287 thoughts on “Dealing with property auction issues”
Dear Cunningtons,
We’ve bought a property via a modern method of auction. A condition of the sale was vacant possession at completion but tenants were still in situ after the 56 days. The seller then refused to communicate further with the auction house and has refused to exchange even after we said we were prepared to buy with tenants in situ.
The seller won’t withdraw from the sale and won’t exchange leaving us with having paid the reservation fee to the auction house but no property to show for it. Legal and mortgage fees have also been paid out.
Are we able to sue the seller for specific performance, breach of contract etc?
Thank you for this and apologies for the delay in responding.
Assuming that a modern method of auction is the variety where you do not enter into a contract to purchase the property on the fall of the hammer but instead enter into a reservation agreement, there may be redress you have against the seller but it will depend on the content of the contract you did enter into and also the terms of the auction. The contents of these documents will determine what that redress, if any, is.
This will not likely be a claim in misrepresentation but potentially a claim in breach of contract, which is also something we can assist with.
Please feel free to contact us for a confidential discussion.
I have literally just sold my property via traditional auction. The buyer has just emailed to say it’s a mistake and he is mentally unwell. Part of the deposit was taken once the hammer fell with remainder of deposit to be paid within1 working day ( by Monday). He seemed perfectly coherent prior to this disclosure and I suspect is just using this as a means to try and wiggle put of being liable for the contract he entered into at auction.
Really can’t believe this! Any advice gratefully received – can he use mental health as valid reason to wiggle out of the contract?
Thank you for your comment. Without seeing the full paperwork relating to this situation I am not able to advise definitively but I will strive to give some pointers here.
Normally the situation is that the buyer must complete on the completion date or you will have redress against them pursuant to the terms of the contract. Mental health, however, is not something that I can say definitively one way or another. It sounds like he might be claiming that at the time he entered into the contract (i.e. he bid) he did not have mental capacity. Are you able to assist us with what exactly the mental health reasons he has cited are, as if he did not have capacity then the contract cannot have been said to have been properly formed, but that is a very high bar to surmount.
You also need to consider what exactly you want to do here and whether you want to force the sale to go ahead or try to recover the loss and damage you’ve undergone from him. Please feel free to contact us for a confidential discussion.
I have encountered some issues and would appreciate guidance on the following points:
1. Misrepresentation in Property Auctions:
a) If an auction house provides assurances about the completeness of a legal pack, but significant issues are later discovered, could this amount to misrepresentation?
b) What remedies might be available to a buyer in such a situation?
2. Post-Auction Changes to Documentation:
a) What are the legal implications if an auctioneer alters documentation after an auction has concluded?
b) Could such alterations be considered a separate misrepresentation or breach of duty?
3. Auctioneer’s Disclosure Obligations:
a) What obligations do auctioneers have to disclose issues with a property before an auction?
b) Are there specific regulations governing auctioneers in property transactions?
4. Verbal Assurances from Auction Staff:
a) If an auction house staff member provides verbal assurances that are later disputed by the company, what recourse might a buyer have?
b) How does the concept of authority apply in such situations?
5. Completion Deadlines and Extensions:
a) If legal issues prevent meeting a completion deadline, what options are available to a buyer?
b) How can a buyer protect themselves from penalties due to delays beyond their control?
6. Right to Withdraw:
a) Under what circumstances might a buyer have the right to withdraw from an auction purchase?
b) What are the potential consequences of withdrawing?
7. Potential Damages:
a) What types of damages might a buyer be entitled to claim if issues arise after an auction purchase?
b) What evidence would typically be required to support such claims?
I would appreciate general guidance on these issues as they relate to property auction transactions.
Thank you for this comment and apologies for the delay in responding. There are too many questions to answer on this forum but we can give the following general advice.
Firstly, auction contracts often are very much locked down in that they often contain entire agreement clauses and non-reliance clauses. These state that the buyer is only entitled to rely upon the contents of the contract itself and therefore is not able to bring any action further to what may have been said outside the contract. It is also often the case that the contract contains a clause that you agree that the seller is not forced to reply to any enquiries you make.
Secondly, the auction house will almost certainly be protected from any claims by its terms and conditions.
