We have been inundated with questions from anxious clients concerned by headlines in major UK newspapers announcing “Don’t Move Home” and “Virus prompts No. 10 to suspend housing market”. Similarly, estate agents and other solicitors have been seeking assurances from us that our clients are still proceeding with their purchases.
The purpose of this note is to clarify that there is no ban on house moves. The Government’s advice confirms that “…there is no need to pull out of transactions, but we all need to ensure we are following guidance to stay at home and away from others…”.
To summarise some of the key points for clients who have already agreed a sale or purchase:
Where the property is unoccupied, the transaction can continue. Conveyancers are asked to continue to support the sales of unoccupied properties as far as possible.
Where the property is currently occupied, and exchange of contracts has not yet taken place, it is recommended that the parties agree to delay the exchange of contracts until after the stay-at-home period, or include contractual terms to take account of the risks associated with the virus.
Where the property is currently occupied and exchange of contracts has taken place, the parties are encouraged to agree an alternative date for completion for a time when the stay-at-home measures will no longer be in place. In the event that a new date cannot be agreed, there is an exemption from the new emergency enforcement powers for critical home moves. The parties should follow advice on staying away from others to minimise the spread of the virus.
In respect of the second scenario, another option to avoid the associated risks is to agree a simultaneous exchange and completion, and this is the advice we have been providing to a large number of our clients.
The risk is that if a client has exchanged with a fixed completion date in the future (say 2 weeks following exchange), and completion is delayed due to an issue relating to the crisis, they could be in breach of contract (unless contractual provision is made to allow for completion being delayed: we have been advising our clients on specific contractual clauses to offer some protection in this regard).
Current issues we are seeing include the availability of removal companies and delays by mortgage lenders in providing mortgage funds and their lack of responsiveness due to staff shortages.
With a simultaneous exchange and completion, the parties would not exchange contracts (with a completion date being that same day) until the mortgage funds have arrived and until they are sure they have removal companies in place, thereby avoiding a potential breach of contract or the need to agree special contractual clauses.
For clients who are only at the start of their transaction, surveys and valuations are currently not permitted, and so this will of course delay matters. But the legal paperwork can be progressed as far as possible in the mean time, if the client chooses.
Whether you are an existing client, have been thinking of selling or buying a property, or currently have a property on the market, please do not hesitate to contact a member of the Residential Property team and we will be pleased to discuss with you how we can help.
Related Expertise
