WHAT DOES LEVEL 4 OF LOCKDOWN MEAN FOR THE REAL ESTATE SECTOR? By Marlon Shevelew

Property owners, tenants, and estate agents have been prevented from going about their normal day to day operations. The lockdown regulations promulgated in terms of the Disaster Management Act 57 of 2002 have prevented people from relocating, and conducting ongoing and outgoing inspections.

According to the Draft Framework, commercial real estate services will be allowed to resume under level 3, and that all real estate services may resume under level 2. This means that for the districts that are at level 2, estate agents will be able to carry out all their functions, and for those at level 3, estate agents will be able to carry out all their functions in respect of commercial properties.

Relocation is not specifically addressed. Under level 5, which is what the current regulations represent, people are to stay at home, other than essential travel for work and to purchase essential goods; this, along with the ban on interprovincial travel has prevented people from relocating. It is interesting to note that even at level 2 the corresponding provision is exactly the same; only at level 1 is there no restriction on personal movement. It seems therefore, on a plain reading of the Draft Framework, that people will only be able to relocate once their respective district is at stage 1.

Finally then, each district municipality’s level will determine what is and is not permissible. In this regard, a prediction of what the level will be in each district municipality was tweeted by News24.

In summary, there is still widespread uncertainty surrounding what the lockdown levels and Draft Framework mean for the real estate sector. In terms of the Framework the functions of estate agencies on commercial, and to a lesser extent residential, properties may soon be recommenced. However, it appears as though the restrictions on personal movement remain very much stringent, and may well be a bar to relocations by tenants and/or landlords for the foreseeable future.

Here are links to the documents references:

This article was originally shared in the Property Practitioners Facebook Group & published here with the permission of Marlon Shevelew.

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