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What does Covid-19 mean for our conveyancing transactions?

Here at Mayo Wynne Baxter, our conveyancing team are doing all that we can to ensure that we keep things moving along as smoothly as possible. Our specialised teams are geared up to work remotely and business is running as usual, with normal running hours in order to continue to provide our clients with the minimum amount of disruption.

Working remotely means that we will be progressing transactions by phone, email and where available, video link or call where ordinarily we would be having a meeting in person. Our overall approach as a firm is to follow the guidance issued by Public Health England and Wales. The health of individuals and the public is the priority and as conveyancers, we will be keeping up to date with guidance as it evolves and changes with health advice and government policy in this public health emergency.

COVID-19 and the risks posed in conveyancing transactions

All conveyancing transactions are now subject to government advice on home moving.  The Law Society has issued a press release following issues that have been raised amongst the profession as follows:

  • Requests for properties to be decontaminated
  • Refusal to vacate on completion because the Seller is in isolation
  • Failure of disruption to parts of the banking system (such as CHAPS)
  • Inability to obtain search results if people are not available to carry out the searches
  • Reluctance on the part of the removal company employees to enter properties
  • Difficulties in obtaining witnesses
  • Issues in mortgage lending surveys physical valuation

At present the government has made a clear direction on the following (and police emergency powers are disapplied only for critical home moves): 

  1. Home moves into occupied properties should only take place where contracts have already been exchanged, and where it has proved impossible for the parties involved to agree a deferral. 
  1. Moves into unoccupied properties may continue, however the move must take account of the Public Health England and Public Health Wales guidance. 
  1. Moves should only occur during the restrictions if your move is critical and it is safe to do so, for example, where the property is empty. If the empty property is in a chain, it may not be possible to complete without breaking the chain.

The advice is that you should complete a deep clean if you are moving to a new home and follow the advice given for decontamination of your new home especially if you have reason to believe the previous occupants may have, or have been in contact with, coronavirus.

Conveyancing transactions may fall into any one of the following scenarios:

You have exchanged and need to amend an existing contract

If you have exchanged and if all parties have agreed to defer the completion date, in order to remain compliant with s.2 of the Law of Property (Miscellaneous Provisions) Act 1989, solicitors should exchange a written agreement to vary the contract.  The parties can “electronically e-sign the agreement” to vary the existing contract or authorise their solicitor to sign as agent on their behalf.  A new contract will not be taking place, only a variation to the existing one.  Since the original document cannot be sent to the solicitors on the other side, undertakings will need to be varied to confirm that the original document will be sent when the coronavirus COVID-19 restrictions are lifted.

You have already exchanged contracts

If you have indeed already exchanged contracts then you will need your solicitor to arrange for the transaction to be deferred.  If there is a chain, then you may need to liaise with your estate agent to get this agreed with the various parties.  Delaying it may not be that easy, especially if the government extend their restrictions on lock-down.  

Any sub-agreement should include the provision that once the restrictions are lifted, there will be a period of time agreed before you complete to enable everyone to get ready for the move.  This will need to a realistic timescale in order to arrange all that you will need like removals.  The process may be further complicated if you have a mortgage and therefore your solicitor will need to ensure that written confirmation from your lender is obtained as to an extension to the mortgage.  There are serious considerations to be alerted to however in this “deferral” time frame, such as mortgage considerations, sickness of someone in the chain or worse, death.

Special considerations to those of you who have mortgages pending

If your circumstances change in the time between exchange and completion, and in this time you lose your job and no longer can afford the mortgage, this will be something that will need to be reported to your lender.  A further consideration is the property value. In this time of “deferral” the property may have declined in value and impacted the lender’s ability to lend.

If you have a Mortgage, lenders are agreeing to extend their offers for three months and you will need to confirm this by contacting your lender.

Any delays will have a knock-on effect on your searches and since your normal obligations will apply to the lender and clients may need to consider the expiry of searches and whether these will need to be refreshed and the costs involved.

If you have not yet exchanged contracts

Not all is lost – the transaction can continue to progress however, take time to consider carefully the ramifications of instructing your solicitor to exchange contracts.   Issues may arise in between exchange and completion and the contract will continue to be binding.  If you are looking to exchange, then you must ensure that a suitable clause is incorporated into the contract to account for all the potential risks.