Thirdly, if you fail to complete on the purchase, you will likely lose the deposit and also potentially, subject to the contract’s provisions, be liable for the losses of and occasioned by the seller. However if you do complete you will still potentially be able to bring a claim against the seller in misrepresentation but it will be for damages only.
First of all thank you for the article and responses to comments.
I has purchased a flat on same road I live at auction for my elderly parents, and dad is also being treated for cancer.
The auction listing specifically mentioned 62 years lease and auctioneer told me the flat would be vacant on possession. This information was in addition to what was contained in the legal pack and on which basis a successful bid placed and deposit paid.
The sellers solicitors are not responding to any enquiries and in the absence of lease pack, that only 37 years lease remaining. We have also been told no keys will be given on completion.
I have paid £9.4k deposit and do not know whether to complete based on misleading information from the auctioneer – do I have valid grounds not to complete or pursue a claim against the auctioneer?
Thank you for this comment and apologies for the delay in responding. We are unfortunately unable to give specific legal advice over this medium as we have not full information as to what is going on here and have not had sight of any relevant documents, however, based on what you have said in your comment, we would mention the following.
Firstly, auction contracts often are very much locked down in that they often contain entire agreement clauses and non-reliance clauses. These state that the buyer is only entitled to rely upon the contents of the contract itself and therefore is not able to bring any action further to what may have been said outwith the contract. Therefore we would need to circumvent any such clauses in the contract. It is also often the case that the contract contains a clause that you agree that the seller is not forced to reply to any enquiries you make.
Secondly, it would not be a claim against the auctioneer necessarily as they are not party to the contract but against the seller.
Thirdly, if you fail to complete on the purchase, you will likely lose the deposit and also potentially, subject to the contract’s provisions, be liable for the losses of and occasioned by the seller. However if you do complete you will still potentially be able to bring a claim against the seller in misrepresentation but it will be for damages only.
If you are still seeking advice in respect of this please feel free to contact us.
Hi, I purchased a property at auction last week and now I have decided that I made a mistake and no longer want it. Can exit out without any fees and if there are fees what is the vendor entitled to in terms of fees that I will need to pay. I have payed £19,000.00 deposit aswel, will I be able to get this back.
Unless the contract provides for a mechanism or trigger to bring it to an end, which would not make much sense, then you have probably committed to purchase the property.
You would need to check the contract that you agreed to before placing the winning bid in order to establish what you have contractually agreed to pay in the event that you do not proceed to completion.
Hi, I bought a property at auction, while we conducted our due diligence based on the information that was made available prior to bidding, the construction type of the property was not disclosed. When this happens, one would normally assume that the property is of standard construction. Post bid, it was then discovered that the property was of non standard BSIF construction which has been classified as defect as per Housing Defect Acts 1985. Which implies the property is not mortgageable and also non-favourable bridging loan options.
I reached out to the auctioneer and of course they played the “Buyer Beware” card saying they do not carry out surveys prior to auction. Whilst doing my research, I discovered the auctioneer had sold identical property on the same street about a year ago for which they have declared on that listing that the property was of non standard BSIF construction and it was sold at a rate cheaper than what I have payed today.
Non-disclosure of such vital detail, has affected me because if the construction type was disclosed, I wouldn’t have placed the bid and if I would have, the maximum bid would have been lower than what I have paid.
Could issue like mine be governed by Section 3 of the Misrepresentations Act 1967?
A seller is not obliged to volunteer any particular information about a property to a prospective buyer. Unless it can be said that a seller, or their agent (who should not engage in misleading practices), represented to you that the property was in some way a non-standard construction, it is unlikely that there would be a claim. Unless a seller says something to a buyer for the buyer to rely upon, it can only realistically be the case that the buyer has relied on his own information and assumptions in deciding whether or not to proceed.
We successfully bid for a two-bed property and paid our deposit in Apr 2024. While processing the bridging loan, we understood that it is classified as a one-bed house as there is no family bathroom and the valuation was too low.
Further digging about the property, we understood that the same property was advertised as a 1-bed property in Oct 2023 with a floor map from online history. With any changes, the same auction house advertised the property as a two-bed. We have completed the purchase process to honor the agreement and not lose the deposit, but we notified the sellers about the misleading advert before its completion.
