The lockdown saw the majority of ongoing conveyancing transactions grind to a halt. Clients have been concerned about ongoing transactions not completing due to issues with removals, banks not being able to release mortgage advances, legal advisors not being able to provide the usual level of service and restrictions on movement.
In practice, throughout lockdown, banks have been performing, most firms have moved fairly smoothly to remote working and removals have been taking place, albeit less easily in the case of occupied properties.
Initially many lawyers tried to incorporate “coronavirus” clauses into contracts, but we are not aware of any actual cases where the clauses were triggered on delayed completion.
Many parties felt that they were simply too uncertain and they have largely fallen by the wayside. Where contracts were exchanged prior to awareness of the virus, parties have by and large tried to act reasonably in agreeing delayed completions.
A large number of transactions have also proceeded to simultaneous exchange and completion on the same day, to avoid the risk of either party being in breach of contract. While not ideal in terms of making practical arrangements, it has often been seen as the least risky solution.
With social distancing, it can be difficult to arrange for documents to be witnessed. The Land Registry has accommodated this issue by temporarily relaxing certain requirements.”
With social distancing, it can be difficult to arrange for documents to be witnessed. The Land Registry has accommodated this issue by temporarily relaxing certain requirements.
There are also difficulties in setting up meetings for new clients and to certify ID. Video meetings are being widely used but are not suitable in all cases. These issues will be ongoing despite the re-starting of the market.
Moving out of lockdown
The recent government announcement setting out steps to enable people to move home safely and to re-start the housing market has already resulted in the release of stalled transactions.
Estate agents’ offices are back open and they have reported a surge in enquiries; viewings are permitted and where possible agents are providing video tours to keep the number of visits to a property to a minimum; removal companies and other essential parts of the sales process have re-started; properties can now be accessed for surveys and mortgage valuations.
There are also measures in place aimed at helping construction sites and the planning system. It should be noted that these changes do not represent a return to normality; the focus is on adapting existing practices and creating new ones to minimise the risk of spreading the virus.
For ongoing and new sales, as we move out of lockdown, pinch points are likely to arise with the speed of local authority search results, which have understandably been delayed and by a backlog at the Land Registry in dealing with enquiries and registrations.
The Land Registry have rightly prioritised improving turnaround times for transactional searches, but there is a delay in processing registration applications, which may lead to delays in future transactions.
Lawyers are generally working remotely and those firms who have invested in IT infrastructure and relevant practices have been able to adapt quickly. Unfortunately, some smaller business, local authorities and public bodies may lack the necessary infrastructure or the funds and resources to implement such practices.
It has been well publicised that fraudsters are trying to exploit the situation and, as always, we will need to remain vigilant to ensure that they cannot find opportunities to abuse new systems.
There are other factors which will continue to be of significant concern both to existing homeowners and to those looking to move. Mortgage holidays are likely to be reviewed and those who have taken advantage of them but whose financial situation has not improved may need to seek advice. Those intending to rely on shares or other investments to fund a purchase may now find themselves unable to afford to move, and mortgage offers might be harder to come by for those on reduced working hours and salaries.
In addition to adapting to the ‘new normal’ when moving house, it is clear that all parties involved do need to remain as flexible and to act as reasonably as possible.”
Many will see now as the ideal time to prepare their property for sale and a legal advisor will be happy to discuss how best to secure a swift completion and to mitigate the ongoing risks.
Thought still needs to be given to ensuring that parties do not risk being in breach of contract where completion has to be delayed for any reason and so simultaneous exchange and completions will remain attractive.
Sellers may need to do more packing and clearance themselves than previously and many tips, charity shops, auction houses, etc may be operating on a reduced basis, so sellers should factor this in when agreeing the period between exchange and completion.
In addition to adapting to the ‘new normal’ when moving house, it is clear that all parties involved do need to remain as flexible and to act as reasonably as possible. Despite these ongoing obstacles, the anecdotal evidence would suggest that the market has re-started strongly, stalled deals are now proceeding and new deals are being agreed.