Coronavirus: Impact on Residential Conveyancing Transactions

Where contracts have already been exchanged:

All parties in the conveyancing process are urged to be flexible and try to agree alternative completion dates for a time when it is likely that the stay-at-home measures against COVID-19 are no longer likely to be in place.

If the property in question is unoccupied, completion can proceed on the original date however the buyer may not be able to physically move in to the property immediately especially if the buyer or anyone in their household are presenting symptoms, self-isolating or shielding. If the buyer does still intend to move into the new property while the stay-at-home measures are in place, social distancing and hygiene guidance should be strictly adhered to when moving in.

If the property is occupied (and the contract calls for vacant possession on completion), both parties should try to amicably agree alternative completion dates where possible. If it is not possible to agree an alternative date, the parties must follow the government’s social distancing and hygiene guidance on staying away from others during the move to minimise the spread of the virus.

If either (or both) of the parties are displaying symptoms, self-isolating or shielding from the virus, the parties should exhaust all other avenues to avoid moving house during that period if at all possible.

However, there is an exemption for critical home moves in the new emergency enforcement powers that the police have been given to respond to the virus, in the event that a new date is unable to be agreed.

Removal firms are advised to honour existing commitments where it is clear that the move can be done safely for all parties concerned and the move date cannot be changed and where the removers are not showing symptoms (however mild). Removers must follow government guidance on social distancing and hygiene.

Where a buyer’s mortgage offer is due to expire before the contractual completion date or shortly thereafter, UK Finance has confirmed that all mortgage lenders are being encouraged to extend the mortgage offer for up to three months to enable the buyer to move at a later date. If the buyer’s circumstances change during this three month period and continuing with the mortgage would cause the buyer to face financial hardship, lenders will work with customers to help them manage their finances as a matter of urgency.

We are working with our clients and our counterpart solicitors on transactions to agree solutions where contracts have already been exchanged, including negotiating variations of contracts to push back completion dates with long stop date provisions and agreeing to accept service of formal notices by email to enable completions to go ahead that are conditional on service of such notices.

Where contracts have not yet been exchanged:

Where the transaction is ongoing but contracts have not yet been exchanged, the parties are advised to either delay exchange of contracts until after the stay-at-home measures are lifted or include explicit contractual provisions to delay completion in the event the stay-at-home measures are still in place at the time of the original completion date.

Where transactions are still at an early stage, it is important to note that it may not be possible to arrange structural and homebuyers’ surveys at the moment due to the restrictions on movement. The official guidance is that surveyors may carry out desktop valuations but should not carry out non-urgent surveys in homes where people are in residence and no inspections at all should be carried out on properties if any person residing in that property is showing symptoms, self-isolating or being shielded.

Where urgent surveys on occupied homes are necessary and both the surveyor and the occupants are not showing symptoms, self-isolating or being shielded, the surveyor must follow government guidelines on social distancing and hygiene.

Our ongoing transactions are continuing to proceed and none of the transactions we are dealing with have aborted yet as a result of the COVID-19 outbreak, albeit we are noticing delays in the process generally including delays in mortgage offers being issued and search results being obtained etc.

Where a sale has not yet been agreed:

If a property is already on the market, the seller can continue to advertise it as being for sale but should not allow people into the property for viewings. Estate agents may be able to conduct virtual viewings although this is likely to have a limited appeal to prospective purchasers.

Provided that no physical viewings are permitted, there is no limitation or prohibition on making and accepting any offers on property, although the parties should keep in mind that the process may be more prolonged than normal and that the buyer will most likely want to view the property in person once the restrictions are removed and may well change his or her mind and withdraw from the transaction at that stage.

If a property is not yet on the market, although the seller can speak to estate agents over the phone or email and obtain desktop valuations, the selling agents will not be able to visit the property in order to take internal photographs and crucially, Energy Performance Certificate assessors will not be able to attend the property to carry out assessments. Properties may not be marketed unless an Energy Performance Certificate assessment has been commissioned. In short, the seller can use this time to instruct estate agents and conveyancers and gather the information for the legal sale pack but cannot commence marketing the property until after the stay-at-home measures have been lifted.

Although we have seen a slowdown in the volume of new deals being agreed, we are still seeing new sales being agreed and are still being asked to quote on new instructions. If you have any concerns about an ongoing or proposed transaction, please get in touch with us and we would be pleased to assist.