COVID-19 Coronavirus – Moving Home


Given the government’s current advice relating to COVID-19 ( Coronavirus), we are looking at extra measures to protect our clients contractually in conveyancing matters. There are special legal considerations for clients who are entering into a contract for the sale and/or purchase of a property.

Once you have exchanged contracts, you are contractually bound to complete on your sale and/or purchase on the agreed completion date.  If you are unable to complete on time, whatever the reason, including the effects of COVID-19, you will be in breach of contract.  The implications of this can range from payment of interest under the contract for a late completion, or potentially the loss of the 10% deposit (for buyers), and other reasonable costs of the other party you are buying from or selling to, as well as all others in the chain (if there is more than one property being sold a “chain” of properties exists) which might follow from the breach of contract.

During the COVID-19 pandemic we are hopeful that solicitors, banks, lenders and removal companies will be very much ‘business as usual’, and if there are problems, that parties will work together and take a pragmatic approach to ensure that transactions complete as quickly as possible.  However, it is important to be aware of the possibility that there may be unforeseen delays, for example in lenders releasing mortgage funds, other parties’ solicitors not being fully operational or removal companies being short staffed or having access issues, and these may change from time to time in keeping with the government’s recommended or mandatory requirements.  It means that you may be in breach of your contractual obligations, through no direct fault of your own, but liable for damages. It equally follows that another seller or buyer in the same conveyancing chain may also find himself or herself in a breach situation, meaning that you are unable to complete your sale and/or purchase.

The Law Society, our governing body, has recommended that clients exchange contracts and complete on the same day. The benefit is that the parties will know that mortgage funds have been released, solicitors are available to complete the transaction(s) and removal firms have been able to fulfil their commitment. The difficulty with this approach is that no party in the chain will know until the day of intended completion whether or not they are moving house that day, and if they cannot, there will be costs associated with cancelling removal firms and returning mortgage money (if you are a mortgage dependent buyer).

The alternative is to exchange contracts with the completion date on such date as the parties may agree, but to include within the contract(s) you entering into a clause which would attempt to ensure that the burden of the cost of late completion or a total failure to complete does not fall unfairly on any one party if a COVID-19 Coronavirus event occurred. No standard clause currently exists which all solicitors have agreed to, and the degree to which an event may arise is arguable. There is a risk that any such clause may not fully cover the party who is unable to complete, or that the terms of one party’s contract differs from the next party in the chain, potentially leaving one party exposed.

The situation currently is fast moving. If you are considering moving house, we recommend speaking to your estate agent and solicitor to explore the situation and your particular circumstances.

Chris Green is a partner in the in the Property department at Barker Gotelee Solicitors in Ipswich.

Suffolk Property Solicitors – for more information on our range of legal services, please call the team on 01473 611211 or email bg@barkergotelee.co.uk