Jump to content


Why does Caveat emptor apply at auctions?

Recommended Posts

But the contract has to state that the property is sold either:

a. with vacant possession; or

b. subject to disclosed tenancies.

Share this post


Link to post
Share on other sites

ah I see now :)

 

It would all come out in the end eventually.

Share this post


Link to post
Share on other sites

Typical example, saw a one bed house last week which was converted into two bedsits with a bathroom. I was suspicious as the current owner only had it for 9 months, despite £20k a year rent. The covenants stated it couldn't be converted, plus there were no documents stating permission had been granted to convert it into two flats. On the day of the auction the guide price dropped by £40k, despite many viewings.

Edited by poppet2

Share this post


Link to post
Share on other sites

20k a year rent?? Where was this place??

 

Did the place sell?

Share this post


Link to post
Share on other sites
20k a year rent?? Where was this place??

 

Did the place sell?

 

Łondon, and it sold for £121k.

Edited by poppet2

Share this post


Link to post
Share on other sites

I did wonder if that was the case.

I'd bet that the buyer knows full well the issues with the property, but is willing to take a gamble due to the low purchase price and huge rental income.

 

If you want to see less of that kinda thing you are well within your rights to lodge a complaint with the council building control, they should investigate and enforce in such a case.

Share this post


Link to post
Share on other sites

The main thing is always to have your solicitor read the Auction contract (and all items deposited with it).

You need a detailed, written report on what's there- and, just as important, what's not.

That way, you know precisely for what you're bidding.

Otherwise, 'in a poke' comes to mind...

Share this post


Link to post
Share on other sites
I did wonder if that was the case.

I'd bet that the buyer knows full well the issues with the property, but is willing to take a gamble due to the low purchase price and huge rental income.

 

Here it is.

https://auctionhouselondon.co.uk/lot/?lotID=64771

 

Ok, let's look at what will happen.

The buyer will discover the notification from the council to revert the house back to its original, one up one down condition.

The second front door will have to be bricked up.

The second bathroom taken out.

The staircase possibly reconfigurated.

The lost of one tenant paying £10k per annum in rent.

It will revert back to its one up one down state in the mews, with no front or rear garden.

Worth a punt?

Maybe Jeffrey could add more to this, from the legal side of things.

Edited by poppet2

Share this post


Link to post
Share on other sites

That is a terribly small amount of information provided, basically nothing other than a bad photo and the briefest of descriptions.

 

Worth a punt?

 

It sold for £121k, the cheapest property (1 bed) on Rightmove in that area is nearly £300k.

Share this post


Link to post
Share on other sites

Sometimes properties with problems do sell, esp. if the problems are resoluble.

Typical examples are a house/flat with only a short leasehold term unexpired; or a title based on a known Deed of Gift that's fairly recent and therefore at risk of the donee's title being voided; or [if unregistered at HMLR] where some/all of the title deeds are missing.

Share this post


Link to post
Share on other sites

Poppet was right. The above property that was in auction last year, # 20, was sold but the vendor withheld an important document.

The council had issued a notice for breach of planning from B8 to two self contained studio rooms in 2015. It's use of just one room up and one room down is for storage only and had to be reverted back to its original use. But the notice was issued in 2015. The person who bought it at auction last year, probably didn't have a solicitor to check these details beforehand. However, if a solicitor had been appointed, could the solicitor have discovered this despite the document being omitted? The property is now in auction again. Also, I saw a property in auction that stated in the brochure, that the vendor didn't know if the property was occupied or not.

Edited by poppet2

Share this post


Link to post
Share on other sites

Obviously one cannot see a document that is omitted!

But the existence of such a Notice would be disclosed in response to preliminary searches.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.