Back To “Dealing with property auction issues

267 thoughts on “Dealing with property auction issues”

  1. 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

    1. 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).

    2. 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.

  2. 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?

    1. 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.

Leave a Reply

Your email address will not be published. Required fields are marked *

I accept the Privacy Policy