288 thoughts on “Dealing with property auction issues”
Hi. I’m in process of trying to get back my auction reservation fee. I was told before viewing the property that the only yearly charges are £64pm maintenance fee which money wise was perfect. So I bidded. I won the auction bid. First I was mislead by being told I have to pay 4.2% of the property price by estate agent Aprox £4.3k which i was then told it’s £6k minimum which I just let slip as no one replied back to me regarding it. (I have email proof of this)
In the auction pack it stated £64pm maintenance charge no other charges mentioned which I was told by the estate agent also… I received the management pack after waiting 2 months for it (2 weeks before completion) to find that the maintenance charge is in fact £107pm, £10 ground rent and £1.5k reservation fund..
It has now affected my mortgage offer meaning I can only borrow £10k less that I was originally agreed to because of the of the maintenance charges were incorrect . I have 3 documents of proof that I was told it was £64pm ( including the auction pack). Apparently it’s not enough proof… The auction company have said it was the amount the seller was paying when filling out the form which again isn’t true because it was £98pcm back in 2018-2019 ( management pack proves this)
Where do I stand with getting my deposit back? A caveat is in place but apparently it doesn’t cover this. I’ve been mislead and lied to by both estate agent, seller and the auction pack.
We are unclear whether or not the transaction proceeded to completion or not. This would likely be relevant to the position as if the issue was brought to your attention before completion and you proceeded, there is a possibility that this may have the effect of affirming the contract or waiving any claims in relation to the matter.
On the assumption that completion did not take place for this reason, much will depend on the auction terms and conditions. A reservation fee is normally stated to be non-refundable, whether or not the matter proceeds to completion. Maintenance and other charges can sometimes vary, so it would be necessary to also consider whether what was stated in the auction pack took account of this. It does appear from what you have written that there may have been a mistake, if the seller had paid larged historical charges than those stated. This might give rise to a claim for misrepresentation.
It would be necessary to consider the matter in more detail before we could provide any conclusive advice. If you would like to get in touch to discuss further, please feel free.
I recently bid on a property a few days before the auction and it was rejected. The auctioneer agent contacted me via phone and said that the sellers could agree if increased the figure, which I did and bid was agreed. However, at this point I told the auction that the bid would be under the name of a different family member. I paid the auction fees and the 10% deposit over the phone via the other family members debit card. The auctioneer agent sent an email attaching forms to sign and return by the bidder. In addition, I was asked to send my ID with the bidders via email and return the signed bidder form. Please note that at this point no legal pack was available to me or none was present on the website of the auction. The auctioneer agent said that no legal pack was available and there was no access to the site as they didn’t have keys and neither did the owners. Thereafter, a week went by, two weeks went by, our solicitor had not been contacted by anyone. I further contacted the auction and after a few phone calls and emails eventually got a response stating that the sellers had not appointed a solicitor yet. 4 weeks passed. Eventually my solicitor contacted the auction house and was passed over details of the sellers now appointed solicitors. My solicitor contacted the sellers solicitors and communication began. It became known to us at this point that the sellers had just completed their purchase of the property via another auction and at the point of sale where I bid for the property at the auction house the sellers technically never owned the property and therefore it should not have been marketed or on auction. The Seller has bought from a limited company which had floating charges against it. Articles of Roup had been drafted up and provided to my solicitor 5 weeks after the bid, in which it states that the bidder would have to pay legal costs of the seller for £1000. My solicitor rejected the articles of roup and sent standard missives instead. My solicitor wrote the sellers solicitor asking for a clean title to the property and entered into missives with the sellers. However, the sellers solicitors failed to communicate with my solicitor and more time passed. In the interim, my solicitor had carried out searches against the initial company that sold the property at auction to the current sellers, which showed charges against it. Therefore, asking the sellers side to provide us with proof that no charge was against the said property and that the title would be clean. Still no response. The sellers solicitors have now come back saying that we are in breach of the auctions contract and therefore in forfeit of the deposit, losing £12000. I was informed that the sellers have now put the property on the market and selling to someone else.
Therefore the auction house should not have put the property in the auction, as the seller hadn’t completed missives and the title wasn’t in their name at the point I agreed the bid. There was no legal pack or any documents relating to the property available at the point of bidding. The reason there was a delay of 4 weeks after the bid in my opinion was that the sale wasn’t completed and therefore couldn’t appoint a solicitor and hence why articles of roup were drafted up later. In addition to the above the auction house are stating that I am the buyer and not my family member; although the completed form is completed and signed by them and has their name on it; and payment was made via their debit card. In my opinion there is been misrepresentation by the auction house and the delay in responses by th auction house and the sellers solicitors is because the property wasn’t owned by the sellers at the point I placed my bid, and hence; after 4 weeks their solicitors details were provided after concluding missives.
