Conveyancing FAQs

This page contains answers to conveyancing faqs we have received, mainly around house sales and purchases following the Coronavirus outbreak.

What happens if I am supposed to exchange and complete during lockdown?

The most recent guidance there is from The Law Society was on 29th March. It states that if you are going to move into an unoccupied house and you have an agreed completion date, then you can continue and go ahead and do that as long as it is all done and in accordance with the Public Health England, social distancing and so on.

This means it’s possible to move, however you will of course face practical difficulties. Whilst not all, most removal companies are not working at the moment, so you would likely need to organise the logistics of the move yourself.

You will face more complicated issues where the house is occupied; the current advice on that is that you should try and defer the completion. There will be an agreement and completion date if that’s looming then a buyer should get in touch with the seller or their agent and try to defer the completion until or after the lockdown has been lifted.

So far we have seen clients be very realistic about their situations and everybody involved is looking to be as helpful as possible in agreeing to defer completion dates.

What if my house move is essential?

The Police Emergency powers don’t apply if it is a critical home move. If you have got to move because otherwise you are going to be homeless for example, it’s perfectly fine to continue.

I exchanged contracts on my house purchase but my financial circumstances have now changed before completion. What happens?

Unless the contract you have entered into with the other party specifically provides for a change in financial circumstances prior to completion, which can be the case with some new build residential contracts subject to Help to Buy loans, you may find yourself in breach of contract should you be unable to complete.

The Standard Conditions of Sale (Fifth Edition) which govern residential sale contracts have no specific frustration clause included in these to deal with not being able to fulfil obligations under a contract due to a force majeure (a major incident outside of your control). However the Doctrine of Frustration dictates that a party cannot be held liable for non performance of obligations under a contract where an act of force majeure has occurred making it impossible for said party to comply with their obligations. Therefore technically if we were served notice to complete for failure to complete we could argue that under the Doctrine of Frustration principals this wouldn’t be valid. However this would be a matter that would likely to proceed to arbitration should a resolution not be reached between the parties.

If you fail to complete on the completion date and no other remedy is available, you will find yourself liable for interest on the balance of monies outstanding under the contract calculated at a daily rate until such time as completion takes place. Once notice to complete is served, a further 10 working days is given for completion to take place subject to the payment of interest occurring on the balance of funds. In addition, you will be liable to pay the other party’s legal fees for service of the notice and any additional costs and expenses incurred as a result of completion not taking place. If after the expiration of 10 working days completion is not achieved, you will forfeit the deposit paid on exchange (and if less than 10% of the purchase price be liable to make this up to the full 10%). In addition, should the seller resell the property at a lesser value to the original price agreed then you can find yourself liable for the difference between the old sale price and the new sale price by way of compensation to the seller.

It may be possible to agree with the other party to a supplemental deed of variation to vary the original terms of the contract to allow for an extension of the original completion date and additional provisions should matters be delayed beyond your control due to COVID-19. This would be subject to negotiation between the parties.

We are at the present time advising clients that where exchange of contracts has not yet taken place, to either negotiate further conditions in the contract to provide for delays caused by COVID-19 or ultimately agree to a simultaneous exchange and completion on the same day to ensure that all parties are ready willing and able to complete prior to any form of legal commitment taking place.

I have exchanged contracts on a house I am buying but I cannot complete because of the lock down. What happens?

If you fail to complete on the completion date and no other remedy is available, you will find yourself liable for interest on the balance of monies outstanding under the contract calculated at a daily rate until such time as completion takes place. Once notice to complete is served, a further 10 working days is given for completion to take place subject to the payment of interest occurring on the balance of funds. In addition, you will be liable to pay the other party’s legal fees for service of the notice and any additional costs and expenses incurred as a result of completion not taking place. If after the expiration of 10 working days completion is not achieved, you will forfeit the deposit paid on exchange (and if less than 10% of the purchase price be liable to make this up to the full 10%). In addition, should the seller resell the property at a lesser value to the original price agreed then you can find yourself liable for the difference between the old sale price and the new sale price by way of compensation to the seller.

It may be possible to agree with the other party to a supplemental deed of variation to vary the original terms of the contract to allow for an extension of the original completion date and additional provisions should matters be delayed beyond your control due to COVID-19. This would be subject to negotiation between the parties.

I’m worried about mortgage arrears during Coronavirus, what can I do?

Contact your mortgage provider as lenders are granting three month repayment holidays to all homeowners who are up to date with their mortgage payments and this includes buy-to-let mortgages who are receiving less rent as a result of Coronavirus. Be aware that this doesn’t mean your mortgage amount will be reduced, it is likely that after a payment holiday the mortgage payments will increase or the term of the mortgage extended.

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