COVID 19 – Update – Property Transactions

Update 25/03/2020

A Government spokesperson said: “Home buyers and renters should, as far as possible, delay moving to a new house while emergency measures are in place to fight coronavirus.

“If moving is unavoidable for contractual reasons and the parties are unable to reach an agreement to delay, people must follow advice on social distancing to minimise the spread of the virus.

“Anyone with symptoms, self-isolating or shielding from the virus, should follow medical advice and not move house for the time being.”

Once you instruct us to exchange contracts to buy/sell your property, you will be legally committed to complete your transaction on the agreed completion date. The standard contract provides remedies/penalties (sometimes financial) for the rare occasion when you or someone in your chain fails to complete.

The standard contract does not, unsurprisingly, specifically provide for a failed completion due to a Coronavirus (COVID-19) situation anywhere in your chain. The Law Society and others are considering the situation and as time passes, we will begin to understand how COVID-19 affects the home moving process and those involved in it. We may then be able to include (upon your instruction) a recommended and accepted contingency clause in your contract/s.

Some of the issues which might arise are;

1. The owners/occupiers contracting COVID-19 after exchange and prior to completion which means they are unable to move on time.
2. Buyers or members of their families in a similar position to the above or where buyers refuse to complete due to the property having been occupied by those recently infected.
3. Law firms being short staffed or having to close.
4. Removal companies unable or unavailable to do their duties to aid moving.
5. Possible issues with lenders and release of funds and additional strain on the banking system.
6. Possibility of a “lockdown”.

Throughout this process it is fundamentally important that, as a firm, we look after the health and wellbeing of our employees and continue to act in the best interests of our clients.

Given these uncertain times, it is currently the view of this firm that, wherever possible, clients should seek to simultaneously exchange contracts on the same day as completion. Although there may be a disadvantage in there being no certainty regarding the transaction before the completion date, our view is that this outweighs the possibility of default.

We are of course, available to discuss this in more detail.