I need your advice and it would greatly be appreciated.
Is this the fault of the auction house ? Should an action be raised against the auction house or the solicitors acting for the seller ? What would the best way be to recover my deposit and legal expenses incurred so far ?
You mention “articles of roup”. We understand that this is something used in auctions in Scotland. Unfortunately we are unable to advise on Scottish Law. Unfortunately we are only able to provide advance, guidance and comment on the law in England and Wales.
Great article thanks. We bought a property at auction. Read the legal pack viewed the property. And thought everything was great put an offer and then we’re failed mortgage due to the non standard construction of the property. We were unable to mortgage the property causing rescindment of contract and charge of fees to the value of 20k. I know it is mentioned above that the duty of care does not lie with the seller in this respect but with me to undertake surveys. But I am surprised that nothing is mentioned at all or even the property is not advertised as a cash purchase due to this. The scheme of repairs for the property is 47k property value is 71k! And nothing was mentioned. What would u say is their any possibility of actionable misrepresentation or shall I just swallow this horrendous bitter pill and stay away from auctions forever
The issue that stands out here is that this sale did not complete.
While we cannot advise on individual issues over the web it would depend on whether a Notice to Complete was served and also what state the property was said to be in according to the auction pack. There are certain circumstances in which the deposit can be ordered to be returned by a Court but without having seen the exact correspondence and chronology between the parties it will be difficult to determine.
However you can of course contact us for a confidential discussion should you wish to explore this.
We have been served a notice and this has been extended till 8th December. Thanks for your response and it will be good to explore options now before it is too late.
Supporting Farleigh Hospice | Limited Places Available We’re delighted to announce that Cunningtons is once again partnering with Farleigh Hospice for the annual Make a Will charity campaign this September! What We’re Offering ✅ Completely FREE Will preparation by our qualified solicitors;✅ Professional legal advice and guidance on making your Will; and of course,✅ Support […]
Planning for the future as we get older is a vital part of life – that’s why many of us provide for ourselves with pensions and Wills. However, one of the most important tools available to us is often neglected: Lasting Powers of Attorney. According to CanadaLife UK, 78% of UK adults don’t have a […]
Cunningtons help with "Your Legal Journey Through Life". We cover key areas: your first home, your relationships and family law, then growing families, employment matters, dispute resolutions, property investments, and planning your estate. We focus on continuity, trust, understanding clients, and personal service by offering the same legal team throughout life.
Hi.
I’m in process of trying to get back my auction reservation fee.
I was told before viewing the property that the only yearly charges are £64pm maintenance fee which money wise was perfect.
So I bidded.
I won the auction bid.
First I was mislead by being told I have to pay 4.2% of the property price by estate agent Aprox £4.3k which i was then told it’s £6k minimum which I just let slip as no one replied back to me regarding it. (I have email proof of this)
In the auction pack it stated £64pm maintenance charge no other charges mentioned which I was told by the estate agent also…
I received the management pack after waiting 2 months for it (2 weeks before completion) to find that the maintenance charge is in fact £107pm, £10 ground rent and £1.5k reservation fund..
It has now affected my mortgage offer meaning I can only borrow £10k less that I was originally agreed to because of the of the maintenance charges were incorrect .
I have 3 documents of proof that I was told it was £64pm ( including the auction pack). Apparently it’s not enough proof…
The auction company have said it was the amount the seller was paying when filling out the form which again isn’t true because it was £98pcm back in 2018-2019 ( management pack proves this)
Where do I stand with getting my deposit back?
A caveat is in place but apparently it doesn’t cover this.
I’ve been mislead and lied to by both estate agent, seller and the auction pack.
Thank you for your comment.
We are unclear whether or not the transaction proceeded to completion or not. This would likely be relevant to the position as if the issue was brought to your attention before completion and you proceeded, there is a possibility that this may have the effect of affirming the contract or waiving any claims in relation to the matter.
On the assumption that completion did not take place for this reason, much will depend on the auction terms and conditions. A reservation fee is normally stated to be non-refundable, whether or not the matter proceeds to completion. Maintenance and other charges can sometimes vary, so it would be necessary to also consider whether what was stated in the auction pack took account of this. It does appear from what you have written that there may have been a mistake, if the seller had paid larged historical charges than those stated. This might give rise to a claim for misrepresentation.
