Online Auction problems... Who is at fault??

jacko74

Hi guys

I'll try and keep this consice...

I had a leasehold property for sale on the convententional open market, 2 prospective sales collapsed, both due to the management company failing to provide leasehold info to the buyer in anything like a reasonable time period, 5 months in one case!

I then opted to sell it via the online action method.. where I pay no fees, the auction house gets their commission from a non refundable deposit from the winning bidder.

It was a 30 day auction, then 28 days to exchange and 28 days to complete.

My solicitor provided the legal pack, which the auction house accepted and the property was duly 'sold' in the auction.

One week after the end of the auction my solicitor then receives an extensive list of leasehold enquiries from the winning bidder, which need to be answered by the management co. Straight away I knew there would be absoloutely no chance that these questions would be answered in time for the 28 day exchange deadline, and I've been proved right!

The auction house seem to be 100% behind the buyer in this matter, telling me how important these questions are and how the buyer is perfectly entitled to request them and that they're entitled to have their 'non-refundable' deposit back if they don't get this info and this all my/my solicitors fault.

However, my take on it is that this was an AUCTION SALE, the buyers read the legal pack, if they were not happy with what it did/didn't contain then they should have not bid at all, or alternatively, at least attempted to obtain this info while the auction was still active rather than leave till 1 week afterwards.

Also why did the auction house accept this legal pack in the first place if this info was such a glaring ommission?

The way I see it the buyers are trying to have the best of both worlds... picking up a property for well below market value (less than 50%) at auction, but then still expecting to carry out all the thorough and time consuming checks and information gathering that comes with a conventional sale.

Opinions please on who's right who's wrong?

anselld

If the terms are 28 days to exchange then there must be an expectation of some enquiries leading up to exchange.
If you were looking for full commitment at the end of auction then you should have chosen a conventional auction where exchange effectively happens at the hammer fall.

david29dpo

Agreed. Did you check this? At a "normal" auction the buyer exchanges the moment the hammer falls and pays 10%
To late if the buyer failed to read the legal pack properly.
Failure to exchange, the seller keeps the 10%

Annisele

It depends on the terms and conditions you agreed to, but some auction websites aren't really auctions.

For example, this one describes having "exclusivity auctions". The winning bidder gets a 28 day period in which the seller has agreed not to exchange with anyone else - which isn't at all the same as buying a house in a conventional auction. The T&Cs of that site say a seller has to pay a fee if they unreasonably delay providing information to the buyer thus causing the sale not to go ahead.

I suspect you've also signed up to something that says you have to pay a fee if the sale doesn't go ahead - but check what the actual T&Cs say. If they do say you have to pay a fee, that isn't necessarily binding - but you might want to take everything you've signed off to a solicitor to see.