Updated on 21/04/2020
We understand that you might be concerned if you’re currently in the middle of a property transaction. So our solicitors have answered some common questions below.
If you have any questions relating to your transaction, please call us on 0370 1500 100, or contact us online.
General conveyancing questions:
Buying a new build property:
Lease extensions and freehold purchase (enfranchisement):
What types of transactions can still go ahead?
There are various transactions which can still proceed. Mostly transactions which do not involve anybody physically moving, or which only involve one house move, into an empty property, are
legally able to go ahead. For example:
- Sales under probate
- Transactions where there’s no chain
- Investment property transactions
- New-build purchases
- Remortgages
- Portfolio and investment purchases and sales.
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Can I still exchange contracts for my purchase?
There’s been no legal change that stops you exchanging contracts, or completing the purchase or sale of property.
However, every case is individual, and there will be other factors (for example whether you need a mortgage or if the property is already vacant).
Once you’ve exchanged contracts you’re bound by your obligations under the Law Society’s “Standard Conditions of Sale”. This means that if you exchange and are then unable to complete the
transaction (for any reason), you’ll be liable to pay interest and related costs incurred by the other party. You could potentially lose your deposit too.
To stop this from happening, your solicitor may recommend that you don’t enter into a contract unless the completion of the contract can occur at the same time. This is known as simultaneous
exchange and completion.
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What if I’ve exchanged contracts, but can’t move due to the lockdown?
If you’ve exchanged contracts you have to comply with its terms. If you can’t complete your purchase you may have to pay costs incurred by the other party. You could even lose your deposit.
However, these are unprecedented times. Speak with your conveyancer – you may be able to negotiate with the other side to see whether the contract can be varied.
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Will I have problems getting a removal company?
The British Association of Removers has recommended to its members that they only complete those bookings which are already agreed. It has also advised its members to immediately cancel or
postpone any moves they have not already started.
Removal companies are obliged to comply with the social distancing rules, which is incredibly difficult given the nature of the work they do.
So you might find it very difficult to get a removal company at all. You should contact your removal company before you exchange contracts to check they will actually be able to complete your
move.
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What delays can I expect with my conveyancing?
While solicitors and conveyancers are able to continue their work from home, they need others to work with them in a conveyancing transaction.
We are seeing several delays at the moment, due to the disruption caused by coronavirus:
- Land Registry – some documents and deeds require physical signatures on them. This is very difficult at the moment, especially where people don’t have a home printer and/or
scanner.
- Searches – we’re experiencing delays in getting searches. These are needed for property purchases and by mortgage lenders.
- Mortgage lenders - need more time to deal with enquiries and to release money. Physical surveys or valuations which are required for some mortgages may be unable to take place. In
turn this means mortgage offers can be delayed or postponed.
- Leasehold purchases -conveyancers require a Management Company or Landlord to provide information relating to the lease and the building. However, some management companies are
not open or able to provide this information at present.
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Can my remortgage still go ahead?
As remortgaging doesn’t require anyone to move from their property, it should be possible to remortgage your property.
However, lenders have been withdrawing some mortgage products so there may be less choice than before. You may also find it difficult to get a mortgage if a valuation isn’t able to take
place.
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I’m waiting for a mortgage offer, is this being affected by the lockdown?
Because physical valuations are unable to happen due to the lockdown, mortgage offers may be delayed.
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What happens if my mortgage offer expires before completion can take place?
UK Finance has announced that all mortgage lenders will extend mortgage offers by three months.
However, in practice we’re not seeing this to always be the case. It’s important that you check with your mortgage lender and conveyancer, to see if the offer has been extended.
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Is the situation the same in Scotland?
Some of these answers apply equally to Scottish transactions. However, it’s important to bear in mind that there is a separate legal system in Scotland and that the Registers of Scotland are
currently closed to paper applications.
Please contact our Scottish conveyancing team if you have any questions.
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What happens if I haven’t exchanged contracts and the value of the property decreases?
There’s no obligation on either party to complete a transaction until contracts have been exchanged. This means that a buyer could back out of the purchase, or negotiate a lower price if the
property value has decreased.
