In these uncertain times, what can conveyancers do now?
In these uncertain times, conveyancers must be absorbing guidance given by the Government and The Law Society and become a fountain of knowledge as their clients approach them for guidance and a resolution.
Propertymark looks at what you should be doing to keep on top of ongoing change.
With uncertainty currently throughout most aspects of everyone’s lives, home buyers look to conveyancers as the professional in the hope they can shed a light on their unsettled questions. By following guidelines, sales can be squeezed wherever possible, as well as showing expertise to better inform current and future vendors.
Tony Piccirillo, AVRillo Solicitor Partner, and Co-founder ran through his guidance and tips in a recent Propertymark webinar covering topics such as:
- Government and The Law Society guidance
- Cases that have exchanged
- Cases that have not exchanged
- What you should be doing
The Government’s general guidance at the moment is to “agree alternative dates to move to a time when is likely that stay-at-home measures will no longer be in place” – this doesn’t mean that clients’ transactions s need to stop.
Pre-exchange
If your property is:
Unoccupied property
You can continue the transaction.
Occupied property
It is recommended you either:
Option 1: All parties should work to delay the exchange of contracts until after this stay-at-home period.
Option 2: Include explicit contractual provisions to take account of the risks presented by the virus. The Law Society says, “you should make sure that if you do instruct your conveyancer to exchange, that they have incorporated a suitable clause in the contract to deal with any ongoing risks caused by the virus.”
The second option is more complex and would require a lawyer to come up with a clause that would protect the client, including:
- Client separation
- Reduction in salary
- Law firm closure
- Family quarantine
- Lander withdrawal
- Chain collapse
- Clients health
- Loss of jobs
- Removal issues
There is currently no standard clause taking into consideration the many impacts the virus may have. Until ‘tested in court’ no one knows what the correct clause consists of and lawyers are cautious of inputting incorrect information into the clause, so this is delaying the exchange of contracts.
If an exchange in contracts has already been done
Breaches of contract still apply in England unlike other countries that have put a freeze on them, and large penalties will still be imposed if these obligations are not met.
Can You Complete?
Unoccupied property
Continue with this transaction although follow the guidance on home removals. Parties should be encouraged to approach this process in a spirit of good faith.
Occupied property
Change the original contract – buyers and sellers should be informed about all their options and consequences.
Option 1 Rescission: Ideally both parties would be put back largely in the position that they were in before contracts were exchanged. This means that the deposit monies would be returned in full and neither party would have any claim against the other.
Option 2 Deferred Completion: If one of both parties still want to proceed, consider agreeing a variation to the contract so that the completion date is deferred to a time when it is possible and safe to proceed.
The Law Society has produced a draft variation agreement clause, follow the link below to download the agreement, and read their guidance.
More Information
For further information and to view Tony’s guidance in full detail, register to download the recorded version of Propertymark’s Conveyancing, what to do now webinar.
Propertymark Webinars
To support agents’ preparations to emerge from the Coronavirus lockdown to maximise market potential, Propertymark has written a series of articles designed to add value and underpin your business. Our webinars also provide helpful tips on marketing, view details of our recorded and upcoming webinars.
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