In these uncertain and unprecedented times, there are many questions that buyers and sellers of residential properties may have.
As the situation is ever-changing, there is, unfortunately, no set of crystal-clear answers, however here is our advice on how to proceed.
There have been a range of issues that have arisen as a result of COVID-19 and worried buyers and sellers including:
- Requests for properties to be decontaminated before completion
- The effect of failure/disruption in the banking system
- Mortgage lending facilities and valuations
- Difficulty in obtaining witnesses to sign deeds
- Inability for searches to be carried out as people may not be available
- Refusal to vacate a property on completion due to isolation.
Who is Responsible in Such Circumstances?
First and foremost, at Nockolds, we are reviewing each issue on a case-by-case basis rather than applying a blanket policy. We are reviewing existing contracts and testing what the position is, in respect of different situations.
Some drafting suggestions have been sensible, however, some go beyond what would ordinarily be included, and may inadvertently impede other aspects of the contract. Therefore, depending on the bespoke clauses requested by clients, we are advising them appropriately of what would be best for their situation.
Before Exchange of Contracts
There is a distinction between transaction where known cases of COVID-19 are present, compared to those where it is merely a possibility.
At Nockolds, we are operating on a policy of ‘business as usual’ as far as is practicable given the circumstances, and we are advising clients on their individual needs.
After Exchange of Contracts
If completion does not take place once contracts have been exchanged on the basis of COVID-19, then the parties not completing would be deemed to be in default.
In such an event, the general provisions of the contract relating to default will apply. However, the non-defaulting party, may decide to take a ‘good faith’ view on the default in light of current circumstances, but is under no obligation to do so.
However, some form of penalty may still be applicable if the transaction forms part of a chain of transactions.
With this in mind, one cannot say with a degree of certainty what the next course of action will be. However, for now it is ‘business as usual’ and we are working with our loyal clients to ensure we provide them with the best possible advice and service in these difficult times.
If you have any questions please contact our Residential Property Team on 0345 646 0406 or fill in our online enquiry form and a member of the Team will be in touch.