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With an Auction sale or purchase, when the gavel falls, you have exchanged contracts

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.

Auction Legal Packs & Special Conditions

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.

What is in an Auction Legal Pack?

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:

  • Official Copy of Register of Title (Office Copy Entry) - in a nutshell, who has owned it and now owns it. Sometimes including the existence of a compulsory purchase order.
  • Land Registry and Local Searches - Any outstanding statutory notices, planning decisions, breaches of planning or building regulations and highways, proposals for new road rail schemes.
  • pecial Conditions of Sale – Legal information outside the Standard Auction Terms and Conditions pertaining to that particular Lot (very important, please see below).
  • Property Information Form – Important information provided by the sellers to the buyers, including boundaries, planning and works to the property, guarantees and neighbour disputes.
  • Fixtures and Fittings Form – what is going to be left behind when the seller vacates makes it completely clear on what is and isn't included in the sale. Or indeed what the buyer may have to pay extra for.
  • There may also be other documentation pertaining to the asset, e.g. Lease Agreement, Tenancy Agreement, Planning Permission Documentation & Management Information Pack.

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.

What do I need to look out for in an Auction Legal Pack?

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

What to look out for in the Auction Special Conditions of Sale.

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:

  1. When is the Completion date?
    1. Can I meet the schedule?
    2. Can my solicitor/lawyer work to the schedule?
    3. Will my finance be in place in time?
    4. Does it work to work to my advantage or disadvantage?
  2. Are there any extra costs or charges?
    1. Now and in the future?
    2. Are these included in my overall calculations?
    3. Will it impact on future value or saleability?

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.

Do I need to use a lawyer or solicitor before the auction?