Financial Remedies and Moving Home During COVID-19

  • I am in the process of negotiating a financial settlement with my spouse, and we agree that our property should be sold. Should we market the property for sale during COVID-19?

    A choice to make an advance decision
    When assisting people to resolve financial matters arising on divorce or separation, the family home, rental or holiday properties more often than not form the majority of the matrimonial pot to be divided between the parties.  Frequently these assets are sold to enable the parties to purchase their own accommodation in order to meet their housing needs, either mortgage-free or with a smaller than otherwise necessary mortgage. The current pandemic caused by COVID-19 poses the question – what is property now worth, and when/how can it be sold?

    Most estate agents believe it is still beneficial for parties to market a property for sale as many people are at home during the lockdown and will be making plans to move as soon as the Stay At Home rules are lifted. Whilst a seller or purchaser cannot view properties in person, estate agents have the capability to put in place virtual tours so people can, if they want to, make offers to purchase. The concept will then be to complete the transaction and move as soon as the Stay At Home rules are relaxed.

    There are issues with necessary searches – some Local Authorities have suspended local searches and Mortgage offers may be difficult to obtain as surveyors are not allowed into houses. However, Conveyancing solicitors are still able to progress the sale or purchase of a property during lockdown – it is only the actual completion of the transaction that is made difficult by the Stay At Home rules as the guidance issued by the UK Government suggests that people should not be moving home unless “critical”. However, with some local authorities suspending search services, surveyors not being able to visit properties and lenders being reluctant to lend, any progress may be challenging.

  • Can I move house during the current pandemic?

    The Government has issued guidance on moving home during the pandemic and in doing so, attempts to delay people moving whilst the Stay At Homes rules are in place. The guidance doesn’t however suggest that agents or parties hold back on completing a property purchase – this could still happen but the parties involved in the transaction may need to be flexible and wait for the Stay At Home rules to be lifted, before the physical move takes place unless the move is “critical”. A situation where a move may well be possible and compliant with the rules would be if the property a person is moving into is unoccupied, or the property is a new build, which again is unoccupied.
  • Can I obtain a mortgage offer during COVID-19?

    Usual mortgage offers expire after six months, which may pose a problem if completion of the sale/purchase, is delayed. However, UK mortgage lenders and building societies have agreed to extend existing mortgage offers for three months beyond their current expiry date where clients have already exchanged contracts. This would have the benefit of those people retaining the same mortgage rate as the original mortgage offer. There have been numerous reports of mortgage offers being delayed and existing applications being cancelled.
  • I have a financial remedy order which includes provision for an order for sale of a property but I cannot implement the order due to the current pandemic – what do I do?

    It may be possible to agree an extension to the date for sales or transfers of properties and payment of lump sums imposed on a party under the terms of a final financial remedy order. If the other party does not agree, and it becomes necessary to make a court application under the “liberty to apply” rule, courts are expected to grant a request for an extension to deadlines arising because of the current pandemic.
  • I am in the process of negotiating a financial settlement and have had a valuation carried out on a property – is this still accurate?

    Valuations obtained prior to the crisis may no longer be reliable. It may be preferential to wait until the pandemic has resolved itself and then proceed, but many individuals will be keen to make progress and finalise their financial affairs but it depends entirely on the risks that each party is prepared to take in order to reach settlement sooner rather than later.
  • I have recently obtained a financial remedy order, but assets have reduced in value – can the order be set aside?

    If a case has recently settled based on an assumption as to valuation of certain assets, particularly property, and the property market has collapsed, this is a new event, which could invalidate the basis upon which the court order made the order in the first instance. This unforeseen change in circumstance may enable the order to be revisited.

    Currently it is difficult to assess what the long-term impact will be. In some cases, it may be worthwhile to argue for an order to be set aside. Whether or not such an argument would be successful is unpredictable. Please see Anita Scorah’s blog on Barder Events Setting Aside Orders for further information as certain criterion need to be met.

For further information on Financial Remedies and Moving Home During COVID-19, please contact Senior Associate Claire Porter on 01244 305926 or email [email protected]