How have conveyancing timelines been affected by the lockdown? Stephen messias of lawrence stephens considers the best approach
Flexibility in timelines is advised
This is a question conveyancing lawyers up and down the country have been weighing up over the past few weeks, ever since the government announced its new measures to help curb the spread of coronavirus. The answer may not be straightforward - and will require a number of careful considerations - but what can be ascertained at this stage is that the process of buying a property is currently much longer, and unlike any we have experienced before. Which means conveyancing timescales have been particularly affected, and the manner in which conveyancers approach these changes must be as fluid as the situation at large.
Following the Prime Minister’s announcement to enforce social distancing measures on the 23rd March, The Ministry of Housing, Communities and Local Government published some guidance for those looking to buy or sell residential properties. The department advised both buyers and sellers to delay completions, especially of occupied properties, until the end of lockdown, which at present, is not yet in sight. The guidance has put conveyancers in a difficult situation, as we remain committed to supporting the sales process ‘as far as possible’ and have clients who are obliged to complete where contracts have already been exchanged.
The government has since clarified that home moves may take place in circumstances where contracts have been exchanged, and it would be impossible for the parties involved to agree on a deferral of completion. For example, if the deferral were to result in the buyer having nowhere to stay during this period. At this stage, the completion date would need to be postponed following discussions between all parties, who must come to a decision over whether or not to delay completion of the purchase; depending upon whether or not the move is critical. Despite the overarching circumstances, every case should be treated on an individual basis and the health and safety of all involved remain paramount. It’s up to conveyancers ensure contractual commitments are upheld throughout this process without breaching government regulations on social distancing and the like.
“Due to the uncertainty of the current situation, all possible scenarios must be fully explored and clearly communicated with clients”
Some guidance
This means, more than ever, open communication between all parties is essential. To support the legal community in achieving this, a number of legal representative and trade bodies, including The Law Society and The Conveyancing Association, have released further government-backed guidance for conveyancers advising clients on house moves. The guidance provides a clear course of action for a number of possible scenarios; remaining aware of the limitations posed by the ongoing health crisis and advocating for flexibility where possible.
Where exchange has not taken place:
For example, for clients who have not yet exchanged, contracts should be amended to allow for the deferral of completion, where completion cannot take place due to COVID-19 related circumstances, such as the illness of any of the parties. Fittingly, e-signatures should be used on contracts to avoid contamination, unless the conveyancer has been authorised to sign on their client’s behalf. Throughout this process, conveyancers are expected to take the time to ensure that their clients are fully briefed on the benefits and risks which could arise as a result of these unique circumstances.
Where exchange has taken place:
On the other side of the coin, there are clients who had already exchanged contracts prior to lockdown. Here, timescales should also be flexible, and contracts may need to be amended to allow for a delay in completion. The parties would need to exchange a written agreement to amend the contract.
It is advised that a ‘two-step’ approach be taken to the latter end of the conveyancing timeline so that clients can align their move-in dates in accordance with government measures regarding social distancing, but also allow for further extensions of time if necessary. Given that the lockdown may well be extended again, all parties should take such matters into account. Likewise, once social distancing restrictions have eventually been lifted, time for home removals and deep cleaning must also be factored into plans.
Due to the uncertainty of the current situation, all possible scenarios must be fully explored and clearly communicated with clients. This includes the possibility of not being able to afford the mortgage once lockdown has been lifted, the possibility of the property value fluctuating significantly during the deferral period, thereby affecting the lender’s appetite to lend, and the possibility of mortgage offers expiring before it is possible to complete. Many conveyancers may find that once they reach the final stages of the conveyancing timeline, their client is no longer in the position to complete the transaction.
These are just some of the ways COVID-19 is, and is likely to, impact conveyancing timelines this year. It’s up to conveyancers to explore these issues at length and ensure that full transparency practised at every step of the process.
Despite the uncertainty that surrounds us, communication remains our greatest asset, and it cannot be neglected.