288 thoughts on “Dealing with property auction issues”
Hello, we are in the process of purchasing a property from auction. We were given a 56 day completion deadline which we stuck to and it looked like we were going to complete early but just as the deadline was approaching we were told that the sellers couldn’t complete yet. No mention of why was given until we pressed the matter and it turns out the sellers didn’t have the lasting power of attorney in place to be able to sell the property. Their story is they had tried to get it and thought they had but there was some sort of admin error which they weren’t aware of until close to completion. We paid £17k in auction fees and were counting on the quick turnaround for various reasons. We were even pressured into getting buildings insurance for the new property and to pay as quickly as possible which we did and only after this did we hear anything from the sellers side about not being able to complete. We haven’t been informed in writing about their need to extend the 56 days and in our opinion the matter has been handled very poorly. We are still waiting and wondering about our rights here and what steps can / should be taken. Do we have a misrepresentation case? Can we get out £17k back? Can we renegotiate the price of the house should they be able to sell in the coming weeks? Is it legal for them to try and sell the house without having any formal rights over it and on top of that taking a reservation fee from us, being shady about why there’s a delay and causing us extra expenses. Thanks in advance.
If a party to the contract of sale is unable to complete and the other is, it would probably be worthwhile considering serving a notice to complete, subject to the terms and conditions attached to the sale. This is something you should discuss with your conveyancing solicitor. This is the starting point for rescinding, or “cancelling” the contract and recovering the deposit paid.
This does not sound like a property misrepresentation matter per se, but you are correct to identify that without the appropriate authority for someone to sell a property that does not belong to them (i.e. the power of attorney) if would not be appropriate to complete.
If you would like us to look into the matter for you, please feel free to get in touch.
I bought an auction property with tenant in situ expecting to use a mortgage for the purchase. Unfortunately i wasn’t made aware that the tenants are problematic and there was ongoing dispute with the seller. Prior to bidding on the property i did make enquiries from the lettings agent and was told that the tenants were responsive , pay their rent on time and was given evidence of statement of rent. Now my mortgage lender has been unable to gain access to perform a valuation as the tenant is preventing access and will not respond to calls. This has been going on for weeks and i now have 3 days to complete. The seller has been unwilling to offer any help in facilitating access. I have no other source of funds so it looks like i may lose my deposit due to failure to complete. Can i claim back my deposit dure to misrepresentation as the seller failed to disclose issue with the tenant?
We are hesitant to suggest that this is a case where there has been a misrepresentation but it is possible, depending exactly what you asked and were told. The auction terms and conditions would also be very important to consider, as is the auction pack contents.
This is not a situation we have specifically come across before. The seller is still the landlord. Whilst you have exchanged contracts, you are not yet the legal owner and cannot force the tenant to comply with the terms of the tenancy agreement, which no doubt would contain provisions to allow the landlord or the landlord’s agents to attend the property on reasonable notice.
There may be some scope to suggest that the inability to access the property as a result of the seller’s tenant amounts to a frustration of contract (i.e. it cannot now be performed as a result of circumstances outside of the control of the parties) but we would need to consider this with you in more detail. This may entitle you to claim back the deposit. However, we suspect that much would turn on the contractual position. Ideally, a contractual clause allowing you access to the property for the purposes of carrying out a necessary valuation would be helpful, but we suspect that there is no such clause. We also suspect that the argument that the seller will adopt is that it was for the buyer to ensure that they had the finance in place before bidding and to enable them to complete. We would be interested to know whether or not there were any discussions regarding access for the purposes of obtaining a valuation prior to the auction itself.
We would be happy to consider the position with you in more detail if you would like to get in touch.
I have bought a property from an auction only to discover additional fees for ‘legal, admin and disbursement’ totally £13,000 on top of the usual auction fees and legal costs. Furthermore there is a second clause attached that states no disclosure will be made to how these fees a broken down. Whilst I accept this is a contractual obligation now having exchanged the fact that it is a commercial solicitor that is demanding this sum for unexplainable extortionate sum. As I am a consumer do to the implied terms of this contract surely the ‘Rights of Fair Trading/Terms’ apply. It is surely a misrepresentation to label it as ‘admin and legal costs’ if I am paying £13,000 for a service due to the explicit terms of this contract I have a legal right to be advised what they are for. I believe that I can argue that this is a ‘sham contract’ and that all the consumer regulations including misleading advertisement and misrepresentation rules apply. I am currently seeking expert advise on this as just because it has never been challenged and is practiced it does not make it right . Look at the PPI case? I think £13,000 is excess for conveyancing for a property at a guide price of £50,000! then to place these contractual clause by a commercial firm makes this a ‘sham contract’
Much will depend on the terms and conditions that the transaction was subject to. The basic position is that if someone has contractually agreed to be liable for a cost, whether or not that cost is currently known, this is still potentially enforceable contractual term. From what you have written, it appears that you have contractually agreed to pay the seller’s legal and other costs associated with the transaction.
We are not aware of the specific legislation that you refer to and we are not aware of any legislation which specifically states that a seller/auctioneer must set out what the charges will be in advance. It would generally be for a buyer to make their own enquiries until they are satisfied that they are prepared to bid for the property in question, including the position with respect to any contractually agreed charges. If those queries are unanswered, then the risk would lie with the buyer.
In theory, there could be a consumer/trader relationship and some scope to challenge the charges on the basis of the contract term being unfair. However, we are unaware of any specific case law on this point, so cannot point to a historical case which might lend itself to suggesting that such a claim would be successful.
