South Africa: Opening Of The Real Estate Industry Brings Relief For Estate Agents Under Alert Level 3

Estate agents will be relieved to go back to work on Monday, 1 June 2020 under Alert Level 3 in terms of the new Regulations published on 28 May 2020. The Regulations explicitly state that businesses and other institutions may operate, except in the case of short term home-sharing, letting, leasing and rental for leisure purposes. This implies that most estate agents are now permitted to operate their normal functions.

As estate agents are a vital link in property transactions, this news will be welcomed by homeowners who want to sell their properties, buyers, tenants and other industry players such as banks, mortgage originators and attorneys. Previously, according to the Risk adjusted strategy dated 25^th April 2020, the real estate sector was considered service providers under Alert Level 2, save for commercial real estate which would have been permitted at Alert Level 3.

Businesses that are permitted to operate under Alert Level 3 will be subject to:-

• strict compliance with health protocols and social distancing measures;
• the return to work being phased-in in order to put in place measures to make the workplace COVID-19 ready; and
• the return to work being done in a manner that avoids and reduces the risk of infection.

Regulations under Alert Level 4 permitted Deeds Offices to resume with operations since 1 May 2020. Professional services such as attorneys and the banking environment in support of Alert Level 4 essential services were also allowed to operate. Unfortunately, estate agents could not operate, which was a blatant omission at the time.

Although submissions were made to Government by the real estate industry and the National Property Practitioners Council to motivate for the re-opening of the real estate industry, this did not happen during Alert Level 4. It seems that the concerns of the real estate industry have now been heard by Government. The industry and the South African economy would have suffered more than is necessary had this decision not been taken.

Hopefully activity levels in the real estate industry will increase in the near future, especially with the recent announcement of the decreased prime lending rate. These developments would make it possible (as properties can now be physically viewed) and most probably attractive (from a financing perspective) for prospective buyers to acquire property.