The Impact of COVID-19 on Real Estate Transactions in Alberta
While the offices here at Heritage Law are currently open during regular business hours, we have had to make many changes to the way we operate to ensure the health and safety of our staff and valuable clients.
In fact, many industries have had to make significant changes as well.
What hasn’t changed is our devotion to supporting our clients.
When it comes to real estate transactions, many lenders and agents share the same sentiment and have accepted new ways of doing things in order to protect buyers and sellers as well as keep the real estate market moving.
If you’re looking to sell your home, buy a home or if you are caught somewhere in the middle, here are some ways institutions are modifying their procedures to help all parties involved:
How Lenders are Accommodating Borrowers
The COVID-19 pandemic is causing many individuals to lose employment and, consequently, their income.
Fortunately, there are many lenders who are modifying their practices to help out their clients during these uncertain times.
By offering special programs, policy changes and other services, some lenders are taking necessary steps to ensure that borrowers can meet the requirements to borrow and stay on track with their mortgage payments.
Keep in mind that lenders are not required to offer these services, so not all institutions will be offering these programs.
If you are concerned about what your rights are when it comes to real estate transactions during a period of lost income, feel free to contact our lawyers at Heritage Law for more information.
Otherwise, most lenders are finding ways to accommodate transactions with as little contact as possible in order to keep their employees and clients safe and healthy.
Here are some ways many lenders are offering to help during the COVID-19 pandemic:
Reducing Face-to-Face Contact
Protocols around social distancing have made it confusing for homeowners, or those looking to purchase a home, to navigate the process without face-to-face contact.
While lenders are doing all they possibly can to ensure safety, be mindful that there could be delays in the process. Many institutions and offices have been required to reduce their staff, so real estate transactions may take longer than usual.
Thankfully, many have adopted ways in which transactions can be completed without coming into close contact with others and risking exposure:
While providing digital signatures is not going to reduce the amount of money owed, it will give you peace of mind that you can make changes to your mortgage without risking exposure to COVID-19.
When it comes to buying or selling a home, and closing procedures, many lawyers are open to doing this virtually as well.
The goal of most lending institutions nowadays is to limit traffic and contact within their offices. Many will accept wire transfers for payments, especially when it comes to closing the sale of a house.
Lockboxes are a commonly used tool for real estate agents. Now, most are asking that keys be left in them in order to reduce how often the key is handled as well as limit foot traffic in their offices.
Negotiating Contracts and Covid-19 Clauses
The impact of COVID-19 on the real estate business has forced agencies, lenders and clients to modify the way real estate contracts are written in order to protect all involved parties.
Some of these clauses include:
- Extensions and delays. Real estate contracts are timely in nature, with closing dates carefully specified by sellers. This clause may be added to the contract if a buyer or seller is required to quarantine or delays in services push back necessary steps such as home inspections.
- Postponement of closing. If the Alberta Land Titles Offices, banks and/or law firms are required to close due to an upsurge in COVID-19 spread, buyers and sellers may include a clause in the contract to allow for closing once the businesses reopen.
- Loss of employment and/or income. Buyers and sellers may want to consider a clause that allows for the termination of the contract should the buyer lose employment or income. This ensures that the buyer is not held financially responsible to complete the transaction and the seller can immediately seek another buyer.
- Hospitalization. Should the seller end up in the hospital due to COVID-19, they may have to delay possession for the buyer.
- Physical viewing. More and more people are using virtual tours to choose a home, but they want to include a conditional clause that allows them to see the home physically before the process moves forward.
All clauses must be explicitly agreed to by both parties and worded carefully to avoid confusion.
If you are considered adding any of the above clauses to a real estate contract, it is recommended you speak to a lawyer first.
Navigating These Significant Changes
This pandemic is unprecedented and there is no rulebook on how to deal with these significant changes.
Thankfully, our professional and knowledgeable lawyers specialize in real estate law and can help you navigate the confusion and uncertainty of today’s real estate transactions.
For more information, please contact Heritage Law today.