Please note: The most recent update to this information has been posted here.
We have recently had many clients asking what impact the current COVID-19 outbreak will have on their conveyancing transactions. Unfortunately, at this moment in time, it is extremely difficult to predict but on 16th March the Law Society Gazette published an article considering this, following the Law Society issuing some guidance on the issue on 13th March.
Please note: This advice is correct as of 20/03/20, but as the situation continues to evolve, the advice may change so we always advise you speak with a solicitor for specific advice on your situation.
The Law Society has identified some potential issues to be:
- requests for properties to be decontaminated;
- refusal to vacate on completion because the seller is in self-isolation;
- banking system disruption, such as CHAPS;
- removal companies being reluctant to enter properties; and
- difficulties obtaining witnesses or physical survey valuations.
The Law Society says there is unlikely to be any drafting solution that would be appropriate to every case and advises solicitors to “review…existing contracts and test what the position would be in certain situations on the basis of that contract”. They go on to say that whilst some clients may wish to negotiate new provisions to suit particular circumstances, they do not consider that bespoke clauses are necessary or desirable as standard.
The Law Society have also identified that there is a difference between transactions where COVID-19 is present and all other situations where it is merely a possibility, suggesting that “exchanging contracts on a ‘business as usual’ may be preferable to using new provisions but this should be assessed”.
Should completion not take place after contracts have been exchanged due to the virus, the Law Society says the parties not completing will still be in default. The contract provisions relating to default will apply unless the non-defaulting party takes a ‘good faith’ view. This may not be practicable though if the transaction forms part of a chain of transactions.
The Law Society have stated that “If chains are affected, the aim would be to provide the same solution and let the risk fall in the same place across the chain. Inevitably, there will be a few chains where one or more of the parties in a chain insists on taking a stand to gain an unfair advantage.” It is hoped though, that by focusing on the clients’ best interests and the public interest using pragmatism and common sense, issues arising from transactions involving Coronavirus can be dealt with without too much disruption to the usual process.
In addition to the Law Society’s guidance, we believe the most widespread impact of Coronavirus on the conveyancing process in general, will be the potential slowing down of the issuing of mortgage offers and search results as a result of staff illnesses or work-from-home policies. Again, it is hoped that by all parties taking into full consideration the impact of COVID-19 on the country as a whole, most transactions will continue to proceed with no more difficulty than would usually be encountered.
For so long as we are able to do so, Farleys will remain open advising clients during the developing situation. If you have any questions about your residential conveyancing during COVID-19, please do get in touch with the team on 0845 287 0939 or drop us an email.