What Is the Auction Legal Pack & Why Do I Need One?
- All properties sold at auction should have a legal pack of crucial information for the buyers to review, but it is not a legal requirement.
- It is all the buyer has on which to base their bid at the auction unless you order additional searches and surveys.
- The seller's conveyancing solicitor prepares the legal pack to make sure all the required information is present and correct for a smooth sale.
- The pack is released two to seven days before the auction takes place. We can usually review a freehold pack for buyers in 2 working days and a leasehold pack in 5 working days, so order now.
- Almost all auction packs contain fairly limited information, to avoid a misrepresentation claim in the future.
- The buyer's solicitor reviews the legal pack to catch any missing information, or cause for concern and prepare a risk report for the buyer before bidding.
What is the Auction Legal Pack?
The pack is a collection of essential legal documents containing crucial detailed information about a property. It is typically prepared by the seller's solicitor and made available to interested parties ahead of the auction date.
The pack serves as a vital resource for due diligence, allowing potential buyers to evaluate the property's legal title and other relevant details, before bidding on the property and committing to a purchase.
Why do I need an auction pack?
Auctions work differently from a standard purchase, where making an offer is not legally binding. Making a winning bid will bind the buyer to the contract of sale (or reservation agreement).
This means that the buyer must review the legal paperwork before bidding. (Traditional buyers would have time after their offer was accepted to review the relevant information with the help of their conveyancing solicitor, before exchanging contracts).
Making a winning bid is legally binding, like the exchange of contracts in a standard purchase, so make sure the legal pack is reasonably complete and has been reviewed by an auction conveyancing solicitor, or risk getting stuck with a property with more problems than it is worth, or losing your deposit.
What is included in the auction legal pack?
The pack includes various documents that shed light on different aspects of the property. Some of the key components you can expect to find in the pack are:
Legal Title and Ownership Details
This section includes the property's title deeds, Land Registry documents, and details about the current owner. It confirms that the seller has the legal right to sell the property. This will reveal any outstanding charges on the property, as well as restrictions or easements which will affect your rights as the new owner. For example, if the property has a public right of way through it.
Searches and Local Authority Information
The pack may contain search results that provide information on environmental considerations, potential developments, and other factors that may impact the property. If there are any additional searches you would like to consider before bidding, we can turn many of our conveyancing searches around in just two working hours.
Contract & Special Conditions of Sale
These are specific terms and conditions set by the seller, applicable to the auction sale. Buyers must review these carefully as they may differ from standard property transactions. In a legal pack review, your solicitor will spot anything out of the ordinary and explain the risks and liabilities so you know what you are signing up for.
Property Information Forms
These are standard forms, such as TA6 Property Information Form, TA10 Fittings and Contents Form and (if leasehold) TA7 Leasehold Information Form.
Property Certificates
These include the Energy Performance Certificate (EPC) and any documentation relating to planning permissions and building control sign off, or indemnity insurance.
Without a survey, you may have no indication that there were works on the property which are missing this documentation. This could cost you a fortune if the local authority forces you to remedy the work.
Leasehold Information pack (if applicable)
In the case of leasehold properties, the leasehold information pack includes details of the lease agreement, management information, ground rent, service charges, and any associated restrictions. The seller must purchase this from their freeholder at their own expense.
Tenancy information (if the property is let)
All relevant documentation, such as a copy of the Assured Shorthold Tenancy (AST) Agreement if this is applicable, or individual room tenancy agreements for Houses of Multiple Occupation (HMO), together with HMO licence if applicable.
Property Valuation and Survey Reports
Occasionally, the pack may include a surveyor's report or a property valuation, if the seller has undertaken these to assist with the sale (normally they'd be conducted by the buyer).
This will offer insights into the condition and value of the property. It is uncommon for the seller to take on this optional expense, so we recommend the buyers order their own RICS survey if at all possible.
Why is the auction legal pack important for Buyers?
The auction legal pack is important for buyers to decide on the property purchase and reduce the risk of discovering nasty surprises when it's too late to back out. With the help of a specialist solicitor, you can determine whether the property suits your needs and what it is worth before you bid.
We strongly recommend that buyers have the legal pack reviewed by an experienced auction conveyancing solicitor. They will review the title and documents and catch missing information and issues or discrepancies with the paperwork. The solicitor prepares a detailed report highlighting any risks identified, so you can make an informed decision about whether and how much to bid. Read more tips for buying at auction.
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Freehold Pre-Auction Report Review
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£299 INC VAT
2 working day turnaround* | Completed by our panel solicitor.
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Leasehold Pre-Auction Report Review
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£480 INC VAT
5 working day turnaround* | Completed by our panel solicitor.
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Why is the auction legal pack important for Sellers?
Sellers benefit from providing as much factual information as they can about the property. This demonstrates transparency and trustworthiness to potential buyers, who will be able to bid with confidence, usually improving the sale price. Choose experienced auction solicitors to prepare a comprehensive legal pack, meeting the shorter timescales of auction selling.
The process is quite different from a standard sale and presents its own set of benefits and challenges. Read our guide on Selling a Property at Auction.
Why do some sellers skimp on their auction legal pack?
Typically at auction, the seller is not the person who lived in the home. If a seller doesn't have a definite answer to the buyer's questions, the safest answer for them to give is 'I don't know'.
If the seller answers as if they know it to be true when they haven't done the legwork to determine the answer and then it turns out to be false, they could be liable for misrepresentation, which in the most extreme cases can void the whole transaction.
Now, as a buyer, this is good. It means you can't legally be misled by sellers who are trying to smooth over potential issues to get your money. However, in an auction sale, this can become problematic as the legal pack is kind of all you have to base your decision on.
The seller is not legally obligated to pay for searches, so there is no guarantee they'll appear in the pack and you won't have the security of having an offer accepted before you order a RICS survey.
If you are serious about a property, the best way you can make an informed decision when bidding (and minimise the risk of throwing your money away on a dodgy house) is to order your searches in advance and, if access is possible, get a RICS survey.
What is the risk to the buyer?
If the searches (or survey) show some problems, the money spent will be worth it, having saved you from bidding more than the property is worth (or at all). If you're pleased with the results of your searches and survey, you can bid with an advantage over the other bidders, who may not have all the information you possess.
Unfortunately, you may lose the auction, in which case you may feel the money spent is lost or wasted, but this is simply the nature of bidding at auction. It is still preferable to bid and lose with good information than to push your limit higher and later discover the property is worth less than you've paid for it.
It is not worth ordering searches and surveys if they will not come back before the auction date. We're dedicated to achieving competitive turnaround times to empower our auction clients to make the most informed decision possible. Get in touch to see if we can accommodate your deadline, on 0333 344 3234 (local call charges apply).
Caragh is an excellent writer and copy editor of books, news articles and editorials. She has written extensively for SAM for a variety of conveyancing, survey, property law and mortgage-related articles.
