COVID-19 & Property Transactions – Frequently Asked Questions

As many of us adjust into our new lives in isolation, and working from home, it is becoming more clear that the ‘projects’ we may have started before the coronavirus crisis, now come with new and unexpected challenges.

This article will set out tips and guidance about what the options are if you had started the process of buying or selling a property. You should take the advice of your solicitor before making a decision.

A - “I am in the process of buying/selling a property. Should I continue to provide instructions to my solicitor?”

Given current circumstances and Government guidance, you need to think carefully about whether now is the right time to continue with a sale or a purchase. Is it more appropriate to pause, and continue when further advice about movement and the lockdown is given by the Government and the future is clearer?

Some people are agreeing to keep the chain together, to carry out all pre-contract work and then wait until it is possible to proceed.

Here are a few things to consider when making your decision:

1. Will the sale or purchase require you to move home?
2. Will the sale or purchase require you to have assistance from a removals company?
3. If you are purchasing a buy-to-let with the assistance of a mortgage, can you afford to keep up payments in the event that you are unable to let the property?

You will need to carefully consider your individual circumstances when answering the above questions.

For example, it might be the case that you are a first time buyer, and are living with relatives. You might be buying an investment property and did not intend to have tenants renting the property until you made renovations. Perhaps you are selling an investment property for personal reasons. These examples might mean you still wish to proceed and can do so.

B - “I was just about to exchange contracts. What can I do?”

If buying a property that you are going to move into, remember, the government has given guidance https://www.gov.uk/guidance/government-advice-on-home-moving-during-the-coronavirus-covid-19-outbreak.

Home moves into occupied properties should only take place where contracts have already been exchanged, however, moves into unoccupied properties may continue, subject to the government’s main advice on social distancing.

If you were planning on moving into an unoccupied property, ask yourself:

1. Will I need to arrange for a removals company to transport my personal items?
2. Will I need to go shopping to buy basic furniture?
3. Will I need to use public transport to get to my new home?

If you do think that it is possible for you to safely buy or sell a property, then a simultaneous exchange and completion should be considered.

This is where you and the other party exchange contracts and complete on the same day at the same time. You would both aim for a date to do this, and on that day, decide whether such an exchange and completion is the appropriate course of action.

A simultaneous exchange and completion will allow for the parties involved to review the government advice alongside their personal circumstances day by day, and make decisions along the way.

However, deciding to complete a simultaneous exchange and completion should be carefully considered beforehand, and please note:

1. Where there is a chain, all of the parties must agree. If one party changes their mind you cannot complete.
2. Without a clearly set completion date, there is a risk of something going wrong on a particular day, and this means time spent getting ready to exchange and complete could be wasted. In the current circumstances, advice is regularly updated, and this might affect the proposed date.
3. Think about practical matters – removal companies will need to diarise your completion date for their own logistical needs. If completion is unable to take place on the proposed date, removers may be unable to return your deposit back to you.

C - “I have exchanged contracts and am due to complete soon. What happens now?”

If you find yourself in this situation, you must talk to your solicitor straight away.

Again, you should ask yourself the above questions (set out at both sections A and B) to see whether it will actually be possible to complete, and whether you will be able to continue to follow the government’s advice.

You should try to agree an appropriate deferral date, and only proceed to completion if deferring completion is impossible.

If all the parties are able to agree a deferred completion date, a written agreement varying the contract should be exchanged. This agreement must make clear that there is not an intention to create a new contract, but simply an intention to vary the existing contract.

If deferring completion is impossible, and parties have to move during the stay-at-home period, you must make every effort to follow the advice from Public Health England and Public Health Wales on social distancing and must not endanger yourself or others during your move.

More than ever, keeping up contact with your solicitor is vital in the current circumstances. Be sure to answer the above questions honestly, and carefully think about the practicalities and government advice.

If you have any concerns about a property transaction, please do not hesitate to contact our team on 01707 329333.