TMCP would like to draw Managing Trustees attention to the new guidance available on residential conveyancing transactions during the COVID-19 crisis. The Government has issued guidance for the public and industry in relation to home buying and this has prompted the Law Society to follow suit and provide guidance for Solicitors. Please find links below to the guidance together with articles from the Law Society and Law Gazette which the Managing Trustees may also find useful:
- Government advice on home moving during the coronavirus outbreak
- Guidance to conveyancers advising clients on house moves
- Covid-19 and residential conveyancing transactions
- Extra guidance for conveyancers stuck in coronavirus lockdown
The overriding point made within the guidance is that moving during the current crisis should be postponed where possible. For the Methodist Church this is particularly difficult as we are entering into the time of year where Manses are being bought and sold in time for new ministerial appointments and those ministers moving through stationing.
However, there is no need for Managing Trustees to withdraw from transactions. The same can still progress although they may be delayed and must, as advised, be conducted in a way that prioritises the health of individuals, such as members of the Local Church or Circuit, volunteers and the general public. We all need to ensure we are following Government guidance to stay at home and away from others at all times, including the specific requirements for those who are presenting symptoms or are self-isolating.
The advice is dependent upon what stage the sale or purchase has reached.
Where contracts have been exchanged
If Managing Trustees have already exchanged contracts and the property which is being purchased is already vacant then the transaction can, in theory, continue. However, it is recommended, that where possible the move should be delayed unless it is absolutely critical. Please also pay particular attention to the advice on home removals and guidance issued by Public Health England and Public Health Wales.
Current guidance appears to allow people to move house where:
- properties are not occupied (with cases (or suspected cases of) coronavirus (COVID-19);
- occupants are not self-isolating; and
- all parties abide by social distancing requirements.
This is a very high bar and it may not be possible for the parties to comply.
Where the property is currently occupied, the advice is to try and agree alternative dates to move e.g. until after the “stay-at-home” measures against coronavirus have ended.
The Managing Trustees should instruct their solicitor as soon as possible to draft a document to vary the contract and allow for a change in the completion date. It is likely that a two-step process will be needed:
- To allow the move to be delayed until the end of the current stay-at-home period and the restrictions on social distancing, and
- The flexibility to extend the timescale if Government restrictions are extended.
The clause should also say that once the restrictions end there will be a period of time agreed before the actual move to enable everyone involved in the process to get prepared. It is suggested that this may be an additional one or two weeks. The timescale should be sufficiently long enough to allow the parties to find removal firms and arrange the move especially because there could be a greater demand for removal services, amongst others, once the restrictions are lifted.
There are other considerations for all parties, such as where sales and purchases involve mortgages (fluctuations in market values could affect a mortgage lender’s decision to provide the agreed purchase price) or a change in one of the party’s employment status which affects their ability to complete the transaction.
As usual the document varying the contract would need to be sent to TMCP for approval before it is agreed. TMCP are working alongside colleagues on the panel on precedent wording which can then be adapted for each individual transaction.
However, if moving is unavoidable for contractual reasons (whether the property is occupied or not) and the parties are unable to reach an agreement to delay, Managing Trustees must follow the advice on social distancing and hygiene to minimise the spread of the virus. See Public Health England’s guidance for households with possible coronavirus (COVID-19) infection. Amongst other things Managing Trustees will need to arrange for a complete deep clean if a minster is moving to a newly purchased manse and must follow the advice given for decontamination if they know, or have reason to believe, that the previous owners/occupants, or someone which they had been in contact with, has coronavirus.
Where contracts have not been exchanged
Managing Trustees can continue with the transaction and this time should be spent working through with your solicitor on any issues with title, arranging searches and agreeing the contract. For the reasons given above Managing Trustees should think very carefully before agreeing to exchange contracts.
This is still the case even if you agree that the completion date will be months in the future. When contracts are exchanged the parties are legally bound to complete and given the difficulties that could arise with the financial situation of some buyers and sellers this could put the whole transaction in jeopardy. As a Church we will be conscious of the various pressures on those individuals who we are contracting with. For instance third party buyers/sellers employment status may be unclear and this could affect their ability to finance transactions. There may also be knock on effects for Local Church and Circuit finances because lettings have been suspended.
If Managing Trustees do decide to exchange contracts then before doing so they should ensure that their solicitor has included a clause in the contract to deal with any ongoing risks caused by the virus.
Transactions will be governed by the provisions in the contract unless the parties agree otherwise. Managing Trustees should be aware that if completion does not take place after contracts have been exchanged due to COVID-19, the parties will be in default, unless a document has been agreed to vary the completion date. The contract provisions relating to default will also probably apply unless the non-defaulting party takes a ‘good faith’ view. Notices to Complete, penalty interest and deposit loss may all come into play which is why legal advice now, before proceeding any further, is crucial.
Possible lettings for incoming ministers
The current restrictions on movement may mean that renting a property for an incoming minister will be considered appropriate. TMCP and the Connexional Team are producing a series of FAQs to assist Managing Trustees who are involved with or who are considering letting in the current climate. Please carefully consider the FAQs as the same may answer your most common questions. If you cannot find the guidance you are looking for in the FAQs then please contact TMCP and we will endeavour to assist you through this difficult time.
Managing Trustees should continue to obtain the professional advice of their solicitors and ask them to make clear the options that are available in the current circumstances and point out the likely consequences for each option.
Each transaction will be considered on its own merits with different implications and outcomes. Unfortunately the situation is unprecedented and there’s no certain and fixed answer. TMCP, the Connexional Team and the Panel of Solicitors are here to help and guide you through this difficult and challenging time. We are reviewing the situation daily and updating our guidance accordingly. We will continue to notify Managing Trustees through our Newshub of any changes. If you have not already signed up to the News Hub you can do so here.
If you have any queries in relation to the guidance in this document please contact the TMCP Legal Team for further assistance.