I want your advise on suing the auction house for deliberately misleading advert. Do we have a point here to sue them? How do we proceed from here?
We are not sure about this. Fundamentally, for a misrepresentation claim to exists, there must be an inaccurate statement of fact. An opinion, or statement of law is not generally sufficient for a claim to arise.
Put into context, we suppose that you could strip every room out of a “one bedroom property” (i.e. kitchen, bathroom and living room) and then say it had four bedrooms (or at least four rooms that could be used as bedrooms). The fact that it didn’t have anything else would obviously be an issue (and a buyer might be entitled to assume that a property had a bathroom and kitchen, so perhaps not the best example), but the point is that this could be considered a statement of opinion – whilst the rooms might not be as intended by a prospective owner, as far as the seller was concerned, they were bedrooms. We are not aware of any statutory definition of a “bedroom”. If the issue is the lender’s classification of the property, then again, this is presumably their own opinion of what constitutes a one bedroomed property, illustrating the point. It would be for a buyer to ensure that whatever lending criteria which needed to be met was capable of being met by the property being purchased. If the buyer did not have this information, they would be proceeding at their own risk.
The fact that you completed may also have an impact on matters. Certainly, when it comes to a breach of contract, the aggrieved party may have the right to rescind the contract. However, if they proceed with the purchase nonetheless, there is a risk that they have legally affirmed, or “accepted” the breach of contract and impliedly agreed to waive any rights to pursue it.
After bidding and winning a bid for a property at auction, I found out that the seller had bought the house a month prior themselves. It that auction the house was described as having serious structural issues, and all associated documents were included. However in the auction I bid at, the now new owner chose to remove all signs of structural defects and present the property on the agents sheet and in the legal pack as though it was a normal house with no issues. It was by chance I found out the truth about what the seller had done. They are however choosing to not answer my questions and insist I complete.
This is likely a case of “buyer beware”. There is generally no duty on a seller of anything, including property, to disclose specific things about what they are selling. It is up to the buyer to decide whether or not they want to proceed based on the information that they have. If the buyer is not given the opportunity to ask questions, or indeed questions asked are not responded to, the position does not change. It is the buyer that has decided to take the risk in proceeding based on their own assumption and appetite for risk.
Sometimes, but the extent to which the principle will apply here and this would require careful consideration, a misrepresentation can occur by reason of something which is left unsaid. If it can genuinely be said that the property was represented as one with no issues of the nature that you have now discovered, and the seller was aware of those issues, then there may be a misrepresentation claim. However, such claims are risky, as a great deal turns on the extent to which it can be said that a reasonable buyer would have understood that the seller was representing that the property was free from defects. If there is room to suggest that the buyer made any assumptions themselves on the point, then the risk increases.
The fundamental basis of a misrepresentation claim is that one party induces another party to enter into the contract based on something that is factually inaccurate, and would have changed the other party’s mind about proceeding in some way. If a buyer of property has made assumptions, it cannot really be said that the seller said something that induced the buyer to enter into the contract.
hi i bought land at auction i asked for the legal pack the auction company told me to bid and i would get the auction pack,
they then asked for money still no auction pack
the wouldn’t tell me the size the pictures are of different land the description is wrong saying it has excellent access when it has none saying theres local amenities when theres none
im unsure where i stand i feel like i have been misled as its was a picture of grassland when its actually a small wood
This sounds very odd indeed, and possibly sharp practice, so you may wish to consider approaching the Property Ombudsman or any other redress scheme that the auctioneer is part of.
However, in law (and subject to a number of exceptions here and there, such as some consumer legislation), the basic position is always “buyer beware”. This means that it is up to the buyer to decide whether or not they want to make an offer and proceed with the purchase of anything. If a buyer has no information about what they are buying or making an offer on, then they proceed at their own risk.
However, there is one very old case, which might have some comparisons or application to your matter. This is the case of Atlantic Estates Ltd v Ezekiel [1991], in which it was held that there had been a misrepresentation because the auction pack showed a wine bar in use, when in fact the bar did not have a licence.
If there is a genuine mistake as to the subject matter of a contract, this can potentially have legal implications, potentially making the contract void or voidable.
