APSL Issue Force Majeure Guidance For Coronavirus

The Association Of Property Support Lawyers (APSL) has issued some guidance to help those in the sector with regards to the coronavirus and force majeure.

The APSL’s Guide to amending property contracts (residential or commercial) has been designed to help any legal professionals by providing them with practical solutions to the current Covid-19 situations rather than each professional creating their own bespoke solutions.

The full guidance can be found here.

Two key points in the guidance can be seen below.

Managing the impact of coronavirus delays on contracts

It is hard for anyone to know the impact of the lockdown and medical needs on any other party to their deals now or in future, especially as lockdown is released gradually by sector or region.  The rules and guidance for the virus keep changing and we are likely to be in affected for several months.  We have been asked by colleagues for different solutions where the parties wish to preserve a deal but protect their rights during a delay.

The APSL have provided a short form (delays completion date only) and a long form (extends deadlines for conditional contracts e.g. to get planning or do works before completion as well as the completion date).   We suggest that any party affected by the virus can inform the other party of a delay and explain how they are affected.  There is a dispute resolution process if required and a long stop date.  The definition of Coronavirus Event is key and will always need to be considered carefully.  There is also a good faith requirement which follows government advice during the pandemic.

Chapter 2 also contains suggested wording for agents looking to include coronavirus flexibility in heads of terms or a memorandum of sale.

Chapter 4 contains a simple variation of an existing contract to agree a fixed suspension period so the parties can pause and regroup in disruption.

Making sure exchange and completion works

Legal professionals working from home means we need to amend the practical arrangements relating to exchange and completion.  The banking and postal services are still operating but cheques are almost impossible and services may be slower.  We have therefore amended the Law Society’s standard undertakings for exchange and completion to allow more time and to recommend online banking payments rather than cheques.

These affect the exchange formuiae which commit buyers and sellers to contracts and the Code for Completion by Post and makes rights and obligations clear and suit the circumstances.  The City of London Law Society has made these available.

About APSL

Both guides were created by a volunteer working group from the Association of Property Support Lawyers and a full list of those involved is in each document.  The members of this organisation are experienced property lawyers who discuss issues affecting property transactions in England and Wales and identify or develop best practice.  We support lawyers working directly with clients in our various law firms.  We are therefore accustomed to taking a wide, long term perspective.  Not all firms have professional support lawyers like us available and we wish to share beyond the PSL network for the benefit of all in the property market.

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