How might COVID-19 affect your residential property transaction?

March 25th 2020

As the impact of coronavirus (COVID-19) on society for the long term becomes more apparent, it is important that we continue to offer support and guidance to our clients who are currently in the process of buying or selling a property.

We have received numerous questions from clients from each stage of the process, particularly in relation to:

  • How can your transaction be affected?
  • Should you proceed with your purchase or sale?
  • What are your options to ensure that the transaction can continue?

How might your transaction be affected?

This is an unprecedented situation, but it is crucial to be aware that the majority of business are taking a ‘business as usual’ approach as much as possible in the early stage that we are currently in. As we progress there are several factors that may cause significant delays during crucial stages of your transaction:

Before exchange of contracts:

  • Decreasing property prices may cause buyers to withdraw
  • Properties may need to be cleaned or decontaminated
  • Lack of staff and burdens on systems may slow down searches, surveys, and mortgage offers.
  • Witnesses may be hard to find due to isolation

At completion stage

  • Either party being unable to complete due to them being in self-isolation
  • Removal companies unable to enter properties
  • Disruption to conveyancing firms or lenders due to staff shortages
  • Change in circumstances of either party between exchange and completion leading to delays

What should you do?

Despite these potential disruptions, a contract is a legal document and there remains penalties for anyone who could be found to have breached after having exchanged contracts prior to sale.

It is crucial at this time that you give due consideration before making the decision to exchange contracts. At the very least, you should give thought to the following factors:

  • Has there been a deterioration in the situation that may cause completion to be delayed?
  • Are your advisors (conveyancers, lenders, mortgage broker) confident that the transaction can proceed?
  • Are there any unnecessary delays built in to the period between exchange and completion which may cause further complications
  • Have you planned for what may happen if a family member if a family member needs to self-isolate around the time of completion?

What are your options?

Your conveyancer will be able to advise you of several options that may limit the possibility of your sale or purchase falling through, but none are without their risks or limitations.  

Which approach is right for you?

Simultaneous Exchange and CompletionSynchronising exchange and completion limits the possibility of breach of contract from either party by removing the time period between the two transactions.There’s an increased risk of the transaction falling through without the exchange of contracts having happened at an earlier date. For properties in a chain, all parties would also need to agree to simultaneous exchange and completion, which is unlikely.
Variation of the ContractIn certain circumstances it is possible to insert clauses into the sale contract which allow for unexpected challenges that protect both parties if the transaction is delayed. This could include a break clause if significant delays occur.With the situation changing on a daily basis, it will not be possible to plan for every eventuality. For properties in a chain, all transactions would need to include a similar provision which could cause delays as this is negotiated.
Exclusivity AgreementsBoth parties could exchange an exclusivity agreement, this would involve them agreeing to a date that they would complete the transaction, with both parties paying a deposit which they would lose if they reneged on the agreement.Exclusivity agreements are uncommon and some lawyers are reluctant to use them. For properties in a chain, all parties would need to agree the same date to complete the transaction.

Next Steps

As the situation continues to evolve, it is clear that there is no simple solution that will work in every case. We will continue to provide our clients with best information possible to make an informed decision that is best for their personal situation.  

With disruption to the businesses of many stakeholders in residential property transactions, it is clear that to some extent delays may be inevitable. Our goal is to continue to provide a first class service to our clients. It is apparent that the best way for us to support you is to provide clear, jargon-free communication and to keep you updated as any circumstances change.

For more information on how the issues raised in this article affect your transaction, please contact Michael Weightman, Residential Property Manager in Spratt Endicott’s award-winning conveyancing team at

*Disclaimer: While everything has been done to ensure the accuracy of the contents of this article, it is a general guide only. It is not comprehensive and does not constitute legal advice. Specific legal advice should be sought in relation to the particular facts of a given situation.