There can be several good reasons why you may consider selling your property at auction. For example, a property may require significant refurbishment, or it may not be suitable for mainstream lending. In such a case, a sale by auction can offer a viable alternative to secure a quick sale. You should instruct a solicitor well in advance of the auction date. Wollens Solicitor Danielle Julyan looks at are four reasons why:
- To allow time to identify and resolve potential title issues.
Your solicitor will need to review the title to your property and identify potential issues that may deter prospective purchasers. This can include notices or restrictions that no longer apply to the property but remain noted on the register. An example of this is where there is a notice on the title register of a registered lease. It is sometimes the case that the lease has long expired and should therefore be removed. Assuming sufficient evidence could be provided, a solicitor would be able to apply to the Land Registry to remove the notice.
- To prepare the legal pack for prospective bidders
Your solicitor will prepare a legal pack for the property that will be available for prospective bidders to review in advance of the auction date. The legal pack may include: the sale contract and transfer, title documents, property searches, planning permissions and other relevant documents.
Your solicitor will also be the named contact on the auction pack. They will be able to deal with legal enquiries raised by prospective auction bidders prior to the auction date.
- To draft special conditions to include in the sale contract.
You will need to discuss with your solicitor whether you wish to impose any special conditions on the prospective purchaser. The special conditions would form part of the sale contract and would be binding on a buyer following a successful bid. This can include a special condition for the purchaser to reimburse the search fees and/or legal costs incurred by you. It can also include an obligation to become a director of a management company.
- To provide specialist pre-auction advice.
Depending on the type of property you are intending to sell, you may require specialist advice prior to committing to sell your property at auction.
If you are selling a tenanted property, you would be required to provide additional information. This includes providing copies of the tenancy agreements and details of rental payments. You will also need to ensure arrangements would be in place to transfer the tenancy deposit to the purchaser following completion.
Equally, if you are selling a freehold property where long leases have been granted to residential tenants, you may be subject to statutory legislation. This can mean formal notices have to be served to the tenants and strict timescales must be adhered to, prior to committing to a sale of the property. Failure to adhere to the legislation can have serious criminal and financial consequences, and so it is essential to seek legal advice.
How we can help
For these reasons, if you are considering selling your property at auction, in the first instance you should seek legal advice from a specialist property solicitor.
For further information, please contact Danielle Julyan in our residential property team on 01803 396675
Or Email: [email protected]