As property lawyers we spend a great deal of time ensuring that when contracts are exchanged, it is on clear precise terms and all parties know exactly what they need to do to make sure completion takes place by a specified time and date. If either party defaults on the terms on the contract, then damages can be awarded and in some circumstances the deposit forfeited.
On Thursday night, the housing market was effectively suspended by the government. Ministers issued official guidance telling people in the early stages of buying or selling their home to delay transactions.
For those who had already exchanged contracts they found themselves faced with a legal dilemma as they approach now unattainable completion dates. Contractually, they are bound to complete, or they will get sued. Whilst many are able to provide funds to complete, they couldn’t physically move because removal companies are refusing to work. It is no surprise that many parties feel incredibly frustrated as they face the likelihood of breaching their contracts in an unprecedented scenario totally outside their control. The requirement for certainty was thrown into turmoil.
The only comfort we could offer our clients was that everyone was in the same boat and that all conveyancers were doing everything they could to help. One thing this lockdown has shown is how all parties are keen to work together to find workable solutions that do not involve imposing sanctions.
The Law Society has implemented guidance to ensure we can incorporate terms into the contracts which allow flexibility to facilitate conveyancing transactions during this lockdown and the link to this guidance is attached: https://www.lawsociety.org.uk/topics/coronavirus/
For property owners who were due to market their properties, they will have no option but to put this on hold. Visitors are not allowed into properties, including estate agents, surveyors and potential buyers. Restrictions on people’s movements mean that homes cannot be valued by surveyors in person.
There is speculation that the coronavirus will cause a drop-in property prices and as such it would appear that some of biggest lenders have stopped offering loans to those purchasers with smaller deposits and the self-employed. Buy-to-let mortgages have also been affected.
Only time will tell what impact this shut down will have on the property market, but we have many eager clients who are desperate to resume their transactions at the first available opportunity. As conveyancers, we will do everything we can to assist them.
Lisa Youden, Residential conveyancing department
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