Advice? Auction Property - Seller Failed to Complete

myuserid

I am supposed to be buying a property via auction. The completion date has now passed because on the day the seller's solicitor told my solicitor that they haven't obtained the redemption figure for the charge on the property. Those are the only details I've been provided.

I'm concerned as there was no forewarning of any potential delay and they have been trying to sell this property for a long time so I'm surprised this wasn't sorted earlier. 

I thought my solicitor would issue a Notice to Complete but instead they told me that would result in extra charges for me that I wouldn't be able to get back from the seller. And that they're likely going to charge me extra anyway. They also told me that the auction contract has conditions to only protect the seller not the buyer.*

I know some lots stipulate rather galling conditions to make it easy for the seller to pull out, but this particular lot didn't - it only had the usual details about interest if I ("the buyer") failed to complete on time.

Anyone have any advice on this situation? or can even recommend a solicitor for dealing with this type of issue, especially if it's necessary to take the seller to court (transaction based in London).

*In case anyone is wondering, no I did not go for the cheapest solicitor and this firm did seem like the best option available to me. Unfortunately I do not know anyone that could have offered a recommendation.

user1977

Difficult (if not impossible) for us to advise without seeing the contract, but I would expect as a minimum it requires the seller to convey their title and discharge their mortgage on the completion date?

myuserid

That was my understanding and certainly they are in breach of contact. The auctioneers are Barnard Marcus and the Special Conditions barely varied from the General Conditions (www.barnardmarcusauctions.co.uk/media/148550/4online-general-conditions-of-sale.pdf).

loubel

If you want your solicitor to serve notice to complete then ask them to. They have made you aware that there will be additional fees for this but it's your decision.

It is normal for an auction contract to favour the seller (and even a standard contract gives more protection to a seller than buyer in the event of a missed completion date). Did you instruct your solicitor to advise you on the terms before the auction and they failed to do so?

myuserid

I don't see how it can be the case that I should pay extra for an issue completely caused by the seller's side just because it's an auction transaction. There is surely a difference between more protection and no protection.

loubel

I haven't read your contract so can't really comment on the terms you agreed to, but even if it weren't an auction purchase you would have to pay your solicitors for additional work. From what you've said it's just a short delay so probably not worth serving notice, hence your solicitors advice not to do so. Maybe discuss with them how long they recommend waiting.

ss2020jd

As others have said it’s difficult to advise without seeing the contract and I realise buying an auction property is different from a standard sale. 
 

I can only give the experience as a seller. In case it’s helpful though, our completion date was missed due to our buyers buyer not getting the finances in time. Their solicitor said it would be a few days delayed. While we were deciding whether to serve a notice to complete (which our solicitor recommended) our buyer’s solicitor told us they were going to serve notice to complete to their buyer and we had to do so first to our buyers in order that they could.

In our case the solicitor’s costs and compensation as per the terms of the contract were payable by the party that failed to complete as they had breached the terms of the contract. So whatever extra should, in theory, not come out of your pocket. 

We did end up completing a few days later and received a little bit of compensation. The extra solicitor’s costs were paid by the other party on top of the compensation. 

myuserid

Thanks everyone that has replied so far. I will update as/if things progress, but obviously that won't be over the weekend.

myuserid

Well, there's been no movement regarding completion.

I spoke to the Barnard Marcus (BM) negotiator and they were as incredulous as I am at the assertion that I should bear the costs for failure to complete by the other party. They even recommended that my solicitor call them directly.

After some more back and forth with my solicitor, who continued to maintain that I must pay the extra costs instead of the seller, it became apparent that my solicitor was referencing a document from a different auctioneer (which I would still dispute my solicitor's interpretation of). I was rather confused as I did not recognise the name of this document at all.

Going back through the paperwork I had, I confirmed that the document my solicitor was relying on was never mentioned and also that, although I had read it prior to the auction, I was missing a copy of a different document detailing some of the conditions of this purchase. As silly as it is, I had forgotten that I had been waiting for BM to make a copy of that document available prior to the auction for me to keep but BM hadn't done so (I will excuse myself on this point as I am currently juggling a lot of difficult personal matters including the sudden death of a close relative, so my attention is rather divided).

I tried again to obtain a copy from BM but they just sent me their variations on that document (which is a bit like telling someone to change certain steps in a recipe without actually providing them the recipe). Thankfully I was able to chase down a copy that I could keep from elsewhere.

Lo and behold upon re-reading the missing document (which I realise I should have rechecked in the first instance) it states that if either party is late to complete, the party responsible for the greater delay owes compensation to the other party. Note that none of the documents for this transaction vary, contradict or negate this particular clause.

I informed my solicitor of the name of the correct document and drew their attention to the section on Late Completion. Yet they are continuing to assert that the seller does not have to oblige regarding any compensation and have tried to convince me of this by referencing a clause on my option to rescind the contract (which I have no intention of doing). As it happens, that clause is immediately followed by a clause that I retain my other rights and remedies, anyway.

I just do not understand the conclusion my solicitor is drawing, which is not helped by the fact that they made no mention of the section I specifically pointed them to. Unfortunately, that omission doesn't come as much of a surprise as they have previously ignored some of my direct queries, even repeatedly so. I really think people in the majority of other professions would quickly find themselves out of a job if they treated their clients the way many solicitors are happy to do.

ss2020jd

Your solicitor’s reluctance to serve a notice to complete seems very strange.
Perhaps they have never done that before or they don’t want any extra work.

Does the sales contract specify the compensation? Usually they say something like x% interest for every day completion has not taken place.

I found a version of the RICS Common Auction conditions. It clearly mentions notice to complete and the fact that it has to be done within 10 working days.

Your solicitor is acting for you and you can instruct him to do so.


Although an old article, this explains it quite well (you should be able to view first article for free):

https://www.ft.com/content/631417e0-518f-11e5-8642-453585f2cfcd

saajan_12

To double check, which of the below is your solicitor saying?
1. As between you (buyer) and seller, buyer is responsible for the costs to enforce the contract due to the seller's delay; or
2. As between you (buyer) and your solicitor, you are responsible for their additional costs to serve the notice and they won't start the work until that's paid. You may then be able to claim that from the seller, but that's separate.