real estate at attractive prices, and ask for advance payments, or present fake documentation to lay an elaborate trap.
It is prudent in these times to exercise more caution than usual, and scrutinize the claims, offers and documentation offered by an unknown party. Any personal data or financial information should not be provided without first being sure that you are dealing with a legitimate buyer, seller or broker.
Real estate transactions involve large amounts, and it makes sense to have strong representation from a real estate attorney. They will be on your side and will protect your interests and your rights at every step of your deal. That is the kind of assurance and security you should have, particularly in the wake of the complications arising from the prevailing Covid-19 crisis.
Legal Advice on the Risks of Racial Discrimination
Covid-19 is an infectious disease, and when the origin of such diseases is associated with a certain geography or population, it can lead to unfortunate situations where a party gets wittingly or unwittingly charged with discriminatory behavior.
In the times of coronavirus illness, landlords, property managers, real estate agents and brokers as well as investors should be conscious about their legal obligations under state laws as well as the Fair Housing Act. No such action should be taken that gets perceived as discriminatory against particular segment of the society or an ethnic group.
While you are free to ask prospective clients, tenants, or associates whether they have recently traveled to areas with high risk of exposure to Covid-19, you have to be uniform in this type of screening for all potential candidates or prospects. And based on their responses, you should treat all parties equally.
It is best to consult with a seasoned real estate attorney who can help you cover all the legal bases in this unprecedented situation that has occurred due to a global pandemic.
Astute Legal Guidance is Available for You
Davis, Bingham, Hudson & Buckner, P.C. is one of the premier law firms in the greater Auburn community in Alabama for commercial and residential real estate transactions. For nearly four decades, we have been providing dependable and highest quality professional services to individuals, families and businesses.
We have the skills and the resources to get some of the most complicated matters resolved, especially with regards to real estate closings. To schedule a consultation with one of our real estate lawyers, call us today at (334) 821-1908.