The completion of a property sale and/or purchase may be at risk of not completing on time because of an event caused by COVID-19. Whilst it is likely an existing contract does not deal with such an event, supplemental agreements can be entered into to add new provisions to existing contracts, and new provisions can be included into contracts not yet exchanged, to mitigate this risk.

Without a specific provision in a contract, there is a risk that the party who cannot complete on the specified completion date must pay compensation for late completion. Once the completion date has passed, with no completion, the party who is able to complete, can serve a notice to complete on the defaulting party. If such a notice is served on the buyer, there is a risk it will lose its deposit if it cannot comply with the completion notice.

The situation is changing daily; Government measures may be introduced at short notice; and people may be ill / have to self-isolate with little or no warning; and there is no ‘one case fits all’, but most parties will not want the contract to terminate immediately for reasons outside of its control, and provisions can be included to keep the contract alive if there is a delay to completion, or difficulty complying with other contractual provisions due to a pandemic.

We will continue to publish updates as and when the situation becomes clearer and further Government advice is published.

For advice and support please contact the Commercial property team