The government has issued advice to both the public and the legal industry about residential property transactions during the coronavirus outbreak. The advice has consistently been that although there is no need to pull out of property transactions, people should work together with those in the chain to delay moving until the ‘stay at home’ measures are lifted.
There is specific government advice for each step of the moving process.
If your property is not yet on the market
Current ‘stay at home’ restrictions will make listing a new property on the market difficult. Estate agents’ offices are closed. They are unable to make house visits to provide property valuations. You are not able to invite unnecessary visitors into your home, making professional photos and floorplans difficult, and viewings impossible.
Our best advice is to use this time to prepare yourself for listing your property. Investigate which agent you might like to use, declutter and tidy your property, think about which fixtures and fittings you will take with you and collate information your solicitor will require such as building regs, FENSA certificates and electrical/gas compliance certificates.
If your property is currently for sale
You can continue to advertise your property as being for sale, but you cannot allow people in for viewings. You may be able to organise virtual viewings – it is best to discuss the pros and cons of these with your agent.
If you do receive an offer, you are fully within your rights to accept it. Do remember however that until exchange of contracts takes place, the offer is not binding and can be withdrawn at any point.
Once you have accepted an offer your transaction can begin to progress in the usual way. However please be aware there may be significant obstacles due to the current pandemic.
- Surveyors are not allowed to visit properties making home surveys impossible.
- Mortgage valuations may not be carried out which means that your mortgage offer may be delayed. Some mortgage lenders have stopped taking applications all together.
- Some local authorities are not able to complete the required searches while working from home which is causing delays in solicitor’s obtaining search results. Please be aware that if you require a mortgage is impossible for your solicitor to progress your transaction without these searches.
Please also consider that the current economic uncertainty may mean that buyers are not willing to commit to a house purchase, or a change in their circumstances such as being furloughed, pay cuts, or businesses collapsing may lead to their mortgage offer being withdrawn.
If you do get to the position of exchanging contacts, current advice allows you to continue with the transaction if the property is empty. However, if it is occupied the government recommends delaying exchange until after the stay-at-home measures have been lifted. If you do exchange contracts during this period, the contract should include explicit contractual provisions to take account of the risks presented by the virus, such as allowing for the completion date to be delayed in the event of the parties and members of their household being in self-isolation.
If you have already exchanged contracts
If you had already exchanged contracts prior to the current ‘stay at home’ measures and completion is planned for the coming weeks, government advice depends on whether the property is currently empty or not.
- You can proceed with the move if the property is empty, presuming you can secure the necessary removal services.
- You should look to delay completion if possible if the property is occupied.
What if a delay to completion goes beyond the terms of a mortgage offer?
The government has urged mortgage lenders to find ways to enable customers who have exchanged contracts to extend their mortgage offer for up to 3 months to enable them to move later.
If you cannot delay – is it legal to move now?
The government advice is that moving house should be delayed if possible. We recommend open and honest channels of communication with all stakeholder in the transaction to try to come to a mutually agreeable solution. However, the government does accept that there may be cases when you are contractually bound to complete, and postponement cannot be agreed.
- If you cannot come to an agreement, there is the possibility of a dispute which could result in court case to decide if either party is in breach of contract.
- If both parties wish to complete, they may proceed to do so. However, there are several practical issues to be taken into consideration including signing and witnessing of documentation whilst sticking to social distancing rules, delays to postal services, difficulties with banking and money transfers, shortage in removal services and the possibility of someone in the chain contracting coronavirus and needing to self-isolate.
Please be aware that all of our staff are currently working from home, and your solicitor needs to be in possession of all original documentation to complete a transaction – this is something to discuss with your solicitor to agree how it can be facilitated.
It is a challenging time for everyone in the property market. Our staff are doing whatever they can to continue to progress property transactions, within the boundaries of current government advice to keep them, their families and clients safe.
Joanne Ayrton is an experienced chartered legal executive and has recently joined FSM Solicitors’ Frome office. If you have any questions or concerns about your property transaction, please email email@example.com or get in touch with your closest FSM Solicitors office.