Statement on Conveyancing transaction following COVID-19 guidance from the Government and Law Society

“Prioritising the health of individuals and the public must be the priority”

The government has made clear an overall direction of travel. Home moves into occupied properties should only take place where contracts have already been exchanged and it has proved impossible for the parties involved to agree a deferral.

We will be advising you to agree an appropriate deferral and only advising you to proceed if that has proved impossible.

Moves into unoccupied properties may continue, subject to the points below.

When moves occur, they must do so in a way which takes account of the guidance currently in force from Public Health England and Public Health Wales.
The response to the coronavirus epidemic is, and will continue to be, fast changing.

It is not possible for this guidance to cover every eventuality, despite our best endeavours.

Amending existing contracts

As always, every case should be treated on an individual basis and any clauses or processes suggested should be amended and tailored to those individual needs.
Once all parties have agreed to defer the completion date, we should exchange a written agreement to vary the contract.
To avoid contamination through a physical document, the parties will need to either e-sign the agreement to vary the existing contract or authorise their conveyancer to sign as agent on their behalf.
This will require a formal exchange process. There is not an intention to create a new contract; only an intention to vary the existing contract.
Before exchange of the agreement effecting the deferred completion date, we will ensure you understand the benefits and risks and are advised in accordance with your own circumstances.

Mortgages

While generally lenders have agreed to extend the mortgage instructions for three months it will be necessary for us to obtain individual instructions from your lender as to whether this has been agreed before we can proceed beyond the Mortgage Offer expiry date quoted on your offer.

Advice for clients who have already exchanged contracts

Agree either directly or through your estate agent that your transaction can be deferred.

It’s a good idea to have a two-step process so that you delay the move until the end of the current stay-at-home period and the requirements about physical distancing, but with the ability to extend that timescale if the government restrictions are extended.

The clause should state that once the restrictions end there will be a period of time agreed before you move to enable everyone to get ready for the move. This might be one or two weeks. Make sure the timescale will give you enough time to find removals and arrange your move especially in circumstances where there is likely to be an increased demand for these services.

There’s a formal process required to effect a deferral of a completion date which will involve us exchanging agreements on your behalf with the other party to confirm the new arrangements.

If you are buying a property with a mortgage you should check whether you will need written confirmation from your lender to this extension. (Lenders generally have agreed to extend mortgage offers by three months).

Consider what would happen if your circumstances change during this period, for example, would you still be able to afford the mortgage if you lost your job and had to find new employment?

You should also consider that property values will fluctuate during the period of deferral and this might impact your lender’s ability to lend. This will be particularly important if your mortgage makes up a large proportion of the house price, perhaps 60% or over.

If you are both buying and selling, bear in mind that if your own buyer or seller’s circumstances change, and they need a mortgage, they may not be financially able to proceed with your transaction at the end of the restrictions.

You should also bear in mind that even when the restrictions are removed there may be other unavoidable delays in your move, perhaps if someone in the chain has died and their estate needs to be settled before the move can be completed. In that case you could agree a further delay or seek to end the contract.

Advice for clients who have not yet exchanged contracts

You can still continue with your transaction and should take this time to work with us to progress the transaction and to read through the documents involved in moving house. We will continue to progress the legal aspects so far as we are able to and keep you updated in the usual way. There is still plenty that can be done at this time to allow us to progress quickly when these sanctions are lifted.

You should think very carefully before instructing us to exchange contracts, even where completion is a long way off, as the contract will be binding, and you would have to complete even if your financial position had changed.

Our current advice is that we are not suggesting exchange of Contracts takes place at this time. If you choose to go against this advice, we will expect you to sign a waiver for our files.

Advice for clients who have to move during the stay-at-home period and the requirements about physical distancing

You should only move during the restrictions if your move is critical and it is safe to do so, for example, where the property is empty. If the empty property is in a chain, it may not be possible to complete without breaking the chain.
You must follow advice from Public Health England and Public Health Wales on social distancing and must not endanger yourself or others during your move.
You should complete a deep clean if you are moving to a new home and must follow the advice given for decontamination of your new home https://www.gov.uk/government/publications/covid-19-decontamination-in-non-healthcare-settings/covid-19-decontamination-in-non-healthcare-settings if you know, or have reason to believe, that the previous occupants, or someone which they had been in contact with, has coronavirus.

Please do get in touch with us if you have any queries or concerns at this time. #staysafe #stayathome