It would be necessary to consider the matter in more detail before we could provide any conclusive advice. If you would like to get in touch to discuss further, please feel free.
I recently bid on a property a few days before the auction and it was rejected. The auctioneer agent contacted me via phone and said that the sellers could agree if increased the figure, which I did and bid was agreed. However, at this point I told the auction that the bid would be under the name of a different family member. I paid the auction fees and the 10% deposit over the phone via the other family members debit card. The auctioneer agent sent an email attaching forms to sign and return by the bidder. In addition, I was asked to send my ID with the bidders via email and return the signed bidder form.
Please note that at this point no legal pack was available to me or none was present on the website of the auction. The auctioneer agent said that no legal pack was available and there was no access to the site as they didn’t have keys and neither did the owners.
Thereafter, a week went by, two weeks went by, our solicitor had not been contacted by anyone. I further contacted the auction and after a few phone calls and emails eventually got a response stating that the sellers had not appointed a solicitor yet. 4 weeks passed. Eventually my solicitor contacted the auction house and was passed over details of the sellers now appointed solicitors. My solicitor contacted the sellers solicitors and communication began.
It became known to us at this point that the sellers had just completed their purchase of the property via another auction and at the point of sale where I bid for the property at the auction house the sellers technically never owned the property and therefore it should not have been marketed or on auction. The Seller has bought from a limited company which had floating charges against it.
Articles of Roup had been drafted up and provided to my solicitor 5 weeks after the bid, in which it states that the bidder would have to pay legal costs of the seller for £1000. My solicitor rejected the articles of roup and sent standard missives instead.
My solicitor wrote the sellers solicitor asking for a clean title to the property and entered into missives with the sellers. However, the sellers solicitors failed to communicate with my solicitor and more time passed. In the interim, my solicitor had carried out searches against the initial company that sold the property at auction to the current sellers, which showed charges against it. Therefore, asking the sellers side to provide us with proof that no charge was against the said property and that the title would be clean. Still no response.
The sellers solicitors have now come back saying that we are in breach of the auctions contract and therefore in forfeit of the deposit, losing £12000.
I was informed that the sellers have now put the property on the market and selling to someone else.
Therefore the auction house should not have put the property in the auction, as the seller hadn’t completed missives and the title wasn’t in their name at the point I agreed the bid. There was no legal pack or any documents relating to the property available at the point of bidding. The reason there was a delay of 4 weeks after the bid in my opinion was that the sale wasn’t completed and therefore couldn’t appoint a solicitor and hence why articles of roup were drafted up later.
In addition to the above the auction house are stating that I am the buyer and not my family member; although the completed form is completed and signed by them and has their name on it; and payment was made via their debit card.
In my opinion there is been misrepresentation by the auction house and the delay in responses by th auction house and the sellers solicitors is because the property wasn’t owned by the sellers at the point I placed my bid, and hence; after 4 weeks their solicitors details were provided after concluding missives.
I need your advice and it would greatly be appreciated.
Is this the fault of the auction house ? Should an action be raised against the auction house or the solicitors acting for the seller ?
What would the best way be to recover my deposit and legal expenses incurred so far ?
Thank you for your comment Raymond.
You mention “articles of roup”. We understand that this is something used in auctions in Scotland. Unfortunately we are unable to advise on Scottish Law. Unfortunately we are only able to provide advance, guidance and comment on the law in England and Wales.
Great article thanks. We bought a property at auction. Read the legal pack viewed the property. And thought everything was great put an offer and then we’re failed mortgage due to the non standard construction of the property. We were unable to mortgage the property causing rescindment of contract and charge of fees to the value of 20k. I know it is mentioned above that the duty of care does not lie with the seller in this respect but with me to undertake surveys. But I am surprised that nothing is mentioned at all or even the property is not advertised as a cash purchase due to this. The scheme of repairs for the property is 47k property value is 71k! And nothing was mentioned. What would u say is their any possibility of actionable misrepresentation or shall I just swallow this horrendous bitter pill and stay away from auctions forever
The issue that stands out here is that this sale did not complete.
While we cannot advise on individual issues over the web it would depend on whether a Notice to Complete was served and also what state the property was said to be in according to the auction pack. There are certain circumstances in which the deposit can be ordered to be returned by a Court but without having seen the exact correspondence and chronology between the parties it will be difficult to determine.
However you can of course contact us for a confidential discussion should you wish to explore this.
We have been served a notice and this has been extended till 8th December.
Thanks for your response and it will be good to explore options now before it is too late.