Corona Clauses and the process of buying a house
It was a strange sight this spring and early summer with ‘FOR SALE’ boards not popping up all over and estate agents' offices closed. Many buyers dreaming of more outside space, or spotting the ideal house on daily walks turned to online browsing and virtual viewing.
What about those in the process of buying a house?
No doubt in the early days of lockdown there were a lot of worries about the recovery of the property market. However, house sales and property purchases appear to have sprung back into life with sales for the UK on June 10th recovering 92% from an early March low of less than 10% according to Zoopla, and buyers and sellers are returning to estate agents.
With news of a potential second wave and local lockdown restrictions being enforced, there are likely to be some changes to the property market to support the process of buying a house, one of these could be a potential coronavirus clause.
What are coronavirus clauses?
‘Coronavirus clauses’ were introduced during the early part of the pandemic, what they essentially outlined was that if a party contracted the disease and could not progress with their housing move, or had a mortgage offer pulled then completion was allowed to be delayed, or in some cases they were able to pull out of the deal entirely without incurring any penalties.
“These so called ‘corona clauses’ do bring with them an element of uncertainty into the house buying contract but in the early days they kept house moves on track and gave some degree of flexibility and confidence to both parties,” said Head of Residential Property Solicitors at Pearson Solicitors, Victoria Marshall.
“We have seen some recovery locally, house moves that had stalled back in March were straight back on, in fact the night before restrictions were due to be lifted Pearson Solicitors had clients emailing to find out what could be done with their move,” added Victoria.
“One change we have noted is that clients are anxious and indeed happy to speed up the whole process. The old model of a period of time between exchange and completion is no longer as valid as it was and in fact some people want to do it on the same day. This is not always possible with new builds where sometimes it can be weeks if not months between exchange and completion, but many of our clients now want to just get on with it and enjoy their new home.
“The corona clause can be a double edged sword, certainty for one side and unease for the other, but as we ease towards a new normal they may be here to stay,” she added.Subscribe to our newsletter
Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.
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