How can divorcing parties speed up property sales during COVID-19?
It is said that the housing market is driven by divorce, death and destitution.
On a divorce, property is often at the centre of the dispute relating to the couple’s finances and how these should be divided to enable each party to move on with their separate lives.
Indeed, a great number of financial settlements are structured around what is going to happen to what is often the main asset.
The housing market has been severely impacted by the coronavirus pandemic, which has complicated matters for separating spouses dealing with an already difficult time in their lives.
Indeed, uncertainty as to what might be a “safe” valuation for a particular asset may stall negotiations and cause unwanted delay.
How can the hurdles caused by these unprecedented times be best be overcome, both via legal remedies available through the courts and practical steps one can take in relation to the property?
Valuations are a key aspect to the divorce process; before assets can be divided between the parties it is important to know what they are worth. Otherwise, neither party can safely negotiate a financial settlement.
Where there is a degree of trust and agreement between the parties, it may be possible simply to instruct an agent on a joint basis to market the property for an agreed price. If it is not possible for the couple to agree, they can seek a direction from a judge as to how to proceed.
It may be decided that the best course of action is for one party to provide the other with a choice of, say, three estate agents and the other to select one agent from the three who will market the property.
Another option might be for a number of agents to carry out appraisals and then an average price selected. If it is deemed necessary, a formal application may be made to Court for permission to appoint a single joint expert to undertake a full valuation of the property.
The parties would then usually have leave to ask questions of the expert should they disagree with the outcome of the valuation report.
To ensure that parties cooperate with the process of selling an asset, it is possible to include wording in a Court Order obliging one party or the other to use their best endeavours to ensure that all necessary paperwork is signed and dealt with in a timely manner.
If necessary, a spouse can seek an undertaking (a formal promise to the Court) to cooperate with the sale, a breach of which could involve criminal sanctions. In extreme cases, if one party were to refuse to deal with the signing of a transfer deeds, the Court can step in and Order that the transfer take place; the judge effectively signing the transfer deed.
As is indicated above, a lot of time can pass before divorcing spouses have even agreed on a value for a property, not to mention what is going to happen to that property. If it is eventually agreed that a sale should take place it is likely that the parties will then want this to take place as soon as possible.
Selling a property can be a slow process at the best of times but with the restrictions in place because of the coronavirus pandemic, the concern is that it will take even longer. However, there are steps people can take to try to speed things up:
- Instruct conveyancing solicitors before the property is marketed to start compiling the detailed sales pack that the buyer will expect to see.
- Dig out the necessary paperwork, including planning permissions, building regulation certificates, and guarantees, and for leasehold properties, any landlord consents or approvals. With careful planning, missing paperwork can be obtained and frustrating delays avoided.
- Prepare to market the property, the agents commissioning the photos and filming a virtual tour. With social distancing still in place, it makes sense to utilise the potential of virtual viewings before serious buyers decide to proceed with a physical viewing. Where there is strong interest to justify a physical viewing, the agents are required to follow government guidance on minimising contact.
- Spouses should agree ahead of the sale what fittings and contents are being included, to avoid any confusion with the buyer that might derail the sale.
Simon Burgoyne, office head of Knight Frank Mayfair, adds that “When bringing a property to market the key to a successful launch and marketing campaign is presentation and photography. A decluttered and well-presented property will photograph well and provide excellent images that will ensure maximum online exposure to potential purchasers. Additionally, the importance of correct pricing should not be underestimated”.
Divorcing spouses should also do their very best to present a united front throughout the sale and each understand their next steps to avoid any uncertainty or concern for a buyer.
This article first appeared in eprivateclient and Wealth Briefing on 2nd June 2020.