What is a Simultaneous Exchange and Completion (and is it the right choice for my client?)


Caroline Adams, Marketing Manager

Now we are entering the second lockdown in the UK; your clients will need to consider whether they still plan to continue with their home move. Property moves can still go ahead under the new rules; however, we understand that lockdown brings a lot of uncertainty. I, therefore, spoke to our Head of Legal Practice, Samantha Kelly, to discuss what options your clients have when it comes to moving home in lockdown.

Now that the UK has entered a second lockdown, what does that mean for those who are planning on buying/selling a home?
At Simply Conveyancing, we are completely prepared for this second lockdown. We reacted extremely well to the first lockdown, and we have learnt and put measures in place to be even more prepared this time. It is important to note that home moves can still go ahead even though we are in lockdown by following government guidelines.  As long as none of the chains is self-isolating due to symptoms or exposure, the move can proceed.

If you are currently buying or selling your home and you have instructed Simply, we will be getting in touch with you over the course of the next few days to discuss your options and whether you are still planning to go ahead with your move. For those customers who have already exchanged, you are contractually obliged to continue with your move; otherwise, you may be open to legal action from your buyer/seller and may lose any deposits; however, it is possible to subject to agreement from all parties to vary the terms of the original contract if lockdown prevents you moving on the planned date.

So what are the options for those clients who wish to go ahead with their move?
There are three options for clients who plan to go ahead with their move, all of which have pros and cons.

Simultaneous Exchange and Completion
You may read about this a lot in property press. A Simultaneous Exchange and Completion (a SIM) is when all parties in the chain will agree on a date for the exchange and the completion to happen. Usually, we recommend that there be at least one to two weeks between exchange and completion. With a SIM, both happen at the same time. The pro’s to this is that the property hasn’t exchanged until the day, so there is no contract in place and can easily be changed and moved based on various circumstances.

There are risks to a SIM as you do not benefit from an exchanged contract before the moving date, meaning that the other parties in the chain could drop out at any time.  Also, if you have booked removals and the SIM does not go ahead, you may be liable for the costs of this should the company not be able to change the date of your completion, so advisable to discuss flexibility with removal companies when booking.

The benefit of a SIM is that if for any reason you or another party cannot move on the planned date, then you are not liable for any costs or risking your deposit as no contract has exchanged.   If SIM’s are well planned with all Lawyers in the chain, they can happen smoothly and may be the right choice for you.

Exchange On Notice
This is a frequently used method in conveyancing, particularly with new build properties.   When contracts exchange instead of having a fixed completion date, completion can be agreed on “7 days’ notice” as an example meaning that if lockdown measures prevent a move, the completion date can wait until all parties are ready by giving 7 days’ notice.   We can also limit this with a long stop date, so for example, “7 days’ notice but no longer than 31st January 2021”, and we would seek for the contract terms to ensure that if completion did not happen by the longstop date that no costs are incurred.

This puts the contract for sale in place and sets out clear timelines that everyone agrees with but leaves flexibility if circumstances change, such as self-isolation. It is also worth noting that if the move cannot happen by the long stop date, contracts can be reissued, and this date can be changed – the nature of these types of exchanges is that they are very flexible and useful for those moves that have much longer chains.

The Covid Rider
A Covid Rider is a clause that is added to the contract of sale and must be included in every contract in the chain if it is to be enforceable. The Rider would be placed within the contract if the client would like a traditional exchange and completion and protects them should any Covid related circumstances mean that they cannot move after completion. As mentioned, the clause must be added to every contract in the chain; otherwise, it is not enforceable, and if the property move were to fall through after exchange, deposits would still need to be paid.

Since lockdown, there have been many Covid Riders drafted, all with different clauses and terms. We now have a rider that has been agreed by some industry bodies that we are currently using at Simply.

Which method of Exchange would you recommend?
As a Conveyancer, our role is not to decide for our clients but to give advice on the various options so they can make an informed choice to suit their needs and circumstances.   Clients should take comfort in that we have many options available to them, and no matter what situation they are in, we can get them moved, and they will be protected should the worst happen.

What advice would you give to agents at this time?
Be patient with clients and become educated with these options; try and steer clear of pushing for a traditional exchange as this could panic clients who then may withdraw.   Clients will have many questions, and home moves are a stressful time anyway without Covid thrown in. Be positive when talking about other options such as a SIM.  Moves can go ahead, and we have the steps to protect them; we must adapt our approach to ensure Clients feel comfortable.  The best practice is to outline all the options and let clients chose a course of action that is best for them.

We are always available to support both clients and agents, so if you have any questions at all, please do not hesitate to contact the acting lawyer on your client’s file.

For more information about how you can partner with Simply, visit our website at estateagents.simplyconveyancing.co.uk or get in touch with our Sales & Marketing Director, Vicky Quinn-Campbell, at vquinncampbell@simplypropertylawyers.co.uk