288 thoughts on “Dealing with property auction issues”
We bought a property at auction. Unfortunately we made a rookie mistake and didn’t do a survey or get a solicitor to review the legal pack. We were aware of some damp in the basement but didn’t anticipate significant problems. We have found out that damp is significant and the lender have insisted all work is done before mortgage is offered. However we are also aware that regularisation work was not completed so we suspect other building control issues might emerge. We cannot do the work until completion and we cannot afford a bridging loan. We will have to pull out. I understand we will lose our deposit and have to pay auction and solicitor fees. The market is now relatively stable since December 2022 so I cannot see how they can claim further damages. Is there anything else we might be liable for ?
Two days ago. I won bidding in future auction company. But I think i did not bid the final price. The other trigger to let me bid higher prices.I asked future auction company to show me the bidding records. They didn’t. They said that system show is me. I didn’t pay deposit. The future auction company chasing me to pay for it. If not.asking seller’s solicitors to legal procedures. After auction. I found the property some problems. The auction didn’t show the property planning. And they didn’t gas appliances. So it is not suitable for my planning. In this situation, could i withdraw my bidding? Actually i have emailed the auction company in the same day to refuse the bidding. But the auction company threatening me to legal procedures. What can I do now?
There is no general obligation on a seller or auctioneer to disclose information about a property. There can be a duty to disclose latent title defects but this does not sound applicable here. Latent defects are things that someone could not discover which have a negative impact on the legal title to the property – this would not include anything that is reasonably discoverable on inspection of the property or a public register.
Planning applications and gas appliances are things that could be discovered on a proper inspection. If the buyer is not given the opportunity to undertake such inspections, then it is their decision whether or not to proceed with the purchase absent the information that they want or need.
We cannot provide legal advice on our website, if only for the fact that we do not know the full extent of the matter nor have we had sight of relevant documents. However, unless the seller has actually said something that is misleading (as opposed to simply saying nothing at all and allowing the buyer to proceed on their own assumptions alone), the buyer may have contractually agreed to purchase the property and may become liable to the seller for certain sums if they do not proceed with that purchase, the most usual being the forfeiture of any deposit. If a deposit has not been paid, then the seller would normally acquire a right to sue the buyer for breach of contract in that sum.
Hi We have purchased a property at auction and found out it has a major damp problem, potential to be up to £30,000 + It is a ground and basement flat. We then found out that building regulations have not been signed off and there could be major issues with the building work. Can we withdraw from this purchase. We have already put down a deposit of £50,000. The bank with no lend until remedial works are done and they don’t even know about the building regs issue yet. Help !! not sure what the total cost of the works will be. I feel that this was mis-sold as a 3 bed flat when it has not passed regulations yet.
Thank you for your comment and we are sorry to hear of the circumstances that you are in. Whilst of no real consolation for you, we do regularly see situations where individuals have bid on property only to discover that there is an issue significant enough that a lender will withdraw their mortgage offer.
In these circumstances, whether or not there is any prospect of withdrawing from the transaction does depend on the contractual terms agreed between the parties. Normally, auction terms and conditions are such that all of the risk is placed on the buyer to undertake their own enquiries. If they are not given the opportunity to do this, then the buyer has to decide whether or not to proceed with the risk of purchasing the property and there being something wrong later.
Unless it can be said that you are misled by the seller (and often this needs to be deliberate rather than accidental because of the auction terms and conditions) there may not be much that can be done.
However, if you would like to consider the position in more detail, please do feel free to get in touch.
In October, I won a property via auction which I viewed in September and paid the reservation deposit as required by the auction house. The house was in good order when I viewed the property in September with no obvious damage.
In late November and early December I instructed some survey work. Which highlights a collapsed ceiling which wasn’t there when I viewed the property. I informed my solicitor and the auction house and they told me they informed the seller who is instructing contractors to repair the ceiling which wasn’t like that when the property was advertised and when I viewed it.
In early January the seller’s solicitor’s confirmed that the repair work was completed by the seller himself and are unable to confirm the extent of the repair or provide guarantee for the work done.
I went to the property with 3 different contractors who all confirmed that the repair work is subpar and highlighted another area in the property where the ceiling is drooping and will need repairing. Again this wasn’t like this when I viewed the property.
The seller is refusing to make good the repair with professional contractors or reduce the price to reimburse me for the cost of the repair. The quote is £2550 for the repair.
I don’t know what to do and my reservation deposit is at stake here. I thought that the seller would have to maintain the property in the state I won the bid on.
Can a buyer pull out of the sell and get the reservation fee back based on the fact that the property is not as it was when viewed and won at auction? And given the seller can not guarantee the work done there are potential safety risks?
The basic position here is that the terms of the contract are going to be very important. As a starting point, we would need to consider these in detail as to what the position is with respect to subsequent events. Certainly in a “traditional” conveyancing transaction where there is an exchange and then completion, the terms of the contract will dictate who it is that needs to maintain the property and insure it.
