288 thoughts on “Dealing with property auction issues”
Hi, my bid for a flat was successful during an auction however I misunderstood the service charges as communicated directly by the seller. Seller advised that the service charge is 2400 based on previous payment and provide proof payment to the property manager, but upon further scrutiny after the auction, the 2400 is per quarter, so I’m now on the hook for 10k service charge per year. I feel that the seller mislead me on this point. It’s tenanted at 800 per month so atleast covers the cost but as far as it goes for an investment, it’s not good at all. Thanks fully I’ve purchased it at 40% below previous properties sold in the block in 2021, but still leaves a sour taste in my mouth. I’ve paid the deposit but do you think there is grounds for misrepresentation on the basis the information shared was misleading and service charge was not disclosed on the legal pack?
If you misunderstood what was being communicated to you, then this is not something that the seller can be held liable for. If, however, you were actively led to believe that the service charge was something quite different to what it is, subject to the relevant terms and conditions you agreed, there could be a basis of claim for misrepresentation.
On the assumption that there was a misrepresentation and on the assumption that you have not contractually agreed that you will not pursue such claims (it is not unusual for auction terms and conditions to contain non-reliance clauses, which can prevent misrepresentation claims in the absence of proving fraud), your loss would likely be based on diminution in value. This is the difference between what the property was worth at the time of purchase (which may not be the same as you paid for it, if you purchased at below a market rate) and what it was worth had the information been made known to a buyer. It would be necessary to obtain input from a suitably qualified surveyor on this loss.
Never ever use an Auction Centre to sell your house!
My estate agent told me it would be quicker and easy. I should have got advice from a solicitor . Now I can’t sell my house because they ask the buyer for a reserve fee of 3.5% it shocked me so much and they put my house up for a very very low price. They are sharks and have no morals! I’ve lost at least 3 sales so far if not more.
There are a number of ways of selling property, and all of them can work out just fine. But all of them work a lot better if you have a property solicitor working for you.
We are sorry to hear about what happened to you, it sounds like a very costly lesson.
Hi We purchased a land/ commercial via online auction. It was advertised as light industrial but its been in use as storage. There is no planning history and we cannot run a business we intended. We have not paid a deposit or holding deposit. My partner who intended to invest has walked out. I have no way to purchase it now. Now they are compelling me to finish the purchase else they attach my home. What options/ rights do we have to come out of it?
We cannot give specific advice on our website. However, the starting point is to consider what you contractually agreed and whether or not you are bound to complete the transaction. There could be a few points to rely on, depending on what the terms and conditions say and depending on whether or not it can be said that you were factually misled by the seller. It sounds to us that no planning history or statements of fact about what the property was capable of being used for was provided by the seller. If this is the case, then it would not be possible to say that the seller misled you; the basic position would be that it was down to you as a buyer to check that you were happy to proceed with the purchase and if you could not find the information you wanted, whether or not you were prepared to take the risk in proceeding further.
If you are legally obliged to complete the transaction, it will be necessary to consider the consequences of failing to complete. Normally, even if a deposit has not been handed over to a seller, the contract will provide that the deposit becomes payable once a notice to complete is served. Failing to make payment would be a breach of contract entitling the seller to issue a claim for the sum that should have been paid.
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Hi, my bid for a flat was successful during an auction however I misunderstood the service charges as communicated directly by the seller. Seller advised that the service charge is 2400 based on previous payment and provide proof payment to the property manager, but upon further scrutiny after the auction, the 2400 is per quarter, so I’m now on the hook for 10k service charge per year. I feel that the seller mislead me on this point. It’s tenanted at 800 per month so atleast covers the cost but as far as it goes for an investment, it’s not good at all. Thanks fully I’ve purchased it at 40% below previous properties sold in the block in 2021, but still leaves a sour taste in my mouth. I’ve paid the deposit but do you think there is grounds for misrepresentation on the basis the information shared was misleading and service charge was not disclosed on the legal pack?
Thank you for your comment.
If you misunderstood what was being communicated to you, then this is not something that the seller can be held liable for. If, however, you were actively led to believe that the service charge was something quite different to what it is, subject to the relevant terms and conditions you agreed, there could be a basis of claim for misrepresentation.
On the assumption that there was a misrepresentation and on the assumption that you have not contractually agreed that you will not pursue such claims (it is not unusual for auction terms and conditions to contain non-reliance clauses, which can prevent misrepresentation claims in the absence of proving fraud), your loss would likely be based on diminution in value. This is the difference between what the property was worth at the time of purchase (which may not be the same as you paid for it, if you purchased at below a market rate) and what it was worth had the information been made known to a buyer. It would be necessary to obtain input from a suitably qualified surveyor on this loss.
Never ever use an Auction Centre to sell your house!
My estate agent told me it would be quicker and easy. I should have got advice from a solicitor . Now I can’t sell my house because they ask the buyer for a reserve fee of 3.5% it shocked me so much and they put my house up for a very very low price. They are sharks and have no morals! I’ve lost at least 3 sales so far if not more.
Thanks for your comment.
There are a number of ways of selling property, and all of them can work out just fine. But all of them work a lot better if you have a property solicitor working for you.
We are sorry to hear about what happened to you, it sounds like a very costly lesson.
Hi
We purchased a land/ commercial via online auction. It was advertised as light industrial but its been in use as storage. There is no planning history and we cannot run a business we intended. We have not paid a deposit or holding deposit. My partner who intended to invest has walked out. I have no way to purchase it now. Now they are compelling me to finish the purchase else they attach my home. What options/ rights do we have to come out of it?
Thank you for your comment.
We cannot give specific advice on our website. However, the starting point is to consider what you contractually agreed and whether or not you are bound to complete the transaction. There could be a few points to rely on, depending on what the terms and conditions say and depending on whether or not it can be said that you were factually misled by the seller. It sounds to us that no planning history or statements of fact about what the property was capable of being used for was provided by the seller. If this is the case, then it would not be possible to say that the seller misled you; the basic position would be that it was down to you as a buyer to check that you were happy to proceed with the purchase and if you could not find the information you wanted, whether or not you were prepared to take the risk in proceeding further.
If you are legally obliged to complete the transaction, it will be necessary to consider the consequences of failing to complete. Normally, even if a deposit has not been handed over to a seller, the contract will provide that the deposit becomes payable once a notice to complete is served. Failing to make payment would be a breach of contract entitling the seller to issue a claim for the sum that should have been paid.