Hi, I would really appreciate your advice on the following matter . I bid in an auction recently for a leasehold property. The sellers were initially very slow to reply to any of my solicitors queries . I had an agreement in principle before going into the auction but after survey it was rejected as property was not considered a suitable security . I then got in touch with a bridging lender who also rejected due to lack of leaseholder and landlord certificates. On the auction terms and conditions there is a section about lease holder certificates section G9.3 The agreed completion date is to be not earlier than the date five business days after the seller has given notice to the buyer that the licence has been obtained.
G9.6 If within three months of the contract date (or such longer period as the seller and buyer agree) the licence has not been obtained the seller or the buyer may (if not then in breach of any obligation under this condition G9) by notice to the other terminate the contract at any time before licence is obtained. That termination is without prejudice to the claims of either seller or buyer for breach of this condition G9.
Can I exit the transaction and terminate contract as it’s been 3 months since exchange and the documents have still not been provided but the seller has served notice and wants me to pay for damages . Kindly do help , cause I’ve had 3-4 mortgage applications declined , already lost a lot of money and can’t afford to pay for further damages as being claimed by the seller
We cannot provide specific advice on our website. Whilst we can provide some general guidance, this is not a substitute for properly considered legal advice. Please therefore do not take anything on our website as legal advice or rely on it when making any decisions. By way of example, what you appear to be referring to are RICS common auction terms. However, these may have been amended and the conduct and communications of the parties may also have had an impact on the legal position.
Subject to such matters as that which we refer to above, what you have referred to appears to be reference to those standard auction conditions, in particular the parts relating to whether or not the seller requires a licence to assign the leasehold interest that they intend to assign (i.e. consent from the landlord, which is not uncommon in leases). The basic position is that the buyer must respond to reasonable requests of the seller in this respect but if, after three months, the notice of assignment has not been received then yes, in theory notice to terminate the contract can be given, but this is without prejudice to any claims which may arise under the clause (for example, if the buyer has not complied with the lawful requests of the landlord).
Sorry to hear that this has been a distressing matter for you. I have recently suffered a huge loss in the auction process as well. Just wanted to know if you have suggestions about how you navigated through this.
Hi – I bought a property at auction with tenants in situ and is the process to complete. However, my solicitor has highlighted that the seller only bought the property 4 months ago from LPA receiver so has no possession on the property thus title is being sold as limited title guarantee. My solicitor has told me that I can get an indemnity insurance which is only 100 so it’s fine with me. However, since the seller solicitor will not provide any answers to inquiries, we are not sure if there is a gas safety safety certificate provided to tenant, thus pose a risk to issue notice s21 and we also don’t know where is the tenants’ deposit. They have provided me a disclaimer on which they have highlighted this risks.
I have asked my option if I did not continue to the sale, I would lost my deposit which is 8.5k and can pay penalties up to 10k. I am unsure now how to proceed, will it be better to just continue with the purchase and accept the unknown risk and if cannot mitigated, just sell the property again for another auction but might be sold in less price or even if the current seller has no possession, it can be easier to get possession on the property?
Even if we were instructed by you to advise, we could not make that decision for you. We think you are right to identify the fact that absent the service of a gas safety certificate on the tenant prior to taking up occupation can cause problems in terms of service of a valid Section 21 notice (we also undertake a large amount of residential possession claims for landlords).
As a firm, we in fact offer to all of our conveyancing clients the option of some advice about the tenancy when they are purchasing a property with a tenant in situ for the very reason that in recent years, the legal position with respect to assured shorthold tenancies has become a little more complicated, with pitfalls for the unweary landlord.
Whether or not you decide to proceed is really going to be based on whether or not you are prepared to take the risk that as long as the tenant is never in breach of the terms of the tenancy, you might find that you are never able to evict them. From a procedural point of view, you might also be unable to use the accelerated possession procedure if you do not have all of the documentation that you need to use this.
You might also want to consider the other grounds to obtain possession of a property. These are “Section 8” grounds and whilst most relate to breaches of the tenancy, there are a couple of other grounds which might apply if you do need possession of the property back in the future. These can be found in Schedule 2 of the Housing Act 1988.
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Dear Cunningtons,
We’ve bought a property via a modern method of auction. A condition of the sale was vacant possession at completion but tenants were still in situ after the 56 days. The seller then refused to communicate further with the auction house and has refused to exchange even after we said we were prepared to buy with tenants in situ.
