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Coronavirus: Residential Property Transactions

Coronavirus: Residential Property Transactions

Thorntons, like all of those other businesses dealing with the sale and purchase of residential property, must at this time be primarily concerned with the health and wellbeing of our colleagues, our clients and the general public. With that in mind, many of our normal services associated with residential property, particularly in Estate Agency, have been reduced so that personal face-to- face contact is kept to an absolute minimum. In the meantime, however, we are still here, at the end of the phone or by email or face to face via certain video apps, to answer your questions and service your business as best we can given current circumstances.

One significant consequence of complying with the current rules, is that we, and our clients as buyers and sellers of residential property, are obliged, wherever possible, to postpone or defer entry dates and the settlement of sales and purchases. This move is intended, as with other restrictions now in place, to inhibit unnecessary contact between and among individuals, and so limit the opportunity for transmission of the Coronavirus.

The need to defer is, in any event, reinforced by the fact that there are serious logistical difficulties in completing moves, with removal firms shutting down, the closure of the Land Registers’ Application Record making it impossible to register titles, and some lenders declining to release funds.

Only in cases where the failure to complete on time will result in “severe financial or personal consequences” to one, other or all of the parties to any transaction, should efforts be made to complete transactions, rather than postpone settlements. If, of course, your transaction falls within that category then we will do all we can, so far as within our power, to get the transaction over the line.

The current issues are out-with the control of the legal profession, and the only proper advice that we can currently offer our clients is to comply with the advice and rules, and seek, wherever possible to defer completion of your transactions.

That will, we appreciate give rise to some concern to those who are presently tied into contracts with set dates of entry, and the possibility that failure to complete on a due date will lead to penalties, or to the loss of a deal completely, should the “lockdown” remain in place for some time, as seems likely. There are no definitive answers to those concerns at present though it must be hoped, given that this current crisis affects everyone equally, that the goodwill and common sense of those engaged in transactions at the present time, will resolve most issues. We will certainly play our part in seeking to achieve a sensible solution to problems as they arise

For those who have been engaged in negotiations but who are not yet tied into a contract, then at any time either party to those negotiations can still “walk away”. There has been some discussion around how it might be possible to conclude a contract, perhaps by reference to a date of entry sometime after the date the current (and quite possibly future) restrictions are lifted.

Again, however, no one knows how long this will last.

Many prospective buyers may be concerned that the financial effects of the crisis will affect their ability to proceed. Lenders may shut down for new business until the restrictions are lifted. Many, and probably most, people who have been involved in negotiations will not want to be tied into a binding contract at present if it can be avoided.

Our advice in these circumstances has to be to sit tight and await developments.

The more closely we follow the rules, advice and guidelines, the sooner this will all be over and we can pick up the threads, in most cases, where we left off.

We continue to be available to answer your questions as best we can. 

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About the author

Kenneth Thomson
Kenneth Thomson

Kenneth Thomson

Partner

Residential Property

For more information, contact Kenneth Thomson or any member of the Residential Property team on +44 1382 346211.