There may be a basis of claim here for misrepresentation, but this would involve a good consideration of the facts of the matter. Sometimes there is an obligation to update the purchaser when there are significant developments, however this will depend on the terms of the contract. With respect to misrepresentation, sometimes there is a basis to claim this because the previous representation has become untrue. In context, if the seller gave you the impression of the property being in a particular state and allowed you to continue under this misapprehension, knowing that it was not true, there might be a basis of claim here.
What you should be aware of however is that if the value of your claim is below £10,000, it may end up being dealt with in the small claims case management track. This is colloquially referred to as the “small claims Court”. Generally speaking, it is not possible for the parties to recover the legal costs that they incur in the small claims Court. With this in mind, it would be important to consider whether or not it is cost effective to pursue a claim.
If you would like to consider the matter in more detail, please do feel free to get in touch.
Hi. What if I bought a land and did not read the legal pack carefully and missed the fact the address and postcode on the Groundsure homebuyer report and also the drainage report legal pack was different to address on the TR1 & the plot of land I bought ?
Thank you for your comment. Broadly, if anyone has made an error, it cannot really be said that this is someone else’s fault.
Having said this, sometimes the fact that the “truth” can be discovered had the contract or other documents been properly checked is not a defence to a claim for misrepresentation; much would depend on the context and factual matrix of the matter.
We can’t give specific advice on our website, but broadly, in any sort of claim “causation” is important to prove. Put another way, it is necessary to show that the defendant “caused” the loss to the claimant. If the defendant did not cause the loss, it’s hard to see how they could be held liable for it.
Hi. Bought a house in GoTo auction. Paid nearly 6k buyers premium. Was a committed buyer and was waiting nearly 7 months to complete. Turns out seller didn’t have land registry sorted and sell fall through. Lost over 10k for legal fees, removal, storage . Had to move abroad and our daughter wasn’t able to go to school due to lack of permanent address. What are my rights? Who is eligible for damages?
Thank you for your comment and we are sorry to hear of this.
It is somewhat drastic to have to move abroad and likewise, it is difficult to see how any breach of contract or misrepresentation on the part of the seller, so far as there is any, would render them liable for such losses. Unless it was expressly made clear that this would be a consequence for you when you entered into the contract, damages for such losses might be considered too “remote” because it is difficult to see how the seller could have seen that happening.
In terms of your rights, this depends on the terms of the contract you entered into. Certainly most people would expect a seller of property to have the right to sell that property, if this was the issue. However, it isn’t clear what the issue at the Land Registry was. Much would depend on what the issue in question was and what contractual terms you agreed to.
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We bought a property at auction. Unfortunately we made a rookie mistake and didn’t do a survey or get a solicitor to review the legal pack. We were aware of some damp in the basement but didn’t anticipate significant problems. We have found out that damp is significant and the lender have insisted all work is done before mortgage is offered. However we are also aware that regularisation work was not completed so we suspect other building control issues might emerge. We cannot do the work until completion and we cannot afford a bridging loan. We will have to pull out. I understand we will lose our deposit and have to pay auction and solicitor fees. The market is now relatively stable since December 2022 so I cannot see how they can claim further damages. Is there anything else we might be liable for ?
Thank you for your comment.
We cannot really say what you may or may not be liable for without considering the contractual documentation.
Two days ago. I won bidding in future auction company. But I think i did not bid the final price. The other trigger to let me bid higher prices.I asked future auction company to show me the bidding records. They didn’t. They said that system show is me. I didn’t pay deposit. The future auction company chasing me to pay for it. If not.asking seller’s solicitors to legal procedures. After auction. I found the property some problems. The auction didn’t show the property planning. And they didn’t gas appliances. So it is not suitable for my planning. In this situation, could i withdraw my bidding? Actually i have emailed the auction company in the same day to refuse the bidding. But the auction company threatening me to legal procedures. What can I do now?
Thank you for your comment.
There is no general obligation on a seller or auctioneer to disclose information about a property. There can be a duty to disclose latent title defects but this does not sound applicable here. Latent defects are things that someone could not discover which have a negative impact on the legal title to the property – this would not include anything that is reasonably discoverable on inspection of the property or a public register.
Planning applications and gas appliances are things that could be discovered on a proper inspection. If the buyer is not given the opportunity to undertake such inspections, then it is their decision whether or not to proceed with the purchase absent the information that they want or need.
We cannot provide legal advice on our website, if only for the fact that we do not know the full extent of the matter nor have we had sight of relevant documents. However, unless the seller has actually said something that is misleading (as opposed to simply saying nothing at all and allowing the buyer to proceed on their own assumptions alone), the buyer may have contractually agreed to purchase the property and may become liable to the seller for certain sums if they do not proceed with that purchase, the most usual being the forfeiture of any deposit. If a deposit has not been paid, then the seller would normally acquire a right to sue the buyer for breach of contract in that sum.
Hi
We have purchased a property at auction and found out it has a major damp problem, potential to be up to £30,000 + It is a ground and basement flat. We then found out that building regulations have not been signed off and there could be major issues with the building work.
Can we withdraw from this purchase. We have already put down a deposit of £50,000.
