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Tuesday, 31 March 2020

COVID-19: Law Society Guidance to Conveyancers


The Law Society has issued guidance to conveyancers advising clients on house moves. 

The guidance supplements the government advice on home moving, which I outlined in this earlier post.

The Law Society guidance repeats the government advice that clients should be encouraged to agree to delay completion where possible.

The guidance should be read in full, and it deals with situations where contracts have already been exchanged and where the parties have not yet exchanged.

Here are some of the main points concerning contracts that have already been exchanged:

·       When agreeing a delay, consider the effect of the delay on any mortgage offer and consult the lender to confirm the offer may be extended.

·       Review your search results, as they may need to be renewed.

·       When extending a completion date, to comply with Section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 a written agreement varying the contract will be required and must be signed by all parties. To avoid contamination, instead of a physical document, the parties should either e-sign the variation agreement or authorise their conveyancer to sign as agent on their behalf.

·       Make it clear that there is not an intention to create a new contract; only an intention to vary the existing one.

·       Follow a two-step process – delay completion until the end of the current stay-at-home period and the requirements about physical distancing, but with the ability to extend that timescale if the government restrictions are extended.

·       The Law Society suggests the variation provides that once the restrictions end there will be a period agreed before completion to enable everyone to get ready for the move. This might be one or two weeks.

·       Make sure the timescale will give enough time to find removals and arrange the move, especially in circumstances where there is likely to be an increased demand for these services.

·       Circumstances may change during a long delay. Extensions to mortgage offers will be required, but also buyers will need to think about what might happen if their circumstances change during this period, for example if they lose their job.

·       Property values will fluctuate during the period of deferral and this might impact a lender’s ability to lend. This will be particularly important if the mortgage makes up a large proportion of the house price, perhaps 60% or over.

·       When in a chain, bear in mind that if your own buyer or seller’s circumstances change, and they need a mortgage, they may not be financially able to proceed with your transaction at the end of the restrictions.

·       Even when the restrictions are removed there may be other unavoidable delays, perhaps if someone in the chain has died and their estate needs to be settled before the move can be completed. In that case you could agree a further delay or seek to end the contract.

Some of the issues outlined above may also be relevant to contracts that have been exchanged for the sale and purchase of commercial property.


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