After exchange of contracts in property purchase, what happens if someone has COVID-19 on the completion date?

Question

Say I am selling my home to a buyer and also purchasing a house from someone, and the chain of sales goes no further than this (for the sake of simplicity). All house sales are in the UK, where you agree on a date of completion (date of move) and exchange contracts prior to completion to make this legally binding. If anyone pulls out of the process after exchange of contracts, then there is a contract breach, and this can be particularly problematic for a buyer pulling out. An answer here suggests some of the potential knock-on effects of not completing a property transaction after exchange of contract.

At the current moment in time, the UK government has guidelines that instruct people to isolate for 10 days upon suspicion of COVID-19 symptoms or a positive COVID-19 test. From the government, it suggests you risk a £1000 fine for breaching self-isolation (as far as I can gather from the website. I'm unsure if there are further penalties).

Let's say we get to 5 days before the transaction completion date stated in the contracts, and the person at the top of the chain (the person I am buying from) makes me aware that they have got a positive test for COVID-19 and have to self-isolate for the 10 day period. This would overlap with the completion date set out in the contract and mean that they can no longer complete on that date if they are to follow government guidelines.

Now, I presume that all parties can mutually agree to either ignore the date (complete but remain put where they are) or rescind the contracts and set a new completion date. However, can someone in the chain refuse to do this and force through the completion date despite the COVID-19 guidelines? As an example, could the people purchasing my property just say they don't really care about my purchasing transaction and still want the completion date honoured? Would I have good legal standing to refuse them based on the circumstances, or would I still be liable to a lawsuit if I refuse the transaction?

Answer 1

too long, didn't read: You would be liable for a claim for breach of contract. The self-isolation guidance is voluntary in this scenario and in any event the relevant legislation allows you to leave to "fulfil a legal obligation" such as completing a contract. Therefore, the court would probably give judgment for the claimant on the facts you've given us.

Your requirement to self-isolate

The Government guidance for self-isolating on suspicion of, or a positive test for, coronavirus is entirely voluntary. You are only subject to legal obligations to self-isolate, and the associated risk of a £1,000 fine, if you enter England from a non-exempt country under Clause 4 of the Health Protection (Coronavirus, International Travel) (England) Regulations 2020.

Therefore, in the given situation, you would not be legally obliged to remain within the property for the entirely of the quarantine period. You would be able to seek alternative accommodation.

Indeed, even if you were subject to Clause 4, subclause 9(c) explicitly states:

(9) During the period of their self-isolation, P may not leave, or be outside of, the place where P is self-isolating except—

(c) to fulfil a legal obligation, including attending court or satisfying bail conditions, or to participate in legal proceedings,

Fulfilling the terms of the contract of sale would count as needing to "fulfil a legal obligation" so you would not be fined under the legislation and it would not be a defence to any lawsuit.

The court's view

Given that the self-isolation guidance is voluntary and, in any event, the relevant legislation has the "legal obligation" escape hatch, the court would likely treat this as a standard breach of contract and find that you had no exceptional circumstances that caused you to breach the contract by failing to vacate the property on the day of completion.

Conclusion

You would be open to a claim for breach of contract. Your defence would be unlikely to succeed on the merits and the court would likely side with the claimant.

Answer 2

The same thing that happens if you breach your contract for any other reason

In English law (and all other Common law derived from it) there is no concept of force majeure as a right at law. Where it exists, it is a creature of the contract, that is, what is a force majeure event and what the consequences are must be spelled out in the contract.

While it is inherent in European civil law, it is unlikely that for a contract entered in the recent past, that COVID-19 would be a force majeure event anyway because it is no longer something unforeseeable and hasn’t been for many months.

The usual consequences for someone breaking their contract are damages and a right of termination for the innocent party.