The seller won’t withdraw from the sale and won’t exchange leaving us with having paid the reservation fee to the auction house but no property to show for it. Legal and mortgage fees have also been paid out.
Are we able to sue the seller for specific performance, breach of contract etc?
Best regards
Ben
Thank you for this and apologies for the delay in responding.
Assuming that a modern method of auction is the variety where you do not enter into a contract to purchase the property on the fall of the hammer but instead enter into a reservation agreement, there may be redress you have against the seller but it will depend on the content of the contract you did enter into and also the terms of the auction. The contents of these documents will determine what that redress, if any, is.
This will not likely be a claim in misrepresentation but potentially a claim in breach of contract, which is also something we can assist with.
Please feel free to contact us for a confidential discussion.
I have literally just sold my property via traditional auction. The buyer has just emailed to say it’s a mistake and he is mentally unwell. Part of the deposit was taken once the hammer fell with remainder of deposit to be paid within1 working day ( by Monday). He seemed perfectly coherent prior to this disclosure and I suspect is just using this as a means to try and wiggle put of being liable for the contract he entered into at auction.
Really can’t believe this! Any advice gratefully received – can he use mental health as valid reason to wiggle out of the contract?
Thank you for your comment. Without seeing the full paperwork relating to this situation I am not able to advise definitively but I will strive to give some pointers here.
Normally the situation is that the buyer must complete on the completion date or you will have redress against them pursuant to the terms of the contract. Mental health, however, is not something that I can say definitively one way or another. It sounds like he might be claiming that at the time he entered into the contract (i.e. he bid) he did not have mental capacity. Are you able to assist us with what exactly the mental health reasons he has cited are, as if he did not have capacity then the contract cannot have been said to have been properly formed, but that is a very high bar to surmount.
You also need to consider what exactly you want to do here and whether you want to force the sale to go ahead or try to recover the loss and damage you’ve undergone from him. Please feel free to contact us for a confidential discussion.
Hello,
I have encountered some issues and would appreciate guidance on the following points:
1. Misrepresentation in Property Auctions:
a) If an auction house provides assurances about the completeness of a legal pack, but significant issues are later discovered, could this amount to misrepresentation?
b) What remedies might be available to a buyer in such a situation?
2. Post-Auction Changes to Documentation:
a) What are the legal implications if an auctioneer alters documentation after an auction has concluded?
b) Could such alterations be considered a separate misrepresentation or breach of duty?
3. Auctioneer’s Disclosure Obligations:
a) What obligations do auctioneers have to disclose issues with a property before an auction?
b) Are there specific regulations governing auctioneers in property transactions?
4. Verbal Assurances from Auction Staff:
a) If an auction house staff member provides verbal assurances that are later disputed by the company, what recourse might a buyer have?
b) How does the concept of authority apply in such situations?
5. Completion Deadlines and Extensions:
a) If legal issues prevent meeting a completion deadline, what options are available to a buyer?
b) How can a buyer protect themselves from penalties due to delays beyond their control?
6. Right to Withdraw:
a) Under what circumstances might a buyer have the right to withdraw from an auction purchase?
b) What are the potential consequences of withdrawing?
7. Potential Damages:
a) What types of damages might a buyer be entitled to claim if issues arise after an auction purchase?
b) What evidence would typically be required to support such claims?
I would appreciate general guidance on these issues as they relate to property auction transactions.
Thank you for your time.
Thank you for this comment and apologies for the delay in responding. There are too many questions to answer on this forum but we can give the following general advice.
Firstly, auction contracts often are very much locked down in that they often contain entire agreement clauses and non-reliance clauses. These state that the buyer is only entitled to rely upon the contents of the contract itself and therefore is not able to bring any action further to what may have been said outside the contract. It is also often the case that the contract contains a clause that you agree that the seller is not forced to reply to any enquiries you make.
Secondly, the auction house will almost certainly be protected from any claims by its terms and conditions.
Thirdly, if you fail to complete on the purchase, you will likely lose the deposit and also potentially, subject to the contract’s provisions, be liable for the losses of and occasioned by the seller. However if you do complete you will still potentially be able to bring a claim against the seller in misrepresentation but it will be for damages only.
