288 thoughts on “Dealing with property auction issues”
Do you know of any cases where an RTM claim has been served on the legal freeholders after they exchanged at auction to new freeholders but prior to their completion.? The auction info specifically said the freeholders had the right to manage but the claim was served before completion.
Apologies if this is way outside your ‘comments’ brief.
I would need more details of the claim to advise properly, but I assume it has been made by the leaseholders and would need to be amended to name the new freeholders and re-served.
Please contact our Litigation department to discuss this further.
Hi, I brought a property beginning of May under auction. I was then told that because it was under shared ownership it needed to go through a process called staircasing. We then received draft contracts and the deadline for the 56 days to be up was 8th of September. It is now the 31st of August and I have been told due to Orbit and some other things that I will not be completing for at least another month due to complications at the sellers end. By the sounds of it the property should never have been up for sale via auction. What are my rights with compensation because I paid over £7k for an auction property that is taking a lot longer then it should take and is taking the same amount of time a normal property would take? How can I go about compensation? I need a bit of legal advise please
Thank you for your comment. Buying property at auction is first of all a very high risk activity and buying a property on shared ownership is also not straightforward.
Based on what you have said, and without having had sight of the contracts or the terms of the auction at which you bought the property, both of which may affect your position and so should be consulted in any event, it appears that it is the seller who has failed to complete. Being the top bidder at the time the hammer falls on the auction contractually binds you to buy and the seller to sell the property in question on the terms set out in the draft contracts provided. These are usually extremely restrictive and placed mostly in favour of the seller. However, if the seller fails to subsequently complete on the contract within the time allotted, and absent any variation between the parties of the contract to that effect, he is in breach.
You therefore will have a choice of remedies. Either you treat the failure to complete as a repudiatory breach and seek to pull out the contract and demand the repayment of any deposit together with the losses of and occasioned by the failure of the seller to complete, or you can serve Notice to Complete and, assuming you are ready, willing, and able to complete on the purchase, subsequently seek from the Court an order for specific performance of the contract requiring him to complete and also to pay your losses of and occasioned by his failure to complete. Essentially you therefore have to consider whether or not you want this property.
Of course, this all will depend on the terms of the auction and the terms of the contract of sale which will affect your rights in this regard. In addition to get the specific performance being “ready, willing and able” means having funding in place either in cash or a definitive mortgage offer that would in theory mean that if the completion date were to be set for tomorrow, for instance, you would be in a position to complete immediately.
Hi – I recently bought a plot of land in an auction. I have since found that there are failed planning applications for the plot. The plot was named differently in the auction sale to the name used on the planning applications, and I have only become aware of them after my successful bid. Would this be a case of misrepresentation, and could I cancel the purchase on these grounds? I have paid a 10% deposit but not completed on the sale. Thanks.
We have not come across an issue like this before but fundamentally, if you thought you were purchasing a different piece of land than you were, there may be scope to rely on the terms and conditions of sale to rescind the agreement.
It may arguably be a misrepresentation if you relied on the description of the property to undertake enquiries to find out whether or not there were failed planning applications, but it is an arguable point. It was not so much the factually inaccurate description of the property which you relied on when entering into the contract, but the fact that you were unable to identify planning applications.
There could be a basis to claim negligent misstatement, but this could be difficult, as the terms and conditions of sale will no doubt look to limit liability in this respect and there would normally have to be some sort of duty of care between the auctioneer and the bidder, which is not ordinarily the case.
Do feel free to get in touch if you would like to consider the matter in more detail.
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Do you know of any cases where an RTM claim has been served on the legal freeholders after they exchanged at auction to new freeholders but prior to their completion.?
The auction info specifically said the freeholders had the right to manage but the claim was served before completion.
Apologies if this is way outside your ‘comments’ brief.
Thank you for your comment.
I would need more details of the claim to advise properly, but I assume it has been made by the leaseholders and would need to be amended to name the new freeholders and re-served.
Please contact our Litigation department to discuss this further.
Hi, I brought a property beginning of May under auction. I was then told that because it was under shared ownership it needed to go through a process called staircasing. We then received draft contracts and the deadline for the 56 days to be up was 8th of September. It is now the 31st of August and I have been told due to Orbit and some other things that I will not be completing for at least another month due to complications at the sellers end. By the sounds of it the property should never have been up for sale via auction. What are my rights with compensation because I paid over £7k for an auction property that is taking a lot longer then it should take and is taking the same amount of time a normal property would take? How can I go about compensation? I need a bit of legal advise please
Thank you for your comment. Buying property at auction is first of all a very high risk activity and buying a property on shared ownership is also not straightforward.
Based on what you have said, and without having had sight of the contracts or the terms of the auction at which you bought the property, both of which may affect your position and so should be consulted in any event, it appears that it is the seller who has failed to complete. Being the top bidder at the time the hammer falls on the auction contractually binds you to buy and the seller to sell the property in question on the terms set out in the draft contracts provided. These are usually extremely restrictive and placed mostly in favour of the seller. However, if the seller fails to subsequently complete on the contract within the time allotted, and absent any variation between the parties of the contract to that effect, he is in breach.
You therefore will have a choice of remedies. Either you treat the failure to complete as a repudiatory breach and seek to pull out the contract and demand the repayment of any deposit together with the losses of and occasioned by the failure of the seller to complete, or you can serve Notice to Complete and, assuming you are ready, willing, and able to complete on the purchase, subsequently seek from the Court an order for specific performance of the contract requiring him to complete and also to pay your losses of and occasioned by his failure to complete. Essentially you therefore have to consider whether or not you want this property.
Of course, this all will depend on the terms of the auction and the terms of the contract of sale which will affect your rights in this regard. In addition to get the specific performance being “ready, willing and able” means having funding in place either in cash or a definitive mortgage offer that would in theory mean that if the completion date were to be set for tomorrow, for instance, you would be in a position to complete immediately.
Please feel free to telephone our litigation team at the Braintree office if you are seeking additional advice.
Hi – I recently bought a plot of land in an auction. I have since found that there are failed planning applications for the plot. The plot was named differently in the auction sale to the name used on the planning applications, and I have only become aware of them after my successful bid. Would this be a case of misrepresentation, and could I cancel the purchase on these grounds? I have paid a 10% deposit but not completed on the sale. Thanks.
We have not come across an issue like this before but fundamentally, if you thought you were purchasing a different piece of land than you were, there may be scope to rely on the terms and conditions of sale to rescind the agreement.
It may arguably be a misrepresentation if you relied on the description of the property to undertake enquiries to find out whether or not there were failed planning applications, but it is an arguable point. It was not so much the factually inaccurate description of the property which you relied on when entering into the contract, but the fact that you were unable to identify planning applications.
There could be a basis to claim negligent misstatement, but this could be difficult, as the terms and conditions of sale will no doubt look to limit liability in this respect and there would normally have to be some sort of duty of care between the auctioneer and the bidder, which is not ordinarily the case.
Do feel free to get in touch if you would like to consider the matter in more detail.
Thanks Mark – this is very helpful.