New Jersey Residential Real Estate Transactions and COVID-19
The Coronavirus/COVID-19 pandemic has affected the residential real estate market in New Jersey as it is one of the states most impacted by the pandemic. Although the Governor has deemed residential real estate transactions an “essential” business in New Jersey, many Sellers are hesitant to put their homes on the market for fear of brokers and potential buyers entering their homes, and many would-be buyers are rethinking a home purchase in light of the uncertain economic impact that the pandemic may have on them.
However, as the state slowly re-opens, we anticipate that the New Jersey residential real estate market to re-energize as mortgage interest rates are at all-time lows and many urban dwellers are inclined to “make the move” to the suburbs.
As the New Jersey residential real estate market picks up, buyers and sellers should be aware of certain contract changes which have emerged in light of the pandemic. New Jersey realtors have adopted an Addendum Regarding Coronavirus to be included with their standard form broker contract. Essentially, this addendum addresses two major issues: (i) potential closing delays that may occur during the real estate transaction as a result of the pandemic, and (ii) a change in financial circumstance of buyers. First, the addendum provides for a delay of the closing on account of potential delays resulting from COVID-19. For example, many lenders are working remotely. This could lead to administrative delays in final approval of the mortgage. In this circumstance, the addendum would allow for a closing to be delayed without either party being in default. Second, the addendum allows for a buyer to cancel the contract without default in the event the buyer loses his or her job or the pandemic otherwise results in a loss of their income. Even as the economy slowly re-opens, its economic impacts are likely to be felt for a significant period of time, therefore, it is essential when representing a buyer to include this provision in the contract.
In addition to inclusion of the broker form COVID-19 addendum, during the attorney review process, provisions to address delays which may occur during the inspection and appraisal process and the issuance of the fire/carbon monoxide certificate issuance should be considered. While, generally, buyers and sellers are held to perform the foregoing within certain prescribed time periods (otherwise risk termination of or default under the contract), delays due to the pandemic must be considered and allowed to account for the limitations imposed on businesses. These provisions would serve to protect both parties from delays which may be out of their control.
At DHD, we have successfully closed many residential real estate transactions in New Jersey over the history of our firm and during this pandemic. We take the utmost precautions to protect our clients both personally and contractually. Purchasing a home is usually one of the most significant financial investments one can make and we are dedicated to vigorously representing our clients and addressing their specific needs regardless of the circumstances.
If you would like to discuss a potential sale or purchase of residential lease or some other issue pertaining to residential real estate, please contact Lori Ciarrocca Duffy, Esq.
The information is provided solely for information purposes. It should not be construed as legal advice on any specific matter and is not intended to create an attorney-client relationship. The information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based upon particular circumstances. Each legal matter is unique, and prior results do not guarantee a similar outcome.