If you are still seeking advice, you might be interested in our Fixed Fee Misrepresentation Assessments.
Hi,
First of all thank you for the article and responses to comments.
I has purchased a flat on same road I live at auction for my elderly parents, and dad is also being treated for cancer.
The auction listing specifically mentioned 62 years lease and auctioneer told me the flat would be vacant on possession. This information was in addition to what was contained in the legal pack and on which basis a successful bid placed and deposit paid.
The sellers solicitors are not responding to any enquiries and in the absence of lease pack, that only 37 years lease remaining. We have also been told no keys will be given on completion.
I have paid £9.4k deposit and do not know whether to complete based on misleading information from the auctioneer – do I have valid grounds not to complete or pursue a claim against the auctioneer?
Any advice would be gratefully received.
Thank you
Thank you for this comment and apologies for the delay in responding. We are unfortunately unable to give specific legal advice over this medium as we have not full information as to what is going on here and have not had sight of any relevant documents, however, based on what you have said in your comment, we would mention the following.
Firstly, auction contracts often are very much locked down in that they often contain entire agreement clauses and non-reliance clauses. These state that the buyer is only entitled to rely upon the contents of the contract itself and therefore is not able to bring any action further to what may have been said outwith the contract. Therefore we would need to circumvent any such clauses in the contract. It is also often the case that the contract contains a clause that you agree that the seller is not forced to reply to any enquiries you make.
Secondly, it would not be a claim against the auctioneer necessarily as they are not party to the contract but against the seller.
Thirdly, if you fail to complete on the purchase, you will likely lose the deposit and also potentially, subject to the contract’s provisions, be liable for the losses of and occasioned by the seller. However if you do complete you will still potentially be able to bring a claim against the seller in misrepresentation but it will be for damages only.
If you are still seeking advice in respect of this please feel free to contact us.
Hi, I purchased a property at auction last week and now I have decided that I made a mistake and no longer want it. Can exit out without any fees and if there are fees what is the vendor entitled to in terms of fees that I will need to pay. I have payed £19,000.00 deposit aswel, will I be able to get this back.
Thank you
Thank you for your comment.
Unless the contract provides for a mechanism or trigger to bring it to an end, which would not make much sense, then you have probably committed to purchase the property.
You would need to check the contract that you agreed to before placing the winning bid in order to establish what you have contractually agreed to pay in the event that you do not proceed to completion.
Hi,
I bought a property at auction, while we conducted our due diligence based on the information that was made available prior to bidding, the construction type of the property was not disclosed. When this happens, one would normally assume that the property is of standard construction.
Post bid, it was then discovered that the property was of non standard BSIF construction which has been classified as defect as per Housing Defect Acts 1985. Which implies the property is not mortgageable and also non-favourable bridging loan options.
I reached out to the auctioneer and of course they played the “Buyer Beware” card saying they do not carry out surveys prior to auction. Whilst doing my research, I discovered the auctioneer had sold identical property on the same street about a year ago for which they have declared on that listing that the property was of non standard BSIF construction and it was sold at a rate cheaper than what I have payed today.
Non-disclosure of such vital detail, has affected me because if the construction type was disclosed, I wouldn’t have placed the bid and if I would have, the maximum bid would have been lower than what I have paid.
Could issue like mine be governed by Section 3 of the Misrepresentations Act 1967?
Thank you for your comment.
A seller is not obliged to volunteer any particular information about a property to a prospective buyer. Unless it can be said that a seller, or their agent (who should not engage in misleading practices), represented to you that the property was in some way a non-standard construction, it is unlikely that there would be a claim. Unless a seller says something to a buyer for the buyer to rely upon, it can only realistically be the case that the buyer has relied on his own information and assumptions in deciding whether or not to proceed.
Dear Experts,
We successfully bid for a two-bed property and paid our deposit in Apr 2024. While processing the bridging loan, we understood that it is classified as a one-bed house as there is no family bathroom and the valuation was too low.
Further digging about the property, we understood that the same property was advertised as a 1-bed property in Oct 2023 with a floor map from online history. With any changes, the same auction house advertised the property as a two-bed. We have completed the purchase process to honor the agreement and not lose the deposit, but we notified the sellers about the misleading advert before its completion.
