New Guidance on Conveyancing Transactions
Written By - Adam Parkin - March 17,2020
Several queries about the impact of the coronavirus on conveyancing transactions has prompted the Law Society to issue guidance.
Focus on the impact of the Covid-19 pandemic has so far heavily centred on the retail and hospitality industries. However, the Society said it has received many questions from members on residential conveyancing transactions.
Potential issues raised include: requests for properties to be decontaminated; refusal to vacate on completion because the seller is in self-isolation; banking system disruption, such as CHAPS; removal companies being reluctant to enter properties; and difficulties obtaining witnesses or physical survey valuations.
Before exchange, the Society says there is unlikely to be any drafting solution that would be appropriate to every case. 'You should review your existing contracts and test what the position would be in certain situations on the basis of that contract,' the Society says.
'Your client may wish you to negotiate new provisions to suit particular circumstances. We do not consider that bespoke clauses are necessary or desirable as standard.
'Once you’ve assessed the contract that you’re proposing to use, you’ll be in a better position to establish if any additional provisions are required or desirable in the particular circumstances of the transaction that is, or may be, affected.'
Chancery Lane says there is a difference between transactions where Covid-19 is present and all other situations where it is a possibility. Exchanging contracts on a 'business as usual' may be preferable to using new provisions but this should be assessed.
Should completion not take place after contracts have been exchanged due to the virus, the Society says the parties not completing will be in default.
It says: 'The contract provisions relating to default will apply unless the non-defaulting party takes a "good faith" view. If the transaction forms part of a chain of transactions, it may not be possible to take such a view without incurring a penalty.'