Introduction
It is becoming increasingly popular to buy property or land for development purposes at auction, as savvy buyers believe they may be able to secure property, or land at a price with real value for money.
According to information supplied by the “Essential Information Group” - who provide information on virtually every property auction in the UK, over 32,000 properties were sold at auction in the period March 2022 to February 2023. The value of auction sales equated to over £4.8 billion in premiums. Both residential and commercial sales increased by a combined average of nearly 12% over the same period
Kingsfords Auction Property and Conveyancing Solicitors
Daninder Kaur-Dhillon is a Commercial Property Lawyer and heads our specialist team, dealing with auction purchases and sales. Her main experience is in commercial property/real estate with particular expertise in landlord and tenant law. Outside of her experience dealing with auction house transactions, Daninder have represented various commercial clients, including acting on behalf of major shopping centres in negotiations of their leases, private clients in respect of industrial estates, lease extensions, licences and all other relative landlord and tenant work.
Daninder and the team are equally happy to act for individuals looking to buy or sell individual properties, to new or existing landlords seeking to start or build their buy to let portfolios. The team also have experience, when acting for developers; either securing plots of land, or securing property with potential Planning Permission to build and develop.
Kingsfords can act as a “One Stop Shop” by undertaking the initial auction work and the subsequent legal work, once the client has re-developed the site and is looking to re-sell the properties.
In essence Daninder and the team are “big enough to cope, but small enough to care”, regardless of your requirements in an auction setting.
Please do not hesitate to contact Daninder, based at our Ashford office via email dkd@kingsfords.net or her direct dial telephone 01233 648411 to discuss your requirements.
Daninder’s website profile can be viewed here: Daninder Kaur-Dhillon (kingsfords-solicitors.com)
Some of the core information useful to those operating in an auction setting follow.
Buying Property at Auction
When buying at auction, the conveyancing process is quite different to the usual conveyancing transaction. As the auctioneer’s hammer drops, contracts are deemed to have been exchanged with a binding commitment to complete the purchase. You may be liable to pay the auctioneer their fees at this point in addition to a 10% deposit being immediately payable. The legal necessities must then be progressed at speed. Invariably it is a condition that the purchase must be completed within 28 days of exchange, at which point the remaining 90% of the purchase price must be discharged.
It is imperative therefore that any required finance to fund the purchase is accessible, or perhaps, bridging finance secured as an option. .
To be successful at auction, our solicitors recognise the essential need for speed throughout the process. Equally our experts recognise that it is essential to provide accurate legal advice and are happy to discuss all aspects with you.
Preparation is key —Auction Legal Packs
It is important to be as fully informed about your prospective purchase, as is possible. Once any property of interest has been identified from the auctioneer’s catalogue, or website and your local research complete, Kingsfords will be happy to review the legal pack of information supplied by the vendor's solicitor.
This is crucial, as the review could identify adverse issues, which a lay person may not necessarily pick up. There may be adverse restrictions or covenants on the land, which inhibit its use or development, or the legal title to the property may be defective. If the premises are leasehold for example and the remaining term of the lease is less than 70 years, securing finance to assist with the purchase could be very problematic.
In essence avoid those costly problems by inviting the Kingsford team to review the auction pack, which is likely to comprise any Title Deeds, (including leases if applicable), Land Registry Office Copy Entries, Special Conditions of Sale, Searches and standard Replies to Pre-contract Enquiries.
As part of your due diligence including physically visiting the target property or land, it makes sense to commission any surveys of the property before the auction itself. The more research and care you take the greater your chances of being successful at the auction. It is essential that you know what you can afford before bidding at the auction, as once committed matters must proceed at pace.
Completion
We will deal with the conveyancing processes to completion, conscious of the fact that in default of completing within 28 days you risk losing your deposit.
Selling at Auction
Selling any land or property at auction can be more efficient and far quicker than the traditional Estate Agency route. As before preparation is key and most notably the collation of the Auction Pack, containing all of the required documents referred to previously, must be prepared and released to the Auction house and for distribution to interested buyers.
If an acceptable bid above your reserve price is secured at auction, Kingsfords will engage with the purchaser’s solicitors allowing the sale to run smoothly to completion.