Covid-19 has put the spotlight on the fairness, effectiveness and clarity of the world’s legal and regulatory environment. New rules to establish how social distancing, virus testing and contact tracing all intersect with existing property and privacy laws have been created in a compressed timeframe. Each jurisdiction has undertaken policy-setting, rule-making and enforcement differently, resulting in a myriad of policies on return to work, rent relief and codes of conduct for forbearance, and for helping tenants or property owners get access to government grants and loans. Countries with federal systems of government have an especially bewildering range of new regulations to consider.
Another complexity is that waves of pandemic rulemaking have been followed by rounds of rule-relaxing and reopening, and with new spikes in caseloads, a fresh round of rules has been required. A confusing set of new, complex laws and policies are therefore constantly evolving.
Also fiscal stimulus and relief money has been quickly made available in many countries. The procedures for applying for and gaining access to these resources can be highly confusing or remarkably well-administered, depending on the jurisdiction, the property type and the clarity of the various relief acts. At times, they can also appear unfair when large, well-established companies appear to qualify for as much or more assistance than small and medium-sized enterprises. When it comes to property law, rent relief is proving to be a difficult set of policies to administer fairly and consistently.
Seeing the bigger picture
A key distinction between countries thus far has been their acknowledgement, or not, that property is embedded in a larger economic and social system. In some countries, like Australia, the Netherlands and Singapore, the authorities realize that as much as rent relief is needed for tenants, it also means that property owners may have trouble paying property taxes, covering common area charges and making mortgage payments. These countries recognize that real estate ownership is part of an interconnected economic and financial system, that raises property taxes to fund local infrastructure, generates income for pensioners and is a major source of employment.
The legal and regulatory environment for investors, occupiers and service providers comes with many new issues to tackle during the remainder of 2020 and in 2021. By 2022, most of the new regulations promulgated in response to the pandemic will have been integrated into planning and property law in a more coherent fashion. The shared responsibilities of tenants, owners and service providers will be clearer, and the science and technology that supports prevention, testing and treatment further advanced.
Jacques Gordon is global strategist at LaSalle
Jeremy Kelly is director, global research at JLL
JLL and LaSalle’s Global Real estate Transparency Index can be downloaded at: www.jll.co.uk/en/trends-and-insights/research/global-real-estate-transparency-index