Will COVID-19 Affect your Property Sale or Purchase?
We have implemented certain procedures to ensure that our colleagues are able to continue to manage your transaction in the same way as they were previously whether they are in the office or are working from home:
1. We already had robust IT systems in place that can support our colleagues working from home. This means that your case won’t be delayed.
2.We had already invested in internet technology such as Office 365 and Skype, so that our colleagues can easily have virtual meetings with you and the other parties involved in your transaction, whenever they require and wherever they are.
3.We have been able to ensure that our colleagues can access your case files when they work from home, securely.
Risk of Failed or Delayed Completions
There can be significant financial penalties for a party who exchanges a contract for a house sale/purchase, with a specific completion date but then is unable to complete for whatever reason.
Currently there is a very real possibility that this may occur if you or another party in the chain contracted COVID-19 or where a party involved is a limited company ceases trading in light of the current circumstances.
We are aware that some law firms are suggesting additional clauses in a contract to protect you and the rest of the chain, however there is very limited evidence of these clauses being tested and we believe they may well lead to confusion and delayed transactions. Moreover for the clauses to be implemented every party involved in the chain would need to agree to the new clauses.
Currently, there is no ‘universally’ accepted specific wording for a ‘COVID-19 clause’, so we consider the most prudent method to protect you and your transaction(s) is to proceed with what is known as a simultaneous exchange and completion.
A simultaneous exchange and completion means that on the anticipated and agreed day that you and the chain want to complete (move), provided the entire chain are all ‘willing and able’ to complete, we would exchange contracts and complete on the same day (i.e. simultaneously). This enables the chain and your transaction(s) to proceed only if you and the entire chain are in a position to proceed. Some matters that may occur which will likely cause an issue with completion (please note that these are some examples of what may occur):
- A party contracting COVID-19 and being required to self-isolate (i.e. not be able to move out of their property).
- A mortgage lender withdrawing their propose mortgage offer prior to completion / mortgage company not operating.
- Solicitors / Conveyancers offices closing or being unavailable – without each party’s lawyer the transaction will not be able to complete.
- Potential issues with removal companies – before you confirm that you’re able to exchange and complete you will need to ensure that you have a method of removing / moving your belongings.
Currently, we consider that agreeing to a simultaneous exchange and completion ensures that the risks resulting in a breach of contract, as mentioned above, are minimised.
Rest assured we are continuing to work hard to ensure that your transaction proceeds as seamlessly as is possible during this difficult time.
What Do You Need To Do?
Simple, nothing. We will continue to progress your transaction(s) accordingly and will advise you to exchange and complete your transaction(s) on the same day.
If you have any further concerns or questions please do not hesitate to contact us.
Chris Maddison (Director & Solicitor)