The Impact of COVID19 on Property TransactionsApril 15th 2020
Jonathan Carroll, Director and Head of Property & Agriculture helpfully explains the potential effects of #COVID19 on property transactions.
For those buying or selling property, or who are already committed to a move, the COVID19 pandemic has brought some challenges. Fortunately, with good legal advice and a bit of common sense from the parties most of those challenges can be managed.
“It’s important to stress that you need to follow Government guidance, and that will change –do check the latest rules and guidance, both to avoid breaking the law and to keep yourself and others safe,” according to Jonathan Carroll, Director and Head of Property and Agriculture at Cartmell Shepherd. “Most home moves will have to be put on hold, but under current guidance home moves can still take place to unoccupied property.”
For commercial and agricultural premises, the restrictions may be of less concern because it is common for buyers to move in a few days or weeks later, by which time any contamination issues may have gone away, and because travel to one workplace may be no more risky than travel to another.
However, all buyers and sellers should be aware that a transaction may face trouble because of events or restrictions linked to COVID19: one of the parties could be unable to sign documents or to move on the due date; banks could operate slowly so that funds don’t arrive; valuers and surveyors may be unable to visit a property; parties may, sadly, die during the course of the transaction. A huge range of problems could crop up.
For those transactions that look like they can still proceed within the rules, there are a couple of obvious options if exchange of contracts has not yet happened– completing on the same day as exchange of contracts to remove the risk, or including clauses in the contract to allow for delay in case something goes wrong before completion. Those have their own advantages and disadvantages, but one or the other may well be suitable. Your solicitor can advise you on which might work for you.
However, a buyer may be risking their 10% deposit if they simply exchange contracts without that advice, and both seller and buyer would risk paying heavy daily rates of interest if they had to delay completion for reasons outside their control. That’s where good legal advice comes in.
Those who have already exchanged contracts, or who have bought at auction, may not have those options. In those circumstances the parties need to agree what will happen. Variations to the contract to allow for delayed completion can be made with a bit of good will from those involved. However, the pitfalls are much greater for those in this position and legal advice is essential. If a deal cannot be reached, those involved need to speak to a solicitor quickly to assess what they can do.
Ultimately, we can resolve the issues for those transactions that can proceed. For those that have to be delayed, only time will tell if chains can be kept intact until the restrictions end. Until then, getting good advice and keeping a cool head are the only things you can do.
We have a team of experienced property law Solicitors who are here to help you. If you have any questions relating to the above or need any advice please contact the team on 01228 516666 or click here to send an email.