288 thoughts on “Dealing with property auction issues”
I bought an auction property in Oct 2020, an 8 bed HMO, and should have completed in Dec and now have been issued a notice to complete for next Tue, 09 March 2021.
I had a solicitor check the legal pack and advised all was ok prior to auction.
My mortgage company issued an offer knowing this was an auction purchase with 8 weeks to complete.
With two weeks remaining before completion they sent my solicitor their requirements which basically said they wanted all searches to be done again as the legal pack had private searches and they needed public searches.
Thankfully the seller allowed us to extend but throughout this process there has been no urgency from the mortgage company solicitors with new requirements from them coming in dribs and drabs. Hence the seller solicitor has now refused to answer any more queries and issued a notice to complete.
I have set up a bridge to get the purchase over the line and considerable extra cost.
The mortgage solicitor has been replaced by one of the more senior partners which tells me the previous solicitor was not experienced. This would make sense as she had asked me to confirm that I had applied forban HMO licence a week ago. Anyone with any experience would know that I cannot apply until completion has happened. I have made several attempts to set up meetings with the HMO officer , in preparation of applying for one, but had to cancel as completions were delayed again and again.
A week ago the solicitor queried the rent being paid to landlord as it did not equate to rent stated. It was obvious to everyone that the agent’s commission had been deducted . But why was this asked for so late in the day.
A condition of the mortgage offer was that an asbestos report is to be carried out.. the seller should have legally carried it out himself and my solicitor had not realised this. It does not specify whether this should be carried prior to completion nor does it specify who should carry it out. I , my broker and solicitor thought this was something I would have to get done post completion due to shortage of time to completion. A couple of weeks ago the mortgage solicitor and my solicitor are insisting the seller gets this report. Not surprisingly they refused .
The offer said I should have adequate insurance which I have got but it did not say that the mortgage co be included as an interested party. This they asked for late in the process.
So I wonder if I have any grounds for making the mortgage company responsible for the extra costs incurred by these delays.
There are lots of examples of the lack of urgency with this case from the mortgage company. They knew it was an auction sale with tight deadlines and so should never have agreed to have taken this purchase on.
It is difficult to see who might be at fault here and for what, but dealing specifically with your comment regarding whether or not a mortgage lender could be liable for any delays, we are not immediately aware of any case law or other legal principle that would impose a duty of care on a lender in this way. Whilst a claim could be advanced, we suspect that the argument in response to any allegation would be that it is for a buyer to ensure that they have the finance in place that they need before bidding on a property. This is not to say that a potential claim does not exist, just that we are not immediately aware of any legal principles which might lead a lender to be liable in these circumstances. It may be worthwhile raising a complaint with the lender and seeing what is received in response.
I have recently purchased a residential land in auction for GBP26, but subsequently my conveyance solicitor advised me there are several issues with the land (title not registered, ongoing potential repairment liabilility etc. that may have disclosed in the legal pack), I decided to pull out. However I have to pay GBP7000 in total (5000 deposit, 500 buyer premium and 1500 Admin fee) which I think is inbalance or not fair. Also the conveyance solicitor advise me there are likely recovery of the deposit as there are problems with their legal pack but its firm doesn’t cover this part. Therefore I would like to check if you will could handle this kind of case?
This firm is able to assist in matters such as these, but we are unable to confirm the position without sight of the relevant documentation. On a broad basis, a seller is not obliged to put anything in particular into an auction pack, and the risk is on the buyer to decide whether or not to proceed based on the information that they have or that they can obtain.
If they proceed to bid on the property and win the lot and then decide to withdraw, in all probability the contractually agreed fees would still likely be payable.
This is different to the situation where something in the auction pack is misleading which the buyer relies upon and if obliged to complete would cause a loss. In such circumstances there may be a basis to rescind the contract. Rescission is the means by which a Court can “reverse” the contract and would potentially be able to order a refund of sums paid.
We purchased a free hold property from auction and completed on 14 Aug 2020, the issue is the seller purchased the same property in June 2020, their application at land registry is still on hold, because their seller did not have the right paperwork namely power of attorney (full copy of the OPG stamped POA is requested by land registry), so they were asked to provide this, we have been in touch with them, initially they denied this but letter through their solicitor acknowledged this and asked us for more time to provide the paperwork. This has delayed our application and as result land registry will not transfer the property to our name until they deal with their application first. Do we have a case against our buyer?
It is unlikely there is any sort of claim here as there is in particular, no loss. If you have paid for the property, you are the owners of it but are not yet the registered legal proprietors. Applications to the Land Registry are dealt with in the order that they are received. The Land Registry continues to suffer from significant delays and your application will almost certainly not be dealt with before the seller’s. Only if the sellers are not registered or there is some other reason why they were not entitled to sell the property would there really be any potential scope for a claim.
