Effects of Coronavirus on property sales/purchases
Moving house is stressful enough when the world is functioning ‘normally’. Moving house when the world has been turned upside down is another thing altogether. Recent guidance has signalled a desire by the Government to allow buyers and sellers to get on and move if they want. Especially with the temporary measure allowing homebuyers to not pay stamp duty on the first £500,000 of a property purchase price. This will be in effect until 31 March 2021, and will allow even those that have exchanged but not completed before 8 July 2020 to benefit.
While every transaction is different, it will generally take 2-3 months from the date a buyer is found to the buyer getting the keys, i.e. completion. Taking into account that lead-in time, there is logic in sellers still trying to get their house sales tied up now, and we continue to be instructed on new deals. However, there are a number of practical issues for you to consider.
I have exchanged contracts; can I refuse to complete due to coronavirus?
The standard conditions of sale do not include any provisions to assist a seller or buyer in this scenario. If either the seller refuses to vacate the property and complete, or the buyer refuses to complete, perhaps citing the lack of removal companies available to assist with a move, such party would be in breach of contract and liable to the other party for damages. The buyer would also forfeit any deposit paid if the buyer failed to complete within the required timeframe (10 working days from when a notice to complete is served by the seller’s conveyancer, which can usually only be served after 2pm on the completion date).
Read our latest insight on what to do if you have exchanged contracts but you, or another party, want to halt due to Coronavirus.
If the estate agents are closed, how do I collect the keys at completion?
Speaking with a number of local agents with whom we work closely, a common suggestion is for the agent to deliver the keys in person to the property once the seller’s solicitors have received the completion monies. This would be done at an appropriate distance. We would strongly recommend that all buyers and sellers speak with the estate agent to their proposed transaction to check the agents or seller will be available to deliver keys, be it in person or through a key safe.
Should I exchange contracts?
There are no legal restrictions preventing you from exchanging if all parties wish to do so. A key obstacle had been the unavailability of removal companies, but the majority of companies are now back up and running, and offering a full service (including home packing), so that hurdle no longer exists.
If the parties wish to have more than, say, two weeks between exchange and completion, it might be appropriate to include contract clauses allowing the completion date to be set back if either party contracts coronavirus before completion. This would be particularly relevant where one of the parties (or a family member living at the property) is within a certain risk category for example, underlying health conditions.
I am thinking about selling - can I?
Absolutely. The updated May guidance allows agents to visit in order to take photos / videos of your property.
Physical viewings are no longer restricted, although there is detailed guidance about the conduct of those viewings, for example no open house viewings are permitted and you should vacate the property while a viewing takes place.
I am thinking of buying – can I?
You certainly can and we have seen an increase in demand following the Government’s May guidance. There are some important points we would flag:
- Physical property viewings cannot involve members of more than one household. Therefore a couple living in separate homes but buying together could not both view the property at the same time.
- Consider asking the seller if they will arrange a deep clean of the property if you or your family fall into a vulnerable catagory.
- Surveyors are allowed access to carry out a survey. This is always money well spent and there are no limits on the types of surveys permitted at this present time.
Will solicitors and agents co-operate?
Many law firms, including Tozers, are accredited under the Law Society’s conveyancing accreditation scheme. The scheme requires all members to act with courtesy to one another and to co-operate with third parties.
The current situation will require all parties to co-operate in trying to achieve an outcome that is best for all concerned, rather than focusing on who might have the appropriate contractual remedy. Tozers has an excellent working relationship with competitor firms and local agents. Subject to client instructions, we will try and come up with pragmatic solutions to ensure that disruptions to house moves during this time are kept to a minimum. We have already worked with other parties in varying completion dates in exchanged matters, to bring completion forward where that suited the parties.
For the latest advice and updates from the Government visit their property guidance page.
How can Tozers help?
Last updated on 05/06/2020