The bank with no lend until remedial works are done and they don’t even know about the building regs issue yet.
Help !! not sure what the total cost of the works will be. I feel that this was mis-sold as a 3 bed flat when it has not passed regulations yet.
Thank you for your comment and we are sorry to hear of the circumstances that you are in. Whilst of no real consolation for you, we do regularly see situations where individuals have bid on property only to discover that there is an issue significant enough that a lender will withdraw their mortgage offer.
In these circumstances, whether or not there is any prospect of withdrawing from the transaction does depend on the contractual terms agreed between the parties. Normally, auction terms and conditions are such that all of the risk is placed on the buyer to undertake their own enquiries. If they are not given the opportunity to do this, then the buyer has to decide whether or not to proceed with the risk of purchasing the property and there being something wrong later.
Unless it can be said that you are misled by the seller (and often this needs to be deliberate rather than accidental because of the auction terms and conditions) there may not be much that can be done.
However, if you would like to consider the position in more detail, please do feel free to get in touch.
Hi,
In October, I won a property via auction which I viewed in September and paid the reservation deposit as required by the auction house. The house was in good order when I viewed the property in September with no obvious damage.
In late November and early December I instructed some survey work. Which highlights a collapsed ceiling which wasn’t there when I viewed the property. I informed my solicitor and the auction house and they told me they informed the seller who is instructing contractors to repair the ceiling which wasn’t like that when the property was advertised and when I viewed it.
In early January the seller’s solicitor’s confirmed that the repair work was completed by the seller himself and are unable to confirm the extent of the repair or provide guarantee for the work done.
I went to the property with 3 different contractors who all confirmed that the repair work is subpar and highlighted another area in the property where the ceiling is drooping and will need repairing. Again this wasn’t like this when I viewed the property.
The seller is refusing to make good the repair with professional contractors or reduce the price to reimburse me for the cost of the repair. The quote is £2550 for the repair.
I don’t know what to do and my reservation deposit is at stake here. I thought that the seller would have to maintain the property in the state I won the bid on.
Can a buyer pull out of the sell and get the reservation fee back based on the fact that the property is not as it was when viewed and won at auction? And given the seller can not guarantee the work done there are potential safety risks?
The basic position here is that the terms of the contract are going to be very important. As a starting point, we would need to consider these in detail as to what the position is with respect to subsequent events. Certainly in a “traditional” conveyancing transaction where there is an exchange and then completion, the terms of the contract will dictate who it is that needs to maintain the property and insure it.
There may be a basis of claim here for misrepresentation, but this would involve a good consideration of the facts of the matter. Sometimes there is an obligation to update the purchaser when there are significant developments, however this will depend on the terms of the contract. With respect to misrepresentation, sometimes there is a basis to claim this because the previous representation has become untrue. In context, if the seller gave you the impression of the property being in a particular state and allowed you to continue under this misapprehension, knowing that it was not true, there might be a basis of claim here.
What you should be aware of however is that if the value of your claim is below £10,000, it may end up being dealt with in the small claims case management track. This is colloquially referred to as the “small claims Court”. Generally speaking, it is not possible for the parties to recover the legal costs that they incur in the small claims Court. With this in mind, it would be important to consider whether or not it is cost effective to pursue a claim.
If you would like to consider the matter in more detail, please do feel free to get in touch.
Hi.
What if I bought a land and did not read the legal pack carefully and missed the fact the address and postcode on the
Groundsure homebuyer report and also the drainage report legal pack was different to address on the TR1 & the plot of land I bought ?
Thank you for your comment. Broadly, if anyone has made an error, it cannot really be said that this is someone else’s fault.
Having said this, sometimes the fact that the “truth” can be discovered had the contract or other documents been properly checked is not a defence to a claim for misrepresentation; much would depend on the context and factual matrix of the matter.
We can’t give specific advice on our website, but broadly, in any sort of claim “causation” is important to prove. Put another way, it is necessary to show that the defendant “caused” the loss to the claimant. If the defendant did not cause the loss, it’s hard to see how they could be held liable for it.
Hi.
Bought a house in GoTo auction. Paid nearly 6k buyers premium. Was a committed buyer and was waiting nearly 7 months to complete. Turns out seller didn’t have land registry sorted and sell fall through.
Lost over 10k for legal fees, removal, storage . Had to move abroad and our daughter wasn’t able to go to school due to lack of permanent address.
What are my rights? Who is eligible for damages?
Thank you for your comment and we are sorry to hear of this.
It is somewhat drastic to have to move abroad and likewise, it is difficult to see how any breach of contract or misrepresentation on the part of the seller, so far as there is any, would render them liable for such losses. Unless it was expressly made clear that this would be a consequence for you when you entered into the contract, damages for such losses might be considered too “remote” because it is difficult to see how the seller could have seen that happening.
In terms of your rights, this depends on the terms of the contract you entered into. Certainly most people would expect a seller of property to have the right to sell that property, if this was the issue. However, it isn’t clear what the issue at the Land Registry was. Much would depend on what the issue in question was and what contractual terms you agreed to.