Even though the health situation seems to be under control for the moment in France, the economic crisis forecast could well be a major one. The IMF (International Monetary Fund) announced recently that the crisis would be global and that the economy would be hit by the worst recession since the Great Depression, when world GDP fell by 10%. In Europe, GDP could plummet by 10% and could decline by practically 13% in some countries like Italy and Spain. In France, the IMF’s forecasts seem just as pessimistic and broader than those of the Government (which is predicting a decline of 8%), because the country might unfortunately experience an expected recession of 12.5%.
In the property sector, there is no doubt that the consequences will also be significant, particularly with regard to the payment risks that co-ownership unions and property managers will have to face. Both the payment of rent for some tenants and the payment of co-property charges for some co-owners may be more difficult and lead de facto to an increase in outstanding payments. However, real estate professionals have long had solutions in their arsenal of services to protect themselves against such risks. Tenant default insurance contracts in particular, which virtually all professionals already have, will surely attract new interest from lenders who had not previously seen the point of taking out such coverage despite the sound advice of their agents.
Much less well known due to its recent advent, coverage for unpaid co-property charges is also the right answer to the legitimate fears of co-owners facing growing uncertainty concerning their co-ownership. However, real estate professionals will have to first be convinced of the complementarity of such new coverage in their service if they are to properly manage their mandate, as was the case a few years ago with the GLI (coverage for unpaid rent), which gradually but lastingly become part of their range of services. As with the GLI, coverage for unpaid charges will certainly meet the needs of their clients. The latter should be given an opportunity (once again, as with the GLI) to take out such coverage, to at least ensure compliance with the duty to provide advice.
To this end, Verlingue Immobilier has developed a dedicated product with these partner insurers which combines legal protection and coverage of unpaid charges in a single contract: Coprozen!