It’s estimated that the pandemic has led to more than £80 billion worth of property transactions being put on hold.

While house moves are now back on the cards again thanks to relaxations in the pandemic lockdown, it’s possible delays could still occur.

Such delays could lead to extra costs and legal issues for both sides. Oliver Bagnall gives his advice on how to minimise these risks.

Coronavirus delays – what do they mean?

In a property transaction, once contracts are exchanged, the parties involved are legally bound to buy and sell the property. This is usually on a fixed date or, in the case of new-build properties, by reference to the date on which the construction of the property is completed.

So what happens when there is a delay? The pandemic has meant there are a number of reasons why transactions could be held up, for instance, delays with the mortgage company, difficulty finding a removal company, or parties being in isolation due to illness or vulnerability.

The law says that such a delay would mean one party is likely to be in breach of contract and could therefore be liable for various costs. A buyer, in the worst case scenario, could end up losing their deposit, which is usually 10 per cent of the purchase price.

Adding provisions to a contract

One way to give yourself some protection from such delays is to ask your solicitor to add provisions into the contract, allowing the date of completion to be extended until the cause of the delay (such as the period of isolation required by government regulations) is resolved.

If the cause of the delay is not resolved within a certain period, the buyer could be given a right to rescind the contract and take the deposit back, which would considerably reduce the risk to the buyer.

Why aren’t we recommending this?

However, as a seller – particularly housing developers – I would advise caution and even to look to refuse such a request from a buyer.

Here are some of the key risks to adding such provisions to a contract:

  • Providing proof of these delaying factors is difficult (for instance, in respect of health conditions), and it may even be necessary to take it on trust. Consequently, there is scope for abuse.
  • If the seller is a housing developer, the deposit is often used to assist with the builder’s cash flow, so returning the deposit can cause difficulties with the construction programme.
  • Buyers could take the view that the housing market is going to be depressed and use the provisions, which have been included in the contract to assist the buyer, to renegotiate on price.
  • Developers require contractual assurance that once a house is built, it will be sold. Removing this certainty affects this business model and could have adverse consequences elsewhere.

While we recommend that sellers do not agree to such provisions, there is a commercial reality which means they may sometimes be necessary to secure a sale.

As such, the drafting of the provisions is critical and expert advice should be sought. WHN has drawn up a contract specifically for housing developers to help mitigate such concerns.

For further advice on this or other property issues, call Oliver Bagnall on 01254 272640 or email him at