What is the impact of Covid-19 on Conveyancing Transactions?

Covid-19 can potentially impact conveyancing transactions in the following ways:

1. Purchasers request for properties to be decontaminated;
2. Sellers refuse to vacate on completion due to self-isolation;
3. Banking system disruption;
4. Booking removal companies or companies are reluctant to enter properties; and,
5. Difficulties obtaining witnesses or physical survey valuations.

The legal stance is if contracts have been exchanged and completion has been set for a later date, there will be a breach of contract if you are unable to vacate the property or complete the purchase on the set completion date. However, in light of the current and unexpected circumstances it is hoped that parties would take a ‘good faith’ approach and agree terms to get around this issue for example agree a contractual clause to account for a delayed completion.

If contracts have not been exchanged, the Government guidelines must be complied with. You do not need to pull out of the transaction but advised to follow the guidelines to stay at home and away from others. This does not mean that your transaction cannot continue, but it is likely to be delayed.

If the property you are buying is vacant, then you can proceed although you should check the position with your removals company.

Tips

Our Conveyancing team at Leicester and Loughborough are continuing to progress transactions as much as they can. Here are some tips to prepare yourselves in these circumstances.

1. Communicate

• Communication is key be it through the estate agents or solicitors. If you know that you will be unable to complete or will incur difficulties, tell us and the estate agents so we can try and help manage the situation so that both parties are aware of timescales and the practicality of the transaction going ahead
• If you or a family member is in self-isolation, you must inform us immediately so we can inform the other side solicitors and the chain of any potential delay.
• Ensure you have contacted any removal companies you have booked, to ensure they are still operating and they are able to assist with the house move on the day of completion.

2. Risk

The current guidance from the Government is to stay at home and delay transactions which have been exchanged and not to exchange those which have not.

3. Simultaneous Exchange and Completions

A Simultaneous exchange and completion can minimise the risk of a failed completion. This is when you exchange contracts and complete on the same day. We would suggest this is the most practical way to proceed once the Government guidelines indicate that we can proceed in the usual way.

4. Long completion dates

A long completion date may be suggested to allow the enough time to allow matters to resume as normal. The difficulty with this is that the current situation is unknown. Please note that mortgage offers may expire during this period and we will apply for extensions of offers as and when needed. We would look at this on a case by case basis.

5. Longstop Completion dates

Another option for completion can be suggesting a Longstop Completion date. A completion date is suggested where if completion does not take place by a certain date, then parties in the contract are able to come out the contract and not be legally tied into proceeding with the transaction and face penalties. Again, we would look at this on a case by case basis.

6. Act in Good Faith

Ultimately, this is a situation which is not in our control. The best advice we can give is to work together and act in good faith.  If contracts have been exchanged but you cannot complete, you might want to agree to waive any penalties in the contract if completion is delayed or offer to having the property deep cleaned for the new buyers.

We understand that this is an anxious time for us all. Be rest assured that Our Conveyancing team at Johnson Astills can assist you and provide you with further information regarding any conveyancing queries and continue to work during these uncertain times. Please contact us at our Leicester Office or Loughborough Office on 0116 2554855 or 01509 610312 or alternatively by email if you have any queries.