Support, Advice and Experience within the Property Market

Buying and Selling During Coronavirus

From Robert Ulph on May 18, 2020

I have written about the implications that Coronavirus is having on tenants and landlords from financial uncertainty to the practicalities of carrying out repairs, but what about for those selling or buying?

The Government’s general guidance is to “agree alternative dates to move to a time when is likely that stay-at-home measures will no longer be in place” – this doesn’t mean that the transaction needs to come to a stop, however.

The current advice is that for those who are pre-exchange and the property is unoccupied, the transaction can continue as normal. With an occupied property, at the pre-exchange stage, there are two options. The first is that all parties work together to delay the exchange of contracts until after this stay-at-home period.

The second option is that explicit provisions which take into account the risks presented by Coronavirus are included in contracts. This second option is obviously much more complex and it is essential that you seek professional legal advice on how best to proceed. Additional clauses would need to address such factors as reduction in salary or loss of jobs, family quarantine and health of all those involved.

There is currently no standard clause taking into consideration the many impacts the virus may have. Until ‘tested in court’ no one knows what the correct clause consists of and lawyers are cautious of inputting incorrect information into the clause, so this can delay the exchange of contracts.

If an exchange of contracts has already taken place, breaches of contract still apply in England unlike other countries that have put a freeze on them, and large penalties will still be imposed if these obligations are not met.

As with the above, if the property is unoccupied then the transaction can continue through to completion as usual. It is essential, however, to check and follow the guidance on home removals and what companies can and can’t do during this time, and what is expected of those moving.

In an occupied property where contracts have been exchanged, the buyers and sellers must agree their options and the original contract will be amended. The first of two options – and the ideal one – is that both parties would be put back largely in the position that they were in before contracts were exchanged. This means that the deposit monies would be returned in full and neither party would have any claim against the other.

The second option, if one or both parties want to proceed is to consider agreeing a variation to the contract so that the completion date is deferred to a time when it is possible and safe to proceed.

As always, if you have any concerns or questions on this or require any advice on any other property related matters, please do not hesitate to contact me as I am always happy to help.

In the meantime, I wish you all the best to stay safe and well.