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This is a question that is frequently asked on internet search sites, and the answer is ‘yes, definitely’, you should speak to a solicitor before buying a property at auction.

The reason for this is simple: as soon as the hammer falls on your bid, you will be legally bound to purchase the property (whatever its condition) and if you try to backout not only will you lose your deposit, you may also be liable to pay the seller compensation. It is therefore vital that you go into the process with your eyes fully and firmly open!

As Anees Khan, head of our residential conveyancing team explains:

“Buying a property at auction can have many advantages, but there are also potential pitfalls that you need to be aware of and which may not be uncovered in advance of the auction if you fail to take prior legal advice. These may include obvious things like the need to do a bit of structural or renovation work, but can also include less obvious things like the existence of Japanese knotweed or a coal mining entry which may make it impossible for you to get a mortgage, a restrictive covenant which means that the property cannot be extended or developed in the way that you would like, or even a lack of access rights over a shared driveway which may mean that you have no lawful means of getting to and from the property that you are keen to purchase.”

How we can help

For a low cost, fixed fee we can support you through the process of buying an auction property and ensure that there are no nasty surprises. Our service includes reviewing all of the property information and contract documentation, and providing you with a comprehensive and easy to understand pre-purchase report. And where your bid is successful, we can also take care of the legal steps needed to complete the transaction and any associated mortgage – with the cost of the pre-auction work deducted from our conveyancing charges!

Where possible, we would advise you to contact us at least two weeks before the auction takes place. However, where you have decided to bid on something at the last minute – for example, to add to your buy-to-let portfolio, or because it looks like a good renovation and resale opportunity – then we can usually produce a pre-auction report in as little as 24 to 48 hours.

Here are some of the key things to bear in mind as a potential purchaser.

Buying at auction

When buying a property at auction, the terms of the sale will be fixed by the contract documents contained in the Auction Catalogue and in the accompanying Legal Pack – copies of which can usually be obtained up to four weeks before the auction takes place.

It is important that you take time to consider these terms and to ensure that you understand what they mean and that you are happy to proceed on the basis proposed as, unlike in private sales, there will not usually be any scope for negotiation over the terms of an auction sale.

Legal Pack

While the Auction Catalogue will contain the conditions of sale, and basic information like the address of the property and whether it is being sold on a freehold or leasehold basis, more detailed information and any special sale conditions that apply will be contained in the Legal Pack which will have been prepared by the seller’s solicitors.

The content of the Legal Pack should be carefully scrutinised to check that the property is as advertised and that there are no potential problems of which you are not already aware.

What a lot of buyers fail to realise is that the onus is on you to satisfy yourself that everything is in order, and that the extent of the seller’s obligations to tell you about potential problems is limited to highlighting issues affecting the legal title to the property, which cannot be remedied, and which could not be discovered by you, yourself, i.e. by checking the Legal Pack, commissioning searches and reports and by carrying out a physical inspection.

By consulting a lawyer in advance of the auction taking place, you can ensure that the content of the Legal Pack is fully considered, that all prudent checks are carried out, that the seller is questioned about anything that is not clear, and that any potential problems are identified and remedied where possible so that you can proceed with confidence or pull out as appropriate.

Common problems

Our residential conveyancing team regularly receive calls from people who have bought at auction without having first obtained legal advice, and who are desperately trying to get themselves out of the deal after realising that the property is not as they thought it was.

Frequently encountered problems include:

• The actual boundaries of the property not matching up with what you can see on the ground, with the result that the sale did not include all of the land the buyer expected;
• The property being subject to restrictive covenants and ‘use’ conditions which severely limit what the buyer can do with the property going forward;
• The existence of unexpected rights of way across the property, which will not only affect the buyer’s privacy but also any potential development plans; 
• The inclusion of an overage clause in the sale agreement, which means that the buyer will have to pay the seller a further fee if they are successful in securing planning permission;
• Planning breaches and outstanding enforcement notices which may leave the buyer susceptible to a fine or having to carry out unexpected building works; and
• Sitting tenants who currently occupy the property under a type of tenancy which means that they cannot be easily evicted or in respect of which they pay below-market rent.

Type of property

There are many reasons why a seller may choose to sell a property at auction, including the speed of the process and the possibility of achieving a good price if you can encourage would-be-buyers to enter a bidding war. However, it must be borne in mind that many properties sold at auction are there because an open market sale would be hard to achieve, for example because the property has structural problems or is saddled with restrictions which affect the use to which the property can be put. You therefore must be on your guard.

More information

To find out more, please contact Anees on 0800 195 6412 or send an email to aneeskhan@steplegal.co.uk. If you would like to access our conveyancing service with the help of a Polish translator, then please contact Agnieszka Kulas on 01270 254 064.