As the novel coronavirus continues to rapidly change the way we live and work, property managers around the world are looking for information and guidance.
“I can’t honestly say that anybody was thinking about pandemics, maybe two months ago at least,” says Barry Blanton, IREM senior vice president and principal at Blanton Turner. “If we look at what we thought we knew three days ago, and we look at where we are this morning, it’s different.”
Every day we learn more about the virus and what property managers can do to protect their occupants and staff from becoming infected, and protect property owners from liability and financial loss. Since we’re well into this crisis, it’s a good time to evaluate your building strategies by considering the following:
Review your pandemic plan
Even if you already have pandemic plans in place, the rapidly evolving situation may require you to make adjustments. New issues to consider include:
- Managing your properties and workforce remotely—Consider your options to manage a property remotely with little-to-no on-site staff. This not only requires reliable technology, but also a change in the way managers interact with employees.
- Adopting new building technologies—Think about advances in proptech, and applying them to self-guided property tours, automated work orders, and remotely controlled systems that limit the number of physical touchpoints in your building.
- Protecting the privacy of occupants who fall ill, while also protecting the health of all occupants and staff—While it’s appropriate to inform occupants that an infection in the building has been confirmed, names and unit numbers cannot be communicated.
- Receiving packages safely and limiting the number of couriers coming through the building—If possible, designate entrances and spaces dedicated to deliveries, as we now know that the virus can survive up to 24 hours on a cardboard surface, and longer on a hard surface like steel.
- Adopting physical distancing guidelines, based on the type of property you manage.
Prepare for rent delinquencies
While the virus takes its toll on the global economy, millions of people are expected to become unemployed. We’re already seeing that in the hospitality sector. Although government assistance is on its way, it’s best to develop a plan now that defines how your business will respond to requests for rent abatement, deferral, and forgiveness. Implement your plan consistently, keeping in mind the balance between retaining occupants while meeting the owner’s obligations.
Real estate contracts are typically not written to address sudden and unforeseen conditions considered “acts of God,” known as “force majeure” clauses. Even if the clause is included in a contract, it has to be specified. The definition is typically limited to things like hurricanes, floods, volcanic eruptions, mudslides, wildfires and tornadoes. Fallout from pandemics is usually not included.
The impact on the real estate industry created by the coronavirus is just beginning to reveal itself, making it a good time to reach out to your legal advisors to assess your risk and put your business in the best possible position.
Leadership above all
Remaining calm, communicating well and often, and following guidance from respected sources like the CDC and WHO is critical in the face of this fast-moving and deadly virus. Life has changed for all of us—we’ve never washed our hands as much as we have in the past month. It’s important for property managers to recognize that their tenants and residents are looking to them for guidance, making it crucial for property managers to monitor new developments closely, share their knowledge and experience with others, and do all they can to stop transmission. Your job has never mattered more.
In addition to her role as 2020 president of the Institute of Real Estate Management, Cheryl Gray serves as the head of special projects and operational excellence at QuadReal Property Group in Toronto. She’s IREM’s first international president.