Property Auctions: Buyers Beware - Know Your Risks!

 

Many property purchasers attend auctions and get carried away with their bidding, however, they should be aware of the risks in purchasing property without first taking legal advice on the legal pack presented by the Seller.

Properties are often presented for sale at auction for a reason, possibly missing title, unadopted roads and sewers, or likely to suffer from environmental contamination. Often these defects are hidden in a raft of paperwork which would need to be deciphered in the round.

Buyers who have not taken advice may suffer difficulties and delays in selling their property or granting a mortgage over that same property later.  Lenders are becoming more stringent in their requirements to grant lending on properties, requiring that all regulations have been complied with before releasing their funds.  Although a property may seem compliant with a quick scan of a legal pack, this may not be the case.

Lenders are becoming more stringent in their
requirements to grant lending on properties,
requiring that all regulations have been
complied with BEFORE releasing their funds   

Beverley Heys, Commercial Property Associate
Lawson-West Solicitors, Leicester 

 

"It's always worthwhile taking advice and if found that the property is not mortgageable or suitable for your purposes, then walking away from the purchase is the best course of action before you place your bid.

It is important to remember that if you buy at Auction, once that hammer falls you have just exchanged contracts and are committed to the purchase. Failure to complete breaches the contract and can bring significant penalties, usually including forfeiting the 10% deposit and any other fees paid out and perhaps even damages.

We have a specialist property team ready to advise you on all aspects of the legal title, we can check through the legal pack for you, before auction, and provide you with a summary of the legal issues so that you are armed with the knowledge you need to be secure in your investment decision."

 

 

 

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