The PMA Team met via ‘Zoom’ this morning and the following is provided as a summary of how the New Home Industry is responding to the COVID-19 Crisis.
- OREA advises no person to person contact
Real estate was categorized as an Essential Service and is being encouraged to move to e-commerce and e-communication. In a bulletin, yesterday OREA advises…. “all realtors should stop face to face business, including open houses, in-person showings, and maintaining agents and public office hours”. All members should be moving to remote work.
The government gave the ‘essential’ label to real estate to permit transactions to close…NOT to carry out normal business practices.
- PMA Offices Close, Communication moves on-line
PMA had sent our HO staff home last week. All managers are working from home. We have equipped all with Zoom, Calendly for appointment management and DocuSign. We are setting up all our salespeople with the same tools. A ‘Zoom Meeting’ training webinar is being conducted next Monday with our teams.
Some sites sales offices are still open…locked and with no person to person contact. All communication is on the phone or online. Appointments are being generated by social media connectivity and accommodated on-line. Many site sales offices are closed and communication is directed on-line. It’s interesting to note that some new sales are being done. We are encouraging follow up with prospects and purchasers either remotely from home or at the locked Sales office.
- Closing delays expected
Residential construction also was labelled an ‘essential service”. However, there has been push back from several Unions related to protecting their members on site…social distancing will be very challenging to enforce…so expect some sites to have limited activity. Mattamy which had previously paused their construction activity is reviewing how to get started again. I apologize to Mattamy for inferring that they had shut down completely…. this was not my intention in the last Update. Mattamy ‘s Division Offices are all open and they are making an extra effort to communicate with both their purchasers and their prospects on all issues regarding their new Mattamy home. Watch for further updates as all builders find ways to protect consumer and employee safety and still get that new home delivered.
- What’s happening with Deposits?
All New Home transactions generally require staged deposits. There have been many requests for deferrals. Most builders are dealing with this on a case by case basis for those purchasers with income affected by COVID-19….several have extended deposit cheques that are due now an additional 30 days…this is not a uniform policy.
- What’s happening with Occupancy Fees?
Condominiums require occupancy fees…just like rent…which covers the period from when you move in until Final closing …this can be a period of several months. There have been enquiries requesting postponement of these ‘rental’ fees. These are being dealt with on a case by case basis but generally, this occupancy fee must be paid. Failure to do so a breach of a contract and could result in an eviction notice. Eviction can’t happen during this COVID Crisis, however, those that don’t pay or refuse to pay the occupancy fees could be subject to rather harsh consequences of contract breach when the State of Emergency is lifted. The developer uses these fees to cover the cost of his construction loan prior to Final Closing. As a result, any relief may be out of the developer’s hands and as such is likely to be very limited. Consult your legal counsel on what options there are for both builder and purchaser, it may be dealt with on the same basis as Deposits….short term extensions that will have to be paid back.
- The DropBox
As paper is delivered to your head office or sites Amazon and Staples offer a lockable steel dropbox in varying sizes…get one before there is a run on this item. Sanitizing paper will become an issue and we will investigate solutions for this.
- Paradise is followed by Fieldgate
The online opportunities are evolving as Builders look for innovative ways to launch new projects without person to person contact. All are being very sensitive to social distancing but the fact remains that the industry needs to adapt to the COVID challenge and develop programs to reach their customer without face to face business This was introduced by Paradise and Fieldgate is developing a similar outreach with Ryan Design. We will let you know how they do…but connect with Gerry Ryan and his team if you want to explore their on-line programs…very impressive.
- Dr. Peter Andersen…The Peak is the Signal to Recovery
My good friend Dr. Peter Andersen keeps his pulse on both the US and Canadian economies with a particular slant to the Homebuilding Industry. I note a couple of key points in his latest Newsletter where he suggests that the Peak of the virus will be the signal for recovery. He thinks this may be mid-year in Canada and the US causing both economies to stabilize, and slowly recover before year-end. Expect a steep but short recession. Dr. Peter says….” Don’t be surprised when terrible economic numbers are announced in the coming weeks…the media will pounce on this with alarmist commentary”. The key news is where the virus is heading…the economic bad news we already know about…. when the curve begins to plank the economic news will begin to turn in a positive direction. The stock market will surge as cases diminish…Rates will stay low for a long time…Home Building will be one of the first to recover…Dr. Peter notes that Canada’s financial package is only 2% of GDP…the US is 8%…Canada may have more work to do….contact Dr. Peter to subscribe to his newsletter …his insights are right on !!!
- We will get through this…it’s a great time for innovation…“It’s better to fail in originality than to succeed in imitation” …Herman Melville
So, give it a try and make a difference out there!!!