Q&As for buyers during Coronavirus

publication date: Apr 2, 2020
 | 
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books

Q&As for buyers during Coronavirus

 

The Government guidance for buyers states that:

Home buyers and renters should, where possible, delay moving to a new house while measures are in place to fight Coronavirus (COVID-19).

Our advice is that if you have already exchanged contracts and the property is currently occupied then all parties should work together to agree a delay or another way to resolve this matter.

They have added an ‘exception’ to this which states you can ‘move house where reasonably necessary’. My understanding is this means if you have a contractual obligation and/or the property is empty then a move can still take place during lockdown.

Although you may be able to contractually complete or move into a rented property, please note that you will find it difficult to book a removal company during stay at home measures as many have shut because they cannot easily operate within a 2m distance. They have the safety of their employees and their families to think about too.

These Q&As are in line with the clear government guidance:-

  • Only go outside for food, exercise, health reasons or essential work
  • Stay 2 metres (6ft) away from other people


If you have a question for your individual circumstance, please contact us or email us with your question.

Please note - this is the official government guidance for buyers

Top 10 Q&As for property buyers

Why can’t I complete if I’ve exchanged contracts? 
Exchanging contracts normally means you have a date to move into your new property. The Government guidance however is to delay your move if possible. Legal companies have been advised of how to do this so it’s done consistently.

However it is still possible to complete, IF you can move your own belongings within the Government guidance or don’t need to move into the property straightaway eg it’s for investment or a second home:-

Please note: if you are moving to a new home or one that is empty, ideally wait 72 hours after anyone has been in it. Keys need to be disinfected before they are passed over and ideally done remotely or by meeting the 2m distancing guidelines.

You should also check the up-to-date restrictions on movement before leaving your home.

What does a ‘delay’ actually mean? 
It is possible to vary the contract. This allows your existing contracts to still be valid, but with a flexible date to complete. Your agent and legal company should check with your seller and others in the chain that they can still complete (see: Will my mortgage still be valid?). If using a moving company, do check availability immediately post lock down as many will be inundated with home movers in this position. Bear in mind homes still cannot be completed on Saturdays and Sundays.

Will my mortgage still be valid?
As long as your circumstances haven’t changed, your mortgage offer should still be valid and could be extended by up to three months. Contact the mortgage lender/your broker to ask how delaying will affect your mortgage offer or ask your legal company to liaise. However if your job and earning status has changed, you will have to discuss this with your lender/broker to see if you can still go ahead, for example, if you have been furloughed or have lost your job or income has fallen due to the stay at home measures.

For information on how to secure income during the stay at home measures, visit the Government guidance to employers and businesses.

Can I insist we complete?
The Government allows you ‘to move house where reasonably necessary’ during this time. So you can ask to complete, but bear in mind if someone has been asked to isolate for up to 12 weeks or has the virus, it can’t be done within the Government’s guidelines. Other sellers and buyers circumstances may have changed through no fault of their own. So, please, be understanding and kind. In essence, it is as true as ever that dates have to be negotiated between all parties, no matter how frustrated you may feel.

Who insures a property during exchange and completion?
It is the responsibility of the buyer to insure the property during exchange and completion, but the seller’s lender will also require the seller to maintain the insurance until the mortgage is repaid. Talk to your legal and insurance companies if you are unsure how to proceed and if it is your buyer insuring the property, make sure you have their details just in case you need them in an emergency. 

If the property is going to be empty for over 30 days you should check with the insurer whether it will still be covered or whether you will need specialist insurance.

What if my seller pulls out? 
People always get nervous when there is uncertainty and these are extraordinary times. If you have exchanged and your seller pulls out for a valid reason eg they have lost their job, lost their own buyer, their mortgage offer on their next property has been pulled, then under normal contract terms a seller would still be entitled to damages, however, if you have varied the contract to defer completion because of Coronavirus, the clause will probably allow a seller to withdraw for these reasons without penalty.  Check with your property lawyer.

If they wish to pull out because they are nervous of what might happen to property prices or committing, then unless the normal contract terms have been changed, you are entitled to a percentage of the deposit.

Can I still exchange during stay at home measures? 
This will depend on whether a mortgage is required and if a valuation/survey has been done or not. If you are a cash buyer and/or you have a mortgage but the valuation/survey has already been done, you can exchange, but with a contract that will leave a date open to complete.

If the mortgage valuation has not been carried out but you and the lender are happy with a desktop valuation then you may be able to complete. However, in my view all properties should have a survey prior to exchange as you never know what ‘hidden’ defects there are on a property, however good it looks.

If my purchase is aborted, what costs will I incur? 
If you have already exchanged, you may be able to claim the aborted costs from your buyer, depending on why they pulled out (see: What if my seller pulls out?). If you haven’t exchanged you are likely to incur small costs such as those which are finance related, but speak to your lender/broker, under the circumstances they may wave any fees incurred. If your legal company was booked on a ‘no sale, no fee’ basis, they you will be charged any fees incurred on your behalf, but not the law firm’s charges for their legal work.  If your legal company is not on a ‘no sale, no fee’ basis then you will have to pay for their work to date.  This will vary depending on how long your transaction has been going and how much work they have done, so do check with them.  As with lenders/brokers, talk to your legal company, they may be lenient during this time.

Even if you are on a ‘no sale, no fee’ basis, this does not apply once contracts are exchanged.

Why are some removal companies saying they won’t move me?
Removal companies are in a tricky position. They are being told they can carry out work for ‘critical moves’ as long as they meet the Government guidelines. However, they cannot easily meet the 2m social distancing and will clearly be constantly touching your items, which even if they wear gloves, won’t protect it. They will also be in your old and new home and likely to be in contact with you. Moreover, members of the public need to consider if they wish to have individuals they do not know and know little about moving their possessions and interacting with them at this time.

The main trade body for removal companies is the British Association of Removers. They have, immediately post the Prime Minister's address to the nation, advised their members not to move people. If a company does agree to move you, please note they cannot easily do this within the Government guidelines and you will be exposing yourself and your family to potential infection.

Do I need to clean a property before I move out or in? 
Ideally yes, but this is something you need your legal company to agree with other parties. For example, confirm who is cleaning which property – should you clean the one you are leaving or clean the one you are moving too. Here are the Government guidelines for cleaning a property.

 

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