With coronavirus here for the foreseeable future, there is growing concern in the residential property market about the potential impact on buyers and sellers if they fall ill during the conveyancing process. The reality is that the law offers little leeway for ill health.

If exchange has already taken place and either of the parties finds it difficult or impossible to complete, for example because they have to self-isolate or removal companies cannot operate and so may not be able to sign a transfer in front of a witness , the contract will invariably be breached. What affect does this have on the contract? The standard contractual position is that the person who can complete will serve a notice on the person who cannot complete allowing them a further 10 working days to complete. This two week period may be sufficient to allow for the isolation period to pass so that completion can take place. During that period, however, interest will accrue on the purchase price against the party who cannot complete, usually at a rate of 3% or 4% above the base rate until completion takes place. The defaulting person will also be liable for costs incurred by the other party due to the failed completion eg having to move out and live in a hotel, putting goods into storage, etc, to the extent that the interest does not cover those losses. If completion still does not take place, the person who is able to complete can terminate the contract. If that person is the seller, they can keep the deposit. If that person is the buyer, they are entitled to have the deposit returned.

Lawyers have been looking at whether principles such as ‘force majeure’ or ‘frustration’ can operate to vary legal rights. The consensus at the moment is that such principles are unlikely to apply.

There is no full-proof way of ensuring that a transaction is not completely derailed by the effects of coronavirus but if contracts have not yet been exchanged then the parties can agree to include a clause in the contract which allows for a delay should the coronavirus make it impossible for a party to complete. Even that is not a completely satisfactory stance because although the parties’ position under the contract may be protected, they may be unable to complete still because, for example, their mortgage offer expires whilst they are quarantined or self-isolating. Any such provision would need to be carefully drafted and considered by all parties (including the wider chain) to be effective.