Covid - Exchange/completion clarification

ccfc1972

I'm not sure if this has been clearly answered anywhere, so apologies if it has.
We are due to complete next Friday, all being well. Our buyers have a deadline of the 25th Jan to complete buy, or they're out and everything falls through.
The question is, what happens if any person in the chain tests positive for Covid between now and completion day? Does everything get put on hold or is there still a way to complete? With 1 in 50 now apparently having Covid, it's a worry that it could possibly happen.

AdrianC

Have you exchanged yet? Was there any covid protocol/caveat in the exchange?
If you have, there's not, then there's no get-out.
If you have, and there is, then that outlines the situation.
If you haven't, then all bets are off.

pinkteapot

Have you exchanged contracts, or are you doing same/day exchange and completion?

ccfc1972

We haven't exchanged yet. As I said on the "waiting to exchange" thread. We're waiting on the top of the chain sorting out an issue. But we seem to have 3 different solicitors with 3 different ideas of when to exchange. One wanted a week, the other a few days, and the other wanted to exchange and complete on the same day. Seems currently to be impossible to get everyone on the same page.

ccfc1972

I just received this from my solicitor...

Further in this matter, we have advised you that in order to mitigate any risk to your contractual position amid the COVID19 crisis, you should proceed to an exchange of contracts and completion simultaneously which means that this will happen on the same day and without any period of time in between.  You have advised us that you are happy to accept this risk without any recourse to LPL and we reiterate that these risks include, but are not limited to:

 

1. An individual within the chain of transactions having to self-isolate and therefore being physically unable to vacate the property on completion

 

1. Your mortgage lender, or any mortgage lender providing finance to an individual within the chain withdrawing their mortgage offer with no notice and with no given reason which they are entitled to do so up until legal completion of the loan.  The reasons for them doing this may include the person’s financial or employment position changing or the mortgage providers lending criteria changing.

 

1. You may be satisfied as to your own position and circumstances with regards to your mortgage finance but you should consider that if anybody in the chain is affected in this way, this will have a knock on affect to the whole chain of transactions and cause it to collapse.

 

1. You may have received a smaller deposit on your sale matter than the one offered on your purchase because you are purchasing for a higher amount.  You should consider how the difference of the higher deposit amount would be honoured/paid by you under the terms of the contract should you find yourself in breach of contract through no fault of your own

 

We would be grateful to receive your written instructions as to how you now wish to proceed by return email having considered the above advice.

So is this basically saying that if we agree to exchange before completion and someone then has to isolate due to Covid, that we would ALL be in breach of contract?

stuartwatford

I just had a covid/UK gov regulation amendment/rider sent through from solicitor, similiar to yours, if all agree to it and then someone cannot move due to covid or gov stating no house moves can take place between then nobody can Sue each other, if they fail to complete on the agreed date. 

Mineral1

stuartwatford said:

I just had a covid/UK gov regulation amendment/rider sent through from solicitor, similiar to yours, if all agree to it and then someone cannot move due to covid or gov stating no house moves can take place between then nobody can Sue each other, if they fail to complete on the agreed date. 

We got sent one to review but to be honest, the way it is worded means that anyone in the chain can claim they have suffered a "covid event" and delay completion, perhaps by an indefinite amount or up to an agreed "long stop date" if one is inserted. My concern is that it means the exchange of contracts is somewhat meaningless as any party to the contract can unilaterally delay/terminate it by claiming their mortgage offer was withdrawn or they have to self isolate. So why bother exchanging ahead of the completion date.

stuartwatford

Mineral1 said:

stuartwatford said:

I just had a covid/UK gov regulation amendment/rider sent through from solicitor, similiar to yours, if all agree to it and then someone cannot move due to covid or gov stating no house moves can take place between then nobody can Sue each other, if they fail to complete on the agreed date. 

We got sent one to review but to be honest, the way it is worded means that anyone in the chain can claim they have suffered a "covid event" and delay completion, perhaps by an indefinite amount or up to an agreed "long stop date" if one is inserted. My concern is that it means the exchange of contracts is somewhat meaningless as any party to the contract can unilaterally delay/terminate it by claiming their mortgage offer was withdrawn or they have to self isolate. So why bother exchanging ahead of the completion date.

Yes agreed, adds another level of uncertainty.

stuartwatford

Mineral1 said:

stuartwatford said:

I just had a covid/UK gov regulation amendment/rider sent through from solicitor, similiar to yours, if all agree to it and then someone cannot move due to covid or gov stating no house moves can take place between then nobody can Sue each other, if they fail to complete on the agreed date. 