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Hello, we are in the process of purchasing a property from auction. We were given a 56 day completion deadline which we stuck to and it looked like we were going to complete early but just as the deadline was approaching we were told that the sellers couldn’t complete yet. No mention of why was given until we pressed the matter and it turns out the sellers didn’t have the lasting power of attorney in place to be able to sell the property. Their story is they had tried to get it and thought they had but there was some sort of admin error which they weren’t aware of until close to completion. We paid £17k in auction fees and were counting on the quick turnaround for various reasons. We were even pressured into getting buildings insurance for the new property and to pay as quickly as possible which we did and only after this did we hear anything from the sellers side about not being able to complete. We haven’t been informed in writing about their need to extend the 56 days and in our opinion the matter has been handled very poorly. We are still waiting and wondering about our rights here and what steps can / should be taken. Do we have a misrepresentation case? Can we get out £17k back? Can we renegotiate the price of the house should they be able to sell in the coming weeks? Is it legal for them to try and sell the house without having any formal rights over it and on top of that taking a reservation fee from us, being shady about why there’s a delay and causing us extra expenses.
Thanks in advance.
If a party to the contract of sale is unable to complete and the other is, it would probably be worthwhile considering serving a notice to complete, subject to the terms and conditions attached to the sale. This is something you should discuss with your conveyancing solicitor. This is the starting point for rescinding, or “cancelling” the contract and recovering the deposit paid.
This does not sound like a property misrepresentation matter per se, but you are correct to identify that without the appropriate authority for someone to sell a property that does not belong to them (i.e. the power of attorney) if would not be appropriate to complete.
If you would like us to look into the matter for you, please feel free to get in touch.
I bought an auction property with tenant in situ expecting to use a mortgage for the purchase. Unfortunately i wasn’t made aware that the tenants are problematic and there was ongoing dispute with the seller. Prior to bidding on the property i did make enquiries from the lettings agent and was told that the tenants were responsive , pay their rent on time and was given evidence of statement of rent.
Now my mortgage lender has been unable to gain access to perform a valuation as the tenant is preventing access and will not respond to calls. This has been going on for weeks and i now have 3 days to complete. The seller has been unwilling to offer any help in facilitating access. I have no other source of funds so it looks like i may lose my deposit due to failure to complete. Can i claim back my deposit dure to misrepresentation as the seller failed to disclose issue with the tenant?
Thank you for your comment.
We are hesitant to suggest that this is a case where there has been a misrepresentation but it is possible, depending exactly what you asked and were told. The auction terms and conditions would also be very important to consider, as is the auction pack contents.
This is not a situation we have specifically come across before. The seller is still the landlord. Whilst you have exchanged contracts, you are not yet the legal owner and cannot force the tenant to comply with the terms of the tenancy agreement, which no doubt would contain provisions to allow the landlord or the landlord’s agents to attend the property on reasonable notice.
There may be some scope to suggest that the inability to access the property as a result of the seller’s tenant amounts to a frustration of contract (i.e. it cannot now be performed as a result of circumstances outside of the control of the parties) but we would need to consider this with you in more detail. This may entitle you to claim back the deposit. However, we suspect that much would turn on the contractual position. Ideally, a contractual clause allowing you access to the property for the purposes of carrying out a necessary valuation would be helpful, but we suspect that there is no such clause. We also suspect that the argument that the seller will adopt is that it was for the buyer to ensure that they had the finance in place before bidding and to enable them to complete. We would be interested to know whether or not there were any discussions regarding access for the purposes of obtaining a valuation prior to the auction itself.
We would be happy to consider the position with you in more detail if you would like to get in touch.
I have bought a property from an auction only to discover additional fees for ‘legal, admin and disbursement’ totally £13,000 on top of the usual auction fees and legal costs. Furthermore there is a second clause attached that states no disclosure will be made to how these fees a broken down. Whilst I accept this is a contractual obligation now having exchanged the fact that it is a commercial solicitor that is demanding this sum for unexplainable extortionate sum. As I am a consumer do to the implied terms of this contract surely the ‘Rights of Fair Trading/Terms’ apply. It is surely a misrepresentation to label it as ‘admin and legal costs’ if I am paying £13,000 for a service due to the explicit terms of this contract I have a legal right to be advised what they are for. I believe that I can argue that this is a ‘sham contract’ and that all the consumer regulations including misleading advertisement and misrepresentation rules apply. I am currently seeking expert advise on this as just because it has never been challenged and is practiced it does not make it right . Look at the PPI case? I think £13,000 is excess for conveyancing for a property at a guide price of £50,000! then to place these contractual clause by a commercial firm makes this a ‘sham contract’
Much will depend on the terms and conditions that the transaction was subject to. The basic position is that if someone has contractually agreed to be liable for a cost, whether or not that cost is currently known, this is still potentially enforceable contractual term. From what you have written, it appears that you have contractually agreed to pay the seller’s legal and other costs associated with the transaction.
We are not aware of the specific legislation that you refer to and we are not aware of any legislation which specifically states that a seller/auctioneer must set out what the charges will be in advance. It would generally be for a buyer to make their own enquiries until they are satisfied that they are prepared to bid for the property in question, including the position with respect to any contractually agreed charges. If those queries are unanswered, then the risk would lie with the buyer.
In theory, there could be a consumer/trader relationship and some scope to challenge the charges on the basis of the contract term being unfair. However, we are unaware of any specific case law on this point, so cannot point to a historical case which might lend itself to suggesting that such a claim would be successful.