I don't want this flat anymore.

AnotherLoser

I've agreed to buy a leasehold flat on an online auction, exchanged, paid deposit and fee and now I've changed my mind. Can I do that? OK the deposit and fee are gone but can I can I cut my losses and run or not? 

Slithery

What do the terms of the auction say? I can't read them from here...

Probably, yes.

davidmcn

Slithery said:

What do the terms of the auction say? I can't read them from here...

Probably, yes.

Or possibly, no, you might be liable for the vendors costs in remarketing the property and any difference in the price achieved on a resale, if those exceed the deposit already paid. Which could be considerable.

eddddy

Many online auctions are conditional auctions, which allow you to back out before exchanging contracts (but you lose the fees).

But if you really have exchanged unconditional contracts, there's a risk that you might lose a lot of money if you back out.

The property would probably be auctioned again. Given the current economic uncertainty, it might sell for a lot less. You would then have to pay the difference (as well as the cost of re-auctioning the property).

jimmyjammy001

Usually you just forfeit your deposit and fees and then can walk away, how come you have changed your mind? 

[Deleted User]

Or you could finish buying it, then sell it again.   You will lose some money but probably not as much as if you walk away after exchanging contracts but discuss it with the auctioneers first to get an idea of the costs of walking away.

Mutton_Geoff

Or was this a "modern method of auction" deal?

AnotherLoser

I was slightly exaggerating for the sake of brevity, I just want to explore the option of running away.

Basically I guess we just don't know enough about leases. There have been some things that weren't in the legal pack have come up in the "report on title" that the conveyancer sent over that have left us thinking about what we're getting into, but might be perfectly normal...?

It says we have to paint the outside of the flat every 5 years in a colour of the freeholder's choice and the inside every 3, and that we can't rent it out without permission in writing and not for more than 3 years even then, or sell it without without permission in writing.

So it just seems weird to pay for someone to have so much control over what we do, for all I know everyone has a similar agreement but it doesn't seem there's anything to stop this person/company we have had no contact with saying "No you can't rent it out, no you can't sell it, and paint it purple this time!"

greatcrested

Those conditions are pretty standard for many leases.

I'd love to know what percentage of leaseholders paint internally/externally according the the frequency specified in the lease! And the colour thing is more to prevent you painting it purple!

As for selling, I don't believe the freeholder can withold consent, though happy o be corrected by one of the solicitors here.....

AnotherLoser

The conveyancer says:

 As you have already exchanged contracts in respect of the property, you are now committed to the purchase. As such, the seller could seek the following remedies from the courts:

a.       Damages; and

b.       Specific performance.

Which doesn't sound fun.

SallyDucati

Yes those clauses are fairly standard.  FWIW when I owned a flat I didn't stick to the internal redecoration schedule. 
When I sold I did need the freeholders 'permission', but that is just a formality.  Renting it out is different though - is that something you want to do or are you buying to live in?