Please note: The information included in this article is correct as of 25/03/2020 but as the COVID-19 situation continues to develop, government guidelines may change. As a result, we would always advise you speak with a solicitor for up to date advice, specific to your circumstances.
Whilst the property market slows down during the COVID-19 period, some investors may see this as the perfect time to pick up a bargain. Unfortunately, Michael Gove has today advised prospective purchasers not to exchange on a purchase and it is understood that lenders are placing new finance applications on hold. There is, however, a way to secure a property without exchange or without your lending application having been approved.
By placing a Call Option over a property, a buyer would be able to exercise their option on the property for a set price once the restrictions on movement have been lifted and lenders have resumed normal service.
All of the legal work in respect of the title of the property would have been carried out before the Option Agreement was entered into and therefore this would mean that you would be able to move quickly to finalise the purchase, at the previously agreed purchase price, when you were ready to do so.
Equally, if you were keen to secure a premises to rent but were unable to take occupation during this uncertain time, an Agreement for Lease could be drafted to preserve your interest and prevent the landlord from finding another tenant. Like an Option, an Agreement for Lease is a contract which ties both parties in and means that the lease must be entered into once certain events are triggered. Usually this is once building works have been done, or planning permission has been granted, however in this case an appropriate clause could be put in place for when restrictions on movement are lifted.
For advice on buying or leasing property during the COVID-19 outbreak, get in touch with our commercial property solicitors by email or call 0845 287 0939.