The message at the moment is simple: #stayhome. But what if you are trying to navigate buying or selling property during coronavirus? There are many reasons beyond low interest rates that leave some people with no choice. Those who have already sold their home or can no longer pay their mortgage are particularly affected. Other contributing factors are death, divorce and debt. It’s a stressful time right now for the whole world, but moving house during a pandemic adds another layer of complexity.
Many restrictions have been imposed on Victorians, and there’s a possibility that it will get worse before it gets better. Some of the current impacts on buying or selling property during coronavirus are set out below. Please note that government policy is constantly shifting, often with little to no warning. The legal ramifications are not always clear. Accordingly, this list is not definitive and is subject to change.
- No public auctions: from 26 March 2020, only online auctions are permitted. This may dismay sellers hoping that the pomp and passion surrounding traditional auctions will drive up prices, and may deter buyers due to an unknown forum and technical glitches.
- No evictions for tenants in financial distress: from 29 March 2020 there will be a 6-month moratorium for tenants unable to pay rent due to the impact of Covid-19. Details are still unclear, but it may derail the fate of contracts that are subject to “vacant possession” if tenants can’t be evicted.
- Private inspections allowed: following a brief government ruling against inspections of tenanted or occupied properties from 10-13 April 2020, they have now clarified that inspections with an agent and one other person are in fact allowed.
- Loan uncertainty: financial approval is currently slow with many lenders. Some are even cancelling loans that have been previously approved. If your contract is not subject to finance, purchasers may be left in the lurch.
It’s important to realise that despite the above restrictions, in most cases settlement will still be able to proceed. Electronic conveyancing has been in place for some time now. It is not reliant on physical contact and can be done remotely. However, this means that you may be required to settle even if you cannot physically move house, for example, due to illness, self-isolation or quarantine. Currently, moving house is allowed, but Stage 4 restrictions may restrict this in due course, as in the UK and NZ.
The rapid onslaught of both the virus and the consequent legal restrictions mean that very few contracts specifically address the situation. Many parties are seeking to move settlement forward to avoid any future impediments to completing the contract. If both parties are impacted, then an agreed resolution is possible. Otherwise, you may be in breach of the contract if you cannot settle on time.
Please obtain legal advice that is specific to your circumstances, as the situation is changing all the time. As a virtual law firm, I’ve been working remotely since before it was cool. All of my services are done online or over the phone, so it’s business as usual at Prime Property Lawyers!
Aliza Taubman is the Principal Solicitor at Prime Property Lawyers
Thinking of buying or selling a property in VIC? Contact us for more information. Buyers get your first standard contact and section 32 reviewed for FREE!