New rules on buying, selling, moving and renting

Home buyers and sellers have been confused by the latest coronavirus restrictions. Those who have exchanged contracts are in panic mode because, after signing on the dotted line, both parties are legally obligated to buy and sell.

If either the buyer or the seller pulls out after contracts have been exchanged, the party in breach will be liable for damages and will forfeit the exchange deposit.

The latter is usually 10 per cent of the property price.

However, John Robson, conveyancing specialist and Head of Residential Property at Milners Law, Harrogate, says: “There is no doubt that a number of contracts will fail but if there are extenuating circumstances with buyers affected by the coronavirus situation then I believe they should have deposits refunded. There are no courts open to

decide the matter anyway so let’s hope that people act reasonably.”

If exchange of contracts has taken place and a completion date has been agreed, then the seller must move out of the property or the bank or building society will not release funds to allow the buyer to pay for it. This could be an issue for those laid low or concerned about contamination.

Speaking earlier this week, John Robson said: “ We have got clients contracted to move and we are working hard to try and make sure that happens.

“If that can’t happen then the best option will be to seek a deed of variation on the completion date.”

Those who were just about to exchange contracts on a home are seeing deals fall down.

John Robson says: “I can see the logic in not exchanging contracts at this time because once you have then you are legally obliged to pay for the property. It is best to put buying and selling on hold given the circumstances.”

The Government has just announced its advice on home moving. It says that where the property being moved into is vacant, then you can continue with this transaction although you should follow safety guidance on removals. Where the property is occupied, all parties must do all they can to agree alternative dates to move, after coronavirus measures are lifted.

If moving is unavoidable for contractual reasons and the parties are unable to reach an agreement to delay, people must follow advice on staying away from others to minimise the spread of the virus. In the new emergency enforcement powers that the police have been given, there is an exemption for critical home moves.

UK Finance has confirmed that, to support buyers who have already set dates for completion, all mortgage lenders are working to find ways to enable customers to extend their mortgage offer for up to three months to enable them to move at a later date. Government advice is for removals firms to honour their existing commitments where it is clear that the move can be done safely and where it is clear that the moving date cannot be altered.

Estate agents have closed their offices but they are working from home and continue to market properties for sale, especially as visits to property portals are expected to rocket.

Patrick McCutcheon, Director of Residential at Dacre, Son and Hartley, said: “We are not doing viewings or mortgage applications, though we are happy to advise people and we continue to market homes and take notes of interest from would-be buyers.”

Government advice to home sellers is that you cannot invite people into your house for viewings but you are free to continue to accept offers on your property.

The Residential Landlords Associationsaid its members are doing their best to help tenants.

John Stewart, Policy Manager for the RLA, said: “The Government is legislating to ensure that landlords cannot repossess a property without a minimum of three months’ notice.

“This will apply to all new eviction notices. Where possession proceedings are already underway we would encourage landlords to reflect carefully on the situation in light of the current climate. The reality is that the courts are unlikely to be prioritising any ongoing repossession cases anyway.”

Mr Stewart added: “We are seeking clarification from the Government as to whether travel to look at a new rental property or to move home is deemed essential. It is of course vital that no one is left homeless as a result of unforeseen circumstances during this lockdown period.”

David Cox, Chief Executive of the Association of Residential Letting Agents, added: “The latest Government guidance is clear and people should stay home unless absolutely essential.

“House moves shouldn’t be cancelled altogether but put on hold for now, and we’re asking tenants to stay put for the duration of this period, to pay rent, and to seek help from the Government if they are struggling with their rent costs.”

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