I want your advise on suing the auction house for deliberately misleading advert.
Do we have a point here to sue them?
How do we proceed from here?
Thanks in advance.
Thank you for your comment.
We are not sure about this. Fundamentally, for a misrepresentation claim to exists, there must be an inaccurate statement of fact. An opinion, or statement of law is not generally sufficient for a claim to arise.
Put into context, we suppose that you could strip every room out of a “one bedroom property” (i.e. kitchen, bathroom and living room) and then say it had four bedrooms (or at least four rooms that could be used as bedrooms). The fact that it didn’t have anything else would obviously be an issue (and a buyer might be entitled to assume that a property had a bathroom and kitchen, so perhaps not the best example), but the point is that this could be considered a statement of opinion – whilst the rooms might not be as intended by a prospective owner, as far as the seller was concerned, they were bedrooms. We are not aware of any statutory definition of a “bedroom”. If the issue is the lender’s classification of the property, then again, this is presumably their own opinion of what constitutes a one bedroomed property, illustrating the point. It would be for a buyer to ensure that whatever lending criteria which needed to be met was capable of being met by the property being purchased. If the buyer did not have this information, they would be proceeding at their own risk.
The fact that you completed may also have an impact on matters. Certainly, when it comes to a breach of contract, the aggrieved party may have the right to rescind the contract. However, if they proceed with the purchase nonetheless, there is a risk that they have legally affirmed, or “accepted” the breach of contract and impliedly agreed to waive any rights to pursue it.
After bidding and winning a bid for a property at auction, I found out that the seller had bought the house a month prior themselves. It that auction the house was described as having serious structural issues, and all associated documents were included. However in the auction I bid at, the now new owner chose to remove all signs of structural defects and present the property on the agents sheet and in the legal pack as though it was a normal house with no issues. It was by chance I found out the truth about what the seller had done. They are however choosing to not answer my questions and insist I complete.
This is likely a case of “buyer beware”. There is generally no duty on a seller of anything, including property, to disclose specific things about what they are selling. It is up to the buyer to decide whether or not they want to proceed based on the information that they have. If the buyer is not given the opportunity to ask questions, or indeed questions asked are not responded to, the position does not change. It is the buyer that has decided to take the risk in proceeding based on their own assumption and appetite for risk.
Sometimes, but the extent to which the principle will apply here and this would require careful consideration, a misrepresentation can occur by reason of something which is left unsaid. If it can genuinely be said that the property was represented as one with no issues of the nature that you have now discovered, and the seller was aware of those issues, then there may be a misrepresentation claim. However, such claims are risky, as a great deal turns on the extent to which it can be said that a reasonable buyer would have understood that the seller was representing that the property was free from defects. If there is room to suggest that the buyer made any assumptions themselves on the point, then the risk increases.
The fundamental basis of a misrepresentation claim is that one party induces another party to enter into the contract based on something that is factually inaccurate, and would have changed the other party’s mind about proceeding in some way. If a buyer of property has made assumptions, it cannot really be said that the seller said something that induced the buyer to enter into the contract.
hi i bought land at auction i asked for the legal pack the auction company told me to bid and i would get the auction pack,
they then asked for money still no auction pack
the wouldn’t tell me the size
the pictures are of different land
the description is wrong saying it has excellent access when it has none
saying theres local amenities when theres none
im unsure where i stand i feel like i have been misled as its was a picture of grassland when its actually a small wood
hope you can help
This sounds very odd indeed, and possibly sharp practice, so you may wish to consider approaching the Property Ombudsman or any other redress scheme that the auctioneer is part of.
However, in law (and subject to a number of exceptions here and there, such as some consumer legislation), the basic position is always “buyer beware”. This means that it is up to the buyer to decide whether or not they want to make an offer and proceed with the purchase of anything. If a buyer has no information about what they are buying or making an offer on, then they proceed at their own risk.
However, there is one very old case, which might have some comparisons or application to your matter. This is the case of Atlantic Estates Ltd v Ezekiel [1991], in which it was held that there had been a misrepresentation because the auction pack showed a wine bar in use, when in fact the bar did not have a licence.
If there is a genuine mistake as to the subject matter of a contract, this can potentially have legal implications, potentially making the contract void or voidable.