We got sent one to review but to be honest, the way it is worded means that anyone in the chain can claim they have suffered a "covid event" and delay completion, perhaps by an indefinite amount or up to an agreed "long stop date" if one is inserted. My concern is that it means the exchange of contracts is somewhat meaningless as any party to the contract can unilaterally delay/terminate it by claiming their mortgage offer was withdrawn or they have to self isolate. So why bother exchanging ahead of the completion date.

Out of interest - what was your outcome, has your chain agreed a close (couple of days) exchange to complete? Our chain are trying to agree exchange date, next Friday is completion currently, waiver wont be included, so just usual risk. 

Tiglet2

ccfc1972 said:

I just received this from my solicitor...

Further in this matter, we have advised you that in order to mitigate any risk to your contractual position amid the COVID19 crisis, you should proceed to an exchange of contracts and completion simultaneously which means that this will happen on the same day and without any period of time in between.  You have advised us that you are happy to accept this risk without any recourse to LPL and we reiterate that these risks include, but are not limited to:

 

So is this basically saying that if we agree to exchange before completion and someone then has to isolate due to Covid, that we would ALL be in breach of contract?

The solicitor's letter implies that you are in agreement with their advice to exchange and complete on the same day.  This reduces your risk (in relation to actually completing), because if someone were to fall ill in the days before completion, or indeed on completion day, then the solicitors simply won't exchange.  You therefore would not be in breach of contract.  The solicitor is legally bound to advise of any risks, but in this pandemic the general advice has been to exchange and complete simultaneously, to reduce those risks.  There are more risks associated if you exchange a week/month/few days before completion, because once you have exchanged you are then legally bound to complete, whether or not someone subsequently falls ill with Covid.  Unfortunately, a simultaneous exchange/completion means that you won't know whether you will be completing until the day and, of course, you will have already organised removals etc, which may have to be put in storage or unpacked. 

Mineral1

stuartwatford said:

Mineral1 said:

stuartwatford said:

I just had a covid/UK gov regulation amendment/rider sent through from solicitor, similiar to yours, if all agree to it and then someone cannot move due to covid or gov stating no house moves can take place between then nobody can Sue each other, if they fail to complete on the agreed date. 

We got sent one to review but to be honest, the way it is worded means that anyone in the chain can claim they have suffered a "covid event" and delay completion, perhaps by an indefinite amount or up to an agreed "long stop date" if one is inserted. My concern is that it means the exchange of contracts is somewhat meaningless as any party to the contract can unilaterally delay/terminate it by claiming their mortgage offer was withdrawn or they have to self isolate. So why bother exchanging ahead of the completion date.

Out of interest - what was your outcome, has your chain agreed a close (couple of days) exchange to complete? Our chain are trying to agree exchange date, next Friday is completion currently, waiver wont be included, so just usual risk. 

no outcome yet, i have put our proposal to exchange and complete forward to the estate agent but no response. 

Tiglet2 said:

ccfc1972 said:

I just received this from my solicitor...

Further in this matter, we have advised you that in order to mitigate any risk to your contractual position amid the COVID19 crisis, you should proceed to an exchange of contracts and completion simultaneously which means that this will happen on the same day and without any period of time in between.  You have advised us that you are happy to accept this risk without any recourse to LPL and we reiterate that these risks include, but are not limited to:

 

So is this basically saying that if we agree to exchange before completion and someone then has to isolate due to Covid, that we would ALL be in breach of contract?

The solicitor's letter implies that you are in agreement with their advice to exchange and complete on the same day.  This reduces your risk (in relation to actually completing), because if someone were to fall ill in the days before completion, or indeed on completion day, then the solicitors simply won't exchange.  You therefore would not be in breach of contract.  The solicitor is legally bound to advise of any risks, but in this pandemic the general advice has been to exchange and complete simultaneously, to reduce those risks.  There are more risks associated if you exchange a week/month/few days before completion, because once you have exchanged you are then legally bound to complete, whether or not someone subsequently falls ill with Covid.  Unfortunately, a simultaneous exchange/completion means that you won't know whether you will be completing until the day and, of course, you will have already organised removals etc, which may have to be put in storage or unpacked. 

I'm in agreement with whatever protects me the most, neither option is good frankly, but i'd rather not put my deposit money etc at any real risk if they don't think it's currently safe enough to do so. thankfully i'm not really moving out of anywhere that i can't stay for a few extra days so i have no movers etc to book. It's the vendor that does so i can see why they are against leaving no gap. nobody in the chain can agree what to do it seems, had this issue came up from the beginning i'd have withdrawn my offer but since it's gone on for months and in theory we are only a few weeks ago i'm just sitting tight and being patient.