Property Litigation | Real Estate | Legacies
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During lockdown we are acclimatizing to working from home and adjusting to new virtual ways of working. In a technological age many businesses can function effectively online, but the property sector, which ordinarily operates by way of viewings with agents, surveyors' inspections, and movers has effectively been forced into hibernation. The impact of Covid-19 from both a practical and economic stance has already had a significant impact on charities' legacy income, as property prices drop and stock prices drop. Legacy Foresight has predicted that legacy income could fall between 3-9% in 2020, although hasten to add that given the current uncertain climate these outcomes could vary quite significantly.
As numerous fundraising activities have been postponed for social distancing reasons, legacy income generated from property sales is more vital than ever for a charity's income flow and future survival. In this time of crisis charities are among those looking for assurance from both the government, and the property sector, in how to safeguard and deal with the shifting housing market.
The Government's advice on 26 March stated that "there is no need to pull out of transactions that have already been agreed". However, on the ground legacy teams are seeing a freeze on sales across the board and a delay in legacy realisation. Some charities are also experiencing buyers trying their luck by negotiating quick sales at a huge loss. Donna Brown, Legacy Manager at Alzheimer's Society said, "all my properties have come to a standstill as agents can’t get in to show potential buyers around. I've had to adjust my pipeline figures and put all property matters on a 6-week review".
The management of probate properties is also proving to be a challenge with many clearance companies initially downing tools due to confusion over social distancing, and the safety of both employees and clients. After some pressure from the industry the government have now classified 'waste operators' as key workers and it is recommended that clearance companies can enter vacant properties 72 hours apart, being the current opinion on how long the virus might be able to survive on surfaces.
Nevertheless, it’s not all doom and gloom and in recent days we've seen the property sector trying to adapt to keep the market afloat. It's encouraging to hear Zoopla's Director of Research, Richard Donnell say, " We expect demand to pick up again once physical restrictions are eased and don’t expect any big movement in house prices during the coronavirus lockdown".
An update on the implementation of Confirmation of Payee Published 20 03 2020 Making sure that people are protected from Authorised Push Payment (APP) scams is very important – particularly right now. With people and businesses having to adapt their ways of working in light of the Covid-19 pandemic, we wanted to provide an update on the implementation of Confirmation of Payee (CoP).https://www.psr.org.uk/psr-publications/news-announcements/psr-update-on-implementation-of-CoP
So, during these uncertain times what practises should charities adopt to ensure they're protecting what is usually their most valuable legacy asset? Points that you should consider include:
Our Legacy team can advise you on a range of legacy income matters including property, probate, contentious probate and legacy administration and are happy to speak to you about any challenges you are facing. Please get in touch one of our team members below or visit our Legacies page to find out more.