290 thoughts on “Dealing with property auction issues”
I am interested in buying a property at auction and the legal pack states that the Seller won’t make searches in advance of the auction however the sale is subject to any matters that could or may be revealed by any searches. – Is this effectively saying that if anything untoward is discovered in the searches that I could terminate the contract?
They have also changed the Law of Property (Miscellaneous Provisions) Act 1994 2(1)(b) to: that person will at *the Transferee’s cost* do all that he reasonably can to give the person to whom he disposes of the property the title he purports to give. – Does this refer to the Seller’s legal costs?
Also, it states that anything recorded in registers open to public inspection are deemed to be in the buyers knowledge. – Is this anything to worry about and what registers should I look at?
Without seeing the precise wording of the clauses, we cannot say with any certainty, but if a buyer is contractually agreeing to be bound by any matters that searches would reveal, then what you are in fact saying is that you would not hold the seller liable for these. It is highly unlikely you are agreeing with the seller that you could terminate the contract on discovering something untoward. The same is true with respect to public registers, which are the buyer’s responsibility to check.
It is not unusual for a non-auction property to be sold subject to matters revealed in searches or in public registers. This is because it is the buyer’s responsibility to check all aspects of the property that they are purchasing. If for any reason the information or documentation is not forthcoming, then a buyer would have to decide whether to take the risk in proceeding in the absence of this. It is not generally possible to hold a seller liable for making an “omission” or failing to say something, only if what they say is factually inaccurate.
The transferor is the seller/vendor. The transferee is the buyer/purchaser. Contractual clauses requiring a particular party to cover the cost of doing something means that the cost is met by that party. Section 2 of the Law of Property (Miscellaneous Provisions) Act 1994 implies covenants, or terms, in the agreement between buyer and seller. Broadly, a seller would normally at their cost have to ensure that the property is transferred to the seller with the title (full or limited title guarantee) promised. In this instance, the buyer would be liable for the cost of this.
It is always advisable to instruct a solicitor to undertake searches and check the title to a property for possible legal problems before exchanging contracts or bidding at auction. A consideration of the contractual terms is also worthwhile. A surveyor should be instructed to consider any structural issues. This will significantly reduce the risk of unexpected problems and expenses arising in the future and whilst there is a cost to this, it is generally going to be cheaper than if problems do later arise. A typical situation that arises is when, after the winning bid is made, the conditional offer from bidder’s mortgage lender is withdrawn when subsequent searches or a survey reveals an issue, leaving the buyer to either find the balance to complete or lose their deposit. If a buyer chooses not to or is not given the opportunity to instruct their own solicitor or surveyor before an auction, then it would be sensible to think about whether or not they can afford to risk unexpected problems and expenses arising in the future, before bidding.
There is often a reason properties are being auctioned and why they can often be acquired more cheaply than on the open market. This might be because there is a problem of some sort with the property and attempts to sell it on the open market have failed because buyers discover a problem before exchange and decide not to proceed when they get their search results. With an auction, sometimes bidders are provided with very little information and are not given the opportunity to investigate in any detail; the property is “sold as seen” with warts and all and it is up to the buyer to decide whether or not to take the risk. The position can change when there has been a deliberate misrepresentation about the facts relating to the property, in which case there could be scope to rescind the contract before completion.
Hi, I’m in the process of completing on a recent residential purchased at auction. The legal pack showed the property had the benefit of a title with rights reserved to park 2 private vehicles on land it once owned, that was sold to a developer in 2005. On further enquiries I have been told that the title was cancelled and closed, and have also checked the historical records and note that there is no copies of the Title Register held on file. The title still appears on a search of land registry, on the deeds of both properties. The property was sold by court order and was empty for 2 years, I believe the owner of the land has recently terminated the title. Are there any grounds for me to appeal this? Any help would be much appreciated.
We would struggle to provide even general guidance on the position without first having considered the titles and documentation in question.
The points you raise are legalistic and generally speaking, statements of law are not actionable; only statements of fact. Whilst the distinction is not always clear, this principle does still remain. Statements of opinion or someone’s views of the legal position of something are not generally considered sufficient to form the basis of a misrepresentation claim. Normally, a statement about the facts of a particular matter are required.
Dear Sir / Madam, I bought a property in auction and paid 10 % deposit and their fees . By the contract , I have to complete mortgage in 28 days but my mortgage will complete in 8 weeks . What are the rights I have to extend the time for mortgage completion process .
We cannot provide specific advice on our website, not least because we do not have all of the relevant information and facts.
However, the basic position when any contract is involved, is that the right or obligation to do or not do something will be governed by the contract’s terms. If the contract is silent on the point, then the chances are you will be in breach of contract if completion does not take place by the agreed contractual completion date. Subject to the precise terms of the contract, unless something different could be agreed with the seller, the seller may acquire the right to serve a notice to complete and thereafter, if completion does not then take place, terminate the contract and forfeit any deposit.
Shiza Rani I am in same position as yourself. Please can you tell me how did your purchase go and did you get extra time to complete. Kind regards Mrs Khan
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I am interested in buying a property at auction and the legal pack states that the Seller won’t make searches in advance of the auction however the sale is subject to any matters that could or may be revealed by any searches.
