Can you back out of a house sale due to Covid-19? How can your sale be affected by lockdown restrictions? The ever-changing pandemic has thrown several questions up in the air for the property market. It’s important you know your rights and obligations.
The Covid-19 pandemic has thrown the global economy and property market into disarray. From falling property prices to plummeting markets, we’re facing a wealth of unknowns. But with the unknown comes opportunity.
We’ve put together some information on what Covid-19 means for your house sale or purchase.
Can you back out of a house sale due to Covid-19?
Unfortunately, if you entered into a contract pre- or mid-pandemic, your obligations to that contract will remain.
Many have tried to update force majeure clauses, including the addition of “pandemic” for Contract for Sale. This has not been successful.
There are a number of clauses that state governments have drawn up to accommodate for changing circumstances as a result of the Covid-19 disruption and they also depend on your individual circumstances. Due to this, we recommend speaking to one of our lawyers for more information.
What can you do if you can no longer follow through with a contract?
Instead of cancelling or backing out of the contract, what lawyers can do is draft Death and Incapacity Special Conditions into your contract. This means that if a party to the contract was to pass away due to Covid-19 or any other cause, either party would have the option to rescind (remove) the contract.
Olivia Parsons, our NSW State Manager, says there’s also a number of considerations for people affected by quarantine requirements.
“There are numerous Covid-19 special conditions popping up in contracts which extend settlement by the 14 days a party was forced to isolate, if they had to self-isolate” she explains. This is applied to owner-occupier as well as investment properties. If your property is tenanted and your tenants are required to self-isolate due to Covid-19, the additional 14-day isolation period would be added to the extended settlement period to allow for a safe environment for all parties involved.
The Covid-19 pandemic has shifted the way the property market operates and, at this stage, the future is unpredictable. If you need advice or guidance on how to navigate a contract that’s impacted by Covid-19, you can give our team a call on 1300 932 738.
This article is provided for general information purposes only. Its content is current at the date of publication. It is not legal advice and is not tailored to meet your individual needs. You should obtain specialist advice based on your specific circumstances before taking any action concerning the matters discussed in this article.