The current outbreak of Coronavirus is having an impact on almost every aspect of our lives and the lives of our clients. In the property sector, thought is being given to adapting our usual procedures: the aim is to ensure that transactions can continue so far as possible in this period when working practices are changed and face to face contact is avoided.
The process of moving house is already considered to be a stressful process. With the additional uncertainty at present it is important to have a contingency plan and limit risk as far as possible.
It is advisable to consider now the potential risks that could affect you being able to complete a sale or purchase contract successfully. Speak to your adviser now to take appropriate advice so you can make a decision as to how to proceed.
It is advisable to hold back from exchanging contracts until you are sure that you are able to transfer the funds needed to complete the transaction. Check with your bank as to how this could be done. If you would usually go into a branch to arrange a transfer, this will be harder now and other measures may need to be considered, such as telephone banking or online banking. Most online banking facilities impose a daily limit so you may need a longer period to ensure you have enough time to transfer all monies you need in advance.
As a seller, you will usually be providing vacant possession under the terms of the contract. With current issues of self-isolation and lockdown, you will need to consider if this will still be possible. Consider whether and when you are able to arrange appropriate removals (as vacant possession also means that you must remove all your belongings from the property). With more people self-isolating or falling ill (and with restrictions on movement and businesses generally), this is likely to be increasingly problematic. Consider whether you are still able to make suitable arrangements and what the back-up plan is.
Handover of keys
Once a sale completes, one of the most important things for buyers is to ensure that they can collect the keys for the property. It would be a good idea to speak with your estate agent to ensure that they have measures in place, should their offices be closed or staff unwell, to facilitate the handover of keys. They should also consider how they are going to collect the keys from the sellers.
If it is not possible to collect the keys from the estate agent, it is still possible to agree with the sellers a method for handover (subject to the constraints of social distancing and the current lockdown advice). Again, it is essential to have this conversation in advance.
Signature and delivery of documents
Some of the important documentation needed in a sale or purchase transaction will need to be witnessed at the point of signature. This can cause problems as most people are working from home or self-isolating and we are all subject to increased restrictions on movement. Witnesses cannot be related to you so family members in your household cannot be used. Neighbours could do this for you, if they are happy to do so still, however, if you consider it difficult to find someone to witness your signature, you may wish to provide a power of attorney to your solicitor, who can then sign on your behalf any documentation needed for the transaction
Property transfer documents are still required to be delivered as original signed documents. There is nothing in place at present to allow for electronic signatures to be used. As such, you should continue to send original documents to your solicitor’s office, unless instructed otherwise.
Conveyancing and the probate process
We occasionally have to deal with the difficult situation of the death of one of the parties during the conveyancing process. There are often solutions to the issues raised here, depending on the circumstances of the transaction and we would be very happy to discuss these with you if you have any concerns but please note that death of a buyer or seller does not bring the contract to an end.
If you have not yet exchanged contracts, you could consider the possibility of a simultaneous exchange and completion. This would ensure that any quickly-implemented changes to Government guidance or policy could be considered and steps taken to adapt without either party being contractually bound to the transaction. If you have exchanged contracts already and are concerned about not being able to complete, you should take advice on the specific circumstances with your solicitor/conveyancer. They will be able to advise on the consequences of a delayed completion or failure to complete. In the current climate, you would hope that the sellers and buyers would work together to find appropriate solutions and, if necessary, amend clauses of the contract to enable completion to be extended.
Advice for those with mortgages
With the effect on businesses and employment during this uncertain period, the guidance for those providing home lending (“firms”) during the exceptional circumstances arising from the Coronavirus (COVID-19) is that they must treat their customers fairly and act in the best interest of their customers. Please be aware that the new guidance, from the Financial Conduct Authority (FCA), applies only in circumstances relating to COVID-19 and will be reviewed as the situation is updated. It is, currently, that firms should:
- Grant customers a payment holiday for a specified period, where they may experience payment difficulties as a result of COVID-19 and where they have indicated they wish to receive one, for example by providing information that the customer may potentially experience payment difficulties. If this is agreed, the firm permits the customer to make no payments for a specified period without being in payment shortfall. The specified period may be three months, but other options may be available.
- Ensure that there is no additional fee or charge, other than additional interest, as a result of the payment holiday.
- Any such payment holiday should not have a negative impact on the customer’s credit score.
Firms should not commence or continue repossession proceedings against customers at this time, particularly taking into account current advice on social distancing and self-isolation. Where a possession order has already been obtained, firms should refrain from enforcing it. Firms should also keep customers fully informed and discuss with them the potential consequential impacts of suspending any moves towards repossession.
We would advise you contact your mortgage provider if you have any concerns about mortgage repayments.
The commentary provides an overview of concerns the Real Estate team at Druces have considered. It should not be taken as legal advice. Individual advice should be taken on your specific circumstances. For any further information please contact:
- Gemma Wright at firstname.lastname@example.org or +44 (0)203 7945970
- Karen Jenkins at email@example.com or +44 (0)207 2165559