Hi, I would really appreciate your advice on the following matter .
I bid in an auction recently for a leasehold property. The sellers were initially very slow to reply to any of my solicitors queries . I had an agreement in principle before going into the auction but after survey it was rejected as property was not considered a suitable security . I then got in touch with a bridging lender who also rejected due to lack of leaseholder and landlord certificates. On the auction terms and conditions there is a section about lease holder certificates
section G9.3 The agreed completion date is to be not earlier than the date five business days after the seller has given notice to the buyer that the licence has been obtained.
G9.6 If within three months of the contract date (or such longer period as the seller and buyer agree) the licence has not been obtained the seller or the buyer may (if not then in breach of any obligation under this condition G9) by notice to the other terminate the contract at any time before licence is obtained. That termination is without prejudice to the claims of either seller or buyer for breach of this condition G9.
Can I exit the transaction and terminate contract as it’s been 3 months since exchange and the documents have still not been provided but the seller has served notice and wants me to pay for damages . Kindly do help , cause I’ve had 3-4 mortgage applications declined , already lost a lot of money and can’t afford to pay for further damages as being claimed by the seller
Thank you for your comment.
We cannot provide specific advice on our website. Whilst we can provide some general guidance, this is not a substitute for properly considered legal advice. Please therefore do not take anything on our website as legal advice or rely on it when making any decisions. By way of example, what you appear to be referring to are RICS common auction terms. However, these may have been amended and the conduct and communications of the parties may also have had an impact on the legal position.
Subject to such matters as that which we refer to above, what you have referred to appears to be reference to those standard auction conditions, in particular the parts relating to whether or not the seller requires a licence to assign the leasehold interest that they intend to assign (i.e. consent from the landlord, which is not uncommon in leases). The basic position is that the buyer must respond to reasonable requests of the seller in this respect but if, after three months, the notice of assignment has not been received then yes, in theory notice to terminate the contract can be given, but this is without prejudice to any claims which may arise under the clause (for example, if the buyer has not complied with the lawful requests of the landlord).
Hi Shantanu,
Sorry to hear that this has been a distressing matter for you. I have recently suffered a huge loss in the auction process as well. Just wanted to know if you have suggestions about how you navigated through this.
Hi – I bought a property at auction with tenants in situ and is the process to complete. However, my solicitor has highlighted that the seller only bought the property 4 months ago from LPA receiver so has no possession on the property thus title is being sold as limited title guarantee. My solicitor has told me that I can get an indemnity insurance which is only 100 so it’s fine with me. However, since the seller solicitor will not provide any answers to inquiries, we are not sure if there is a gas safety safety certificate provided to tenant, thus pose a risk to issue notice s21 and we also don’t know where is the tenants’ deposit. They have provided me a disclaimer on which they have highlighted this risks.
I have asked my option if I did not continue to the sale, I would lost my deposit which is 8.5k and can pay penalties up to 10k. I am unsure now how to proceed, will it be better to just continue with the purchase and accept the unknown risk and if cannot mitigated, just sell the property again for another auction but might be sold in less price or even if the current seller has no possession, it can be easier to get possession on the property?
Thank you for your comment.
Even if we were instructed by you to advise, we could not make that decision for you. We think you are
right to identify the fact that absent the service of a gas safety certificate on the tenant prior to taking
up occupation can cause problems in terms of service of a valid Section 21 notice (we also undertake a
large amount of residential possession claims for landlords).
As a firm, we in fact offer to all of our conveyancing clients the option of some advice about the tenancy
when they are purchasing a property with a tenant in situ for the very reason that in recent years, the
legal position with respect to assured shorthold tenancies has become a little more complicated, with
pitfalls for the unweary landlord.
Whether or not you decide to proceed is really going to be based on whether or not you are prepared to
take the risk that as long as the tenant is never in breach of the terms of the tenancy, you might find
that you are never able to evict them. From a procedural point of view, you might also be unable to use
the accelerated possession procedure if you do not have all of the documentation that you need to use
this.
You might also want to consider the other grounds to obtain possession of a property. These are
“Section 8” grounds and whilst most relate to breaches of the tenancy, there are a couple of other
grounds which might apply if you do need possession of the property back in the future. These can be
found in Schedule 2 of the Housing Act 1988.