– Is this effectively saying that if anything untoward is discovered in the searches that I could terminate the contract?
They have also changed the Law of Property (Miscellaneous Provisions) Act 1994 2(1)(b) to:
that person will at *the Transferee’s cost* do all that he reasonably can to give the person to whom he disposes of the property the title he purports to give.
– Does this refer to the Seller’s legal costs?
Also, it states that anything recorded in registers open to public inspection are deemed to be in the buyers knowledge.
– Is this anything to worry about and what registers should I look at?
Thank you for your really helpful article!
Thank you for your comment.
Without seeing the precise wording of the clauses, we cannot say with any certainty, but if a buyer is contractually agreeing to be bound by any matters that searches would reveal, then what you are in fact saying is that you would not hold the seller liable for these. It is highly unlikely you are agreeing with the seller that you could terminate the contract on discovering something untoward. The same is true with respect to public registers, which are the buyer’s responsibility to check.
It is not unusual for a non-auction property to be sold subject to matters revealed in searches or in public registers. This is because it is the buyer’s responsibility to check all aspects of the property that they are purchasing. If for any reason the information or documentation is not forthcoming, then a buyer would have to decide whether to take the risk in proceeding in the absence of this. It is not generally possible to hold a seller liable for making an “omission” or failing to say something, only if what they say is factually inaccurate.
The transferor is the seller/vendor. The transferee is the buyer/purchaser. Contractual clauses requiring a particular party to cover the cost of doing something means that the cost is met by that party. Section 2 of the Law of Property (Miscellaneous Provisions) Act 1994 implies covenants, or terms, in the agreement between buyer and seller. Broadly, a seller would normally at their cost have to ensure that the property is transferred to the seller with the title (full or limited title guarantee) promised. In this instance, the buyer would be liable for the cost of this.
It is always advisable to instruct a solicitor to undertake searches and check the title to a property for possible legal problems before exchanging contracts or bidding at auction. A consideration of the contractual terms is also worthwhile. A surveyor should be instructed to consider any structural issues. This will significantly reduce the risk of unexpected problems and expenses arising in the future and whilst there is a cost to this, it is generally going to be cheaper than if problems do later arise. A typical situation that arises is when, after the winning bid is made, the conditional offer from bidder’s mortgage lender is withdrawn when subsequent searches or a survey reveals an issue, leaving the buyer to either find the balance to complete or lose their deposit. If a buyer chooses not to or is not given the opportunity to instruct their own solicitor or surveyor before an auction, then it would be sensible to think about whether or not they can afford to risk unexpected problems and expenses arising in the future, before bidding.
There is often a reason properties are being auctioned and why they can often be acquired more cheaply than on the open market. This might be because there is a problem of some sort with the property and attempts to sell it on the open market have failed because buyers discover a problem before exchange and decide not to proceed when they get their search results. With an auction, sometimes bidders are provided with very little information and are not given the opportunity to investigate in any detail; the property is “sold as seen” with warts and all and it is up to the buyer to decide whether or not to take the risk. The position can change when there has been a deliberate misrepresentation about the facts relating to the property, in which case there could be scope to rescind the contract before completion.
Hi,
I’m in the process of completing on a recent residential purchased at auction.
The legal pack showed the property had the benefit of a title with rights reserved to park 2 private vehicles on land it once owned, that was sold to a developer in 2005.
On further enquiries I have been told that the title was cancelled and closed, and have also checked the historical records and note that there is no copies of the Title Register held on file.
The title still appears on a search of land registry, on the deeds of both properties.
The property was sold by court order and was empty for 2 years, I believe the owner of the land has recently terminated the title.
Are there any grounds for me to appeal this?
Any help would be much appreciated.
Thank you for your comment.
We would struggle to provide even general guidance on the position without first having considered the titles and documentation in question.
The points you raise are legalistic and generally speaking, statements of law are not actionable; only statements of fact. Whilst the distinction is not always clear, this principle does still remain. Statements of opinion or someone’s views of the legal position of something are not generally considered sufficient to form the basis of a misrepresentation claim. Normally, a statement about the facts of a particular matter are required.
Dear Sir / Madam,
I bought a property in auction and paid 10 % deposit and their fees . By the contract , I have to complete mortgage in 28 days but my mortgage will complete in 8 weeks . What are the rights I have to extend the time for mortgage completion process .
Thank you for your comment.
We cannot provide specific advice on our website, not least because we do not have all of the relevant information and facts.
However, the basic position when any contract is involved, is that the right or obligation to do or not do something will be governed by the contract’s terms. If the contract is silent on the point, then the chances are you will be in breach of contract if completion does not take place by the agreed contractual completion date. Subject to the precise terms of the contract, unless something different could be agreed with the seller, the seller may acquire the right to serve a notice to complete and thereafter, if completion does not then take place, terminate the contract and forfeit any deposit.
Shiza Rani I am in same position as yourself. Please can you tell me how did your purchase go and did you get extra time to complete.
Kind regards
Mrs Khan