This creates a legally binding agreement between both parties. There is then a limited period of time to formerly 'complete' transferring what is more commonly a significant asset, for a large sum of money.
The auction conveyancing process is therefore condensed into a matter of days rather than months. For both buyer and seller, this speed can prove to be extremely advantageous; however, it should not diminish the significance of the transaction – there are many considerations for both parties.
As well as assessing the physical quality of your potential purchase, you need to ensure you are aware of the legal and financial ramifications of your asset. This information should largely be contained in the Auction Legal Pack & Special Conditions therein.
A Legal Pack is the documentation that provides potential buyers with information on the legal standing of the asset and Special Conditions of the transaction. It is usually prepared by the seller’s lawyers or solicitors but is occasionally by the seller themselves.
An auction Legal Pack normally includes:
The Packs are available to download and a hard copy will usually be available in the auction room too. Prior to the auction, it is also worth checking if there has been an Addendum, which is information that may have changed to the Lot/Pack since the time of original distribution.
As well as information on the history and status of what you’re buying, from the Local Searches, Title Deeds, the Property Information Form (TA6) and Fittings and contents form (TA10), there is also the additional but ever critical Special Conditions, which will include the schedule and any additional costs involved. All of which combines to provide the legal overview of the asset you are looking to buy.
Just as you would normally take time to view a property to assess its physical structure, possibly employing a builder of surveyor to provide a professional survey, prior to auction, time and resources should also be devoted to understand exactly what you are buying; specifically any risk, limitations or costs involved in that.
Although it is not obligatory to take professional advice prior to auction, unless you can fully understand a Legal Pack, having a trained professional undertake due diligence on your behalf before you bid may prove money well spent.
For more information on the analysis and reporting on the Legal Pack - please review Auction Legal Process
The auction Special Conditions of Sale detail those conditions that are supplementary to the standard auction Terms and Conditions for that particular Lot. These include the decisive Completion schedule or date, specific clauses or costs you may incur upon Completion, e.g. vendor’s legal costs, or during the course of your ownership, e.g. overage rights.
Two key considerations for potential auction buyers when reviewing the Special Conditions of Sale should be:
Auction Special Conditions used to be somewhat dressed up with unnecessary complex ‘legal terminology’ but these days most Special Conditions are drawn up clearly to help potential buyers understand what they are buying. That said, if you’re struggling with any terms have a look at auctionconveyancing.com/auction-terminology or let us know.