Coronavirus: Simultaneous Exchange and Completion in Residential Property transactions?
Trying to buy or sell a house during the current “lockdown” conditions can cause more than a few headaches for a lot of people. When discussing your transaction with your conveyancer you may well be told that they are only doing Simultaneous exchange and completions (otherwise referred to as SIMS). So what are these?
Simultaneous Exchange and Completion
This term refers to the fact that you do not “exchange contracts” until the actual “completion Date”. In most circumstances, people like to exchange contracts a few days or weeks before the completion date. Exchanging contracts means that both parties are legally committed to the transaction and the sale or purchase is agreed to take place on the completion date. By doing this, it gives both parties certainty, and you can book removals and get the property ready for that date. With a Simultaneous Exchange and Completion, you do not exchange contracts until the actual day you move, which means that there has to be more trust between the parties as either party could withdraw from the transaction at any point before exchange of contracts, including on the day you were expecting to complete.
What are the downsides of doing a Simultaneous Exchange and Completion?
The problem with doing a SIM is that there is no certainty that the transaction will go ahead until the actual day of completion. This is particularly difficult for people who are selling and buying, and physically moving on the day. Imagine you are sat in your loaded van waiting for the call that the transaction has gone ahead, when instead you are told that someone in the chain has pulled out for some reason and you are going nowhere! Not ideal circumstances.
What are the upsides of doing a Simultaneous Exchange and Completion?
The benefits of a SIM are that they can be done on short notice. In normal circumstances, SIM’s are used mainly when buying vacant properties, there is no chain, and the buyer is not physically moving on the day.
Simultaneous Exchange and Completion during Coronavirus Measures
During these uncertain times, a SIM is the preferred method of completing a transaction. Setting aside the governments law and guidance on the restriction of movement, this method of completion safeguards our clients more than hinders them. By not exchanging contracts until the actual day of completion we do not place our clients in the position where they are legally committed to complete a transaction that they may not be able to complete. If we were to exchange in advance, a multitude of events could happen before completion – our client, or someone in a chain, may have to self-isolate, the government may issue more stringent isolation measures, a smaller firm of solicitors involved in the transaction may not be available due to illness (thinking sole practitioners here – Keebles have circa 200 employees!), etc. So for all these reasons and more, a SIM is the way forward in these difficult times.