Residential conveyancing in the light of the coronavirus pandemic
If you are partway through the conveyancing process or thinking about buying or selling a property, you need to be aware of the guidance and procedures being put in place by the Government and other authorities such as the Law Society due to the global pandemic.
The main message being communicated by the Government is that ‘prioritising the health of individuals and the public must be the priority’, and from this, most residential property transactions should not be completed at this time. There are safety issues for individuals moving between properties, because it is unknown which surfaces in a property and/or people in the moving process may be contaminated with the coronavirus. Due to the physical aspect of removals, professional removal companies are unlikely to be available for some time and the private hire of vans is also likely to be limited.
We have set out some guidance in relation to your frequently asked questions and explain here how we might be able to assist.
I have exchanged contracts and my completion date is during lockdown – what can I do?
In most transactions, the parties will need to negotiate in order to agree a later completion date. All of the conveyancers in the chain of transactions need to agree the legal provisions for this. In order for the new arrangement to be legally binding, a round of telephone calls are made similar to the procedure for exchange of contracts.
You should speak to your conveyancer immediately if you are in this situation in order to discuss the options that might be available. If you or anyone else in your conveyancing chain are obtaining a mortgage, it is important that you establish whether any mortgage offer will still be valid, to enable your completion date to be deferred. Most mortgage lenders appear to be prepared to extend the mortgage offer by three months where a party has already exchanged contracts, but confirmation must be sought from the lender first.
Are there any transactions that can still complete?
There are some transactions which may still be able to complete. If a property is empty, then the seller is not dependent on removals and, so long as the seller is not dependent on another transaction where completion is not possible, the seller should be able to complete if the buyer can too. The buyer would be able to complete so long as the buyer is not dependent on professional removers nor any sale which cannot be completed. This is only likely to happen in a minority of conveyancing transactions and the Law Society and the Government emphasise that public safety is the priority.
When completing and taking possession of a property, the new owner needs to pay close attention to the public health guidance applicable at the time. This is likely to involve ensuring the premises are sanitised so far as possible to minimise the risk of the coronavirus being transmitted.
I have not yet exchanged contracts, what should I do?
The general guidance is that contracts should not be exchanged until a further review of the situation and the current restrictions has taken place and updated guidance issued by the Government. You should personally assess the risks posed by completing your transaction during the current global pandemic and come to your own conclusion before instructing your conveyancer to exchange contracts. Once contracts are exchanged, you have created a legally binding contract with the other party and the legal consequences of breaching this would be significant and undesirable.
However, there may be advantages to progressing your sale or purchase in the interim. In the case of a purchase, the investigation into the title and the property itself is undertaken prior to exchange of contracts. Instructing your conveyancer to carry on with the normal procedure but not to exchange contracts would enable information about the property to be obtained by buyers, enabling the transaction to proceed smoothly once the restrictions are lifted. It gives time for any specific issues to be looked into and discussed.
If your transaction involves an unoccupied property and either no conveyancing chain or a short one in which all the parties are able to finalise the move (as explained above), only then should you consider exchanging contracts. You need to be alert however to the risk of the situation changing rapidly. Exchanging contracts to make a binding legal deal should be delayed if at all possible so that it happens on the same day as completion, to avoid the risk of being in breach of contract.
I am thinking of selling, what should I do?
Due to the restrictions on movement, there are bound to be significant practical difficulties with marketing a property at present. A potential buyer will not be able to visit the property and even if they are willing to make an offer without having done so, many lenders will be suspending mortgage applications for the time being.
If you are still eager to get the ball rolling, you can liaise with estate agents and conveyancers to prepare the ground for a future sale. Conveyancers can explain to you the information that needs to be provided to a purchaser and can carry out a basic check at the Land Registry to identify any potential legal title issues which could otherwise hold up a transaction. If any issues are apparent, these can be investigated and steps taken in advance of marketing the property which should smooth the way for a future sale. In a small minority of cases, defects on the title which a seller may be unaware of when they begin marketing a property can jeopardise a sale. It could be well worthwhile checking your title and resolving any issues in advance of marketing.
I am thinking of buying, what should I do?
You may experience practical difficulties with attempting to purchase a property at present. Under the current restrictions, it would not be possible to attend a viewing of a property or have a survey carried out and you may also experience difficulty in obtaining a mortgage offer from a lender.
Whichever stage of the transaction you are at, or whatever your decision about your imminent sale or purchase, you should assess all of the risks involved and make sure that you are happy to proceed.
What other support is available?
Official Government guidance can be found here https://www.gov.uk/guidance/government-advice-on-home-moving-during-the-coronavirus-covid-19-outbreak
The situation is constantly changing and the Government may bring in further guidance in due course. However, this post represents our best interpretation of HM Government’s guidance, where applicable, at the time of our writing. Both the content of the post and any guidance it is based upon will be subject to change.