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I bought an auction property in Oct 2020, an 8 bed HMO, and should have completed in Dec and now have been issued a notice to complete for next Tue, 09 March 2021.
I had a solicitor check the legal pack and advised all was ok prior to auction.
My mortgage company issued an offer knowing this was an auction purchase with 8 weeks to complete.
With two weeks remaining before completion they sent my solicitor their requirements which basically said they wanted all searches to be done again as the legal pack had private searches and they needed public searches.
Thankfully the seller allowed us to extend but throughout this process there has been no urgency from the mortgage company solicitors with new requirements from them coming in dribs and drabs. Hence the seller solicitor has now refused to answer any more queries and issued a notice to complete.
I have set up a bridge to get the purchase over the line and considerable extra cost.
The mortgage solicitor has been replaced by one of the more senior partners which tells me the previous solicitor was not experienced. This would make sense as she had asked me to confirm that I had applied forban HMO licence a week ago. Anyone with any experience would know that I cannot apply until completion has happened. I have made several attempts to set up meetings with the HMO officer , in preparation of applying for one, but had to cancel as completions were delayed again and again.
A week ago the solicitor queried the rent being paid to landlord as it did not equate to rent stated. It was obvious to everyone that the agent’s commission had been deducted . But why was this asked for so late in the day.
A condition of the mortgage offer was that an asbestos report is to be carried out.. the seller should have legally carried it out himself and my solicitor had not realised this. It does not specify whether this should be carried prior to completion nor does it specify who should carry it out. I , my broker and solicitor thought this was something I would have to get done post completion due to shortage of time to completion. A couple of weeks ago the mortgage solicitor and my solicitor are insisting the seller gets this report. Not surprisingly they refused .
The offer said I should have adequate insurance which I have got but it did not say that the mortgage co be included as an interested party. This they asked for late in the process.
So I wonder if I have any grounds for making the mortgage company responsible for the extra costs incurred by these delays.
There are lots of examples of the lack of urgency with this case from the mortgage company. They knew it was an auction sale with tight deadlines and so should never have agreed to have taken this purchase on.
Thank you for your comment.
It is difficult to see who might be at fault here and for what, but dealing specifically with your comment regarding whether or not a mortgage lender could be liable for any delays, we are not immediately aware of any case law or other legal principle that would impose a duty of care on a lender in this way. Whilst a claim could be advanced, we suspect that the argument in response to any allegation would be that it is for a buyer to ensure that they have the finance in place that they need before bidding on a property. This is not to say that a potential claim does not exist, just that we are not immediately aware of any legal principles which might lead a lender to be liable in these circumstances. It may be worthwhile raising a complaint with the lender and seeing what is received in response.
Hi,
I have recently purchased a residential land in auction for GBP26, but subsequently my conveyance solicitor advised me there are several issues with the land (title not registered, ongoing potential repairment liabilility etc. that may have disclosed in the legal pack), I decided to pull out. However I have to pay GBP7000 in total (5000 deposit, 500 buyer premium and 1500 Admin fee) which I think is inbalance or not fair. Also the conveyance solicitor advise me there are likely recovery of the deposit as there are problems with their legal pack but its firm doesn’t cover this part. Therefore I would like to check if you will could handle this kind of case?
Thank you for your comment.
This firm is able to assist in matters such as these, but we are unable to confirm the position without sight of the relevant documentation. On a broad basis, a seller is not obliged to put anything in particular into an auction pack, and the risk is on the buyer to decide whether or not to proceed based on the information that they have or that they can obtain.
If they proceed to bid on the property and win the lot and then decide to withdraw, in all probability the contractually agreed fees would still likely be payable.
This is different to the situation where something in the auction pack is misleading which the buyer relies upon and if obliged to complete would cause a loss. In such circumstances there may be a basis to rescind the contract. Rescission is the means by which a Court can “reverse” the contract and would potentially be able to order a refund of sums paid.
We purchased a free hold property from auction and completed on 14 Aug 2020, the issue is the seller purchased the same property in June 2020, their application at land registry is still on hold, because their seller did not have the right paperwork namely power of attorney (full copy of the OPG stamped POA is requested by land registry), so they were asked to provide this, we have been in touch with them, initially they denied this but letter through their solicitor acknowledged this and asked us for more time to provide the paperwork. This has delayed our application and as result land registry will not transfer the property to our name until they deal with their application first. Do we have a case against our buyer?
Thank you for your comment.
It is unlikely there is any sort of claim here as there is in particular, no loss. If you have paid for the property, you are the owners of it but are not yet the registered legal proprietors. Applications to the Land Registry are dealt with in the order that they are received. The Land Registry continues to suffer from significant delays and your application will almost certainly not be dealt with before the seller’s. Only if the sellers are not registered or there is some other reason why they were not entitled to sell the property would there really be any potential scope for a claim.