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I’m planning to sell my property when the lockdown is over, is there anything I can do now?
Yes – this is a good time to get your paperwork in order and prepare for your sale. You can instruct your solicitor to ensure the legal title is in order and this may make the transaction go
more smoothly when you’re able to proceed.
In addition, some estate agents may be able to give you a desktop valuation and arrange to get your property on the market.
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I’m buying a new build and exchanging with completion ‘on notice’. Can a developer serve the notice during the lockdown?
Exchanging a contract for a new build purchase “on notice” means that a developer can serve a notice telling you the property is ready, giving you a set amount of time in which to complete the
transaction.
There’s nothing to stop a developer from serving such a notice at this time, so long as the property is ready.
If you receive notice you should carefully consider whether you’re able to complete the purchase. Speak with your solicitor if you anticipate any problems.
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Can I move into a completed new build house?
It is still allowed to move into an empty home - so this would include new build houses.
Clearly any moving arrangements would need to comply with the rules on social distancing. The most recent guidance suggests that removals firms should not be entering into new business during
this period.
Guidance on social distancing also suggests that “critical home moves” can go ahead. This is likely to include situations with house purchase chains where it has not been possible for all the
parties to the chain to agree to an extension of completion and moving dates.
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What happens if I’ve exchanged contracts for the purchase of a new build house and construction is delayed?
You need to look at your contract closely and take advice from your solicitor.
Most new build home contracts have to comply with the Consumer Code for New Homes. This allows developers to delay their building works where reasonable. It’s likely that the current outbreak
and social distancing give reasonable cause for some delay to completing works.
The Consumer Code requires developers to give buyers a termination right if there has been excessive or unreasonable delay (this may not be the exact term used in your contract). However, it’s
likely that the developer complying properly with the law and guidance relating to the current outbreak would not be found to be unreasonably delaying the works.
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What happens if I’ve exchanged contracts for the purchase of a new build house, but I’m unable to complete the sale of my current house?
It’s important to understand the terms of your sale contract (for your current home) and the purchase contract (for your new home). The government has not introduced any legal changes on how
those terms work, and has not prevented them from being enforceable.
What they are doing is providing guidance to the conveyancing profession, to the property industry and the development industry. The government is clearly requesting that everyone involved takes
a reasonable approach and delays completion/moving dates where possible.
If it’s genuinely not possible for those in the chain to agree to delay completion dates, then it appears from the guidance that this justifies house moves going ahead.
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How are lease extensions and freehold purchases being affected?
Lease extensions and enfranchisement (freehold purchase) claims are continuing with no specific government guidance relating to them.
However, due to the social distancing rules, surveyors may no longer be able to inspect properties and provide valuations. You may wish to speak with your surveyor to see if this will affect your
transaction.
As part of your claim you may be required to apply to the First Tier Tribunal or County Court. At the moment these institutions are not holding hearings, however they are operating by email.
This means your solicitor may be able to apply to the court or tribunal, but there may be a delay in getting a hearing date.
Lease extension and freehold purchase claims have to run to tight deadlines (for example to provide deposits, to serve counter notices and to make tribunal applications). Your solicitor should
advise you if there is any difficulty meeting these deadlines.
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Will I be able to start a lease extension claim?
There’s nothing to stop you starting your lease extension claim.
In fact, the term of your lease will continue to decrease. In addition it’s anticipated that there will be a slight drop in property prices which may mean now is the best time to secure a lower
price (or premium).
To start your claim you’ll need to serve a notice on your landlord.
The notice must include a reasonable premium you’re prepared to pay. This premium would be based on advice from a surveyor who specialises in this field. Normally the surveyor would inspect the
property, but in the circumstances they may be happy to provide a desktop valuation and proposed premium.
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Do landlords get extra time to respond to lease extension claims?
No, the law remains unchanged in this area.
If you think you’ll encounter difficulties in meeting these deadlines, you must speak with your solicitor for further advice.
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Can I still enter into a voluntary lease extension?
Yes, by entering into a voluntary agreement you may sidestep the requirement for a valuation.
You should speak with your solicitor to ensure you understand the risks involved in entering a voluntary lease extension.
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