Buying and Selling Property during the COVID-19 Lockdown
The COVID-19 outbreak is having an impact on the property market and if you are part way through a transaction or are considering buying or selling in the near future, we have collated some information that you may find useful.
Following the Prime Minister’s ‘stay at home’ announcement on 23rd March, both the Government and the Law Society (the independent professional body for solicitors in England and Wales) have issued guidance to those who are in private residential conveyancing transactions.
The current advice for homebuyers and renters is to delay moving to a new property whilst the emergency COVID-19 measures are in place. Those who are not already in a transaction should not enter into one and those who are and are able to mutually agree to delay things, should do so. All parties should work together to achieve this.
Mortgage lenders have agreed to extend offers by up to 3 months, for those who have already exchanged contracts, to enable people to delay moving whilst retaining the security of their mortgage offer.
The government have advised that (if all parties are able to) transactions involving unoccupied properties can proceed as normal, so long as social distancing is adhered to during the physical move. If the property is occupied, you should consider Public Health England’s guidance for households that may have had a COVID-19 infection by visiting https://www.gov.uk/government/publications/covid-19-stay-at-home-guidance/stay-at-home-guidance-for-households-with-possible-coronavirus-covid-19-infection
If moving is unavoidable – perhaps you have already exchanged contracts and have a completion date in the near future – the government has advised that ‘critical home moves’ can take place. Such moves are exempt from the new emergency enforcement powers given to police during the COVID-19 outbreak. If you are going to move during this time, you must ensure you continue to observe social distancing requirements.
If you have exchanged contracts and you do not meet the agreed upon completion date, you would be in breach of contract and could be liable for financial costs (you could forfeit your deposit if you are buying and could be required to pay removals fees, mortgage interest etc if you are selling). Therefore, if you suspect you will not be able to meet your completion date, it is imperative you discuss this with your lawyer as early as possible so that a delay or some other alternative can be negotiated.
Even after contracts have been exchanged, it is possible to amend the contract (by way of a supplemental agreement, which your lawyer will draft), to decide on, perhaps a new completion date and for those who have not yet exchanged it is possible that the contract for sale will need to be drafted in a way that covers the disruption caused by COVID-19 and potential future government restrictions.
We understand that the stress of buying and/or selling a property, combined with the anxiety and unknowns surrounding COVID-19 is making the conveyancing process very nerve-wracking and we will do our best to answer your questions and guide you through the coming weeks and months.
This situation is unprecedented and the above guidance is liable to regular change so do continue to check our website for the latest advice. You can also view current advice at https://www.gov.uk/guidance/government-advice-on-home-moving-during-the-coronavirus-covid-19-outbreak and https://www.lawsociety.org.uk/support-services/advice/articles/covid-19-and-residential-conveyancing-transactions/
This reflects the law at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought as appropriate in relation to a particular matter.
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We are solicitors in Camberley, Wokingham and London. In 2019, Herrington Carmichael won ‘Property Law Firm of the Year’ at the Thames Valley Business Magazines Property Awards, ‘Best Medium Sized Business’ at the Surrey Heath Business Awards and we were named IR Global’s ‘Member of the Year’. We are ranked as a Leading Firm 2020 by Legal 500 and Alistair McArthur is ranked in Chambers 2020.