Buying a property on auction with vacant possession and exchanging before tenants leave

AnaO

I won a bid on a property auction in November. The property is tenanted, the auction advert stated that the tenant was due to vacate on the 1st of December (the property is being bought with vacant possession), and the auctioneers assured me that the tenant was moving out on the 1st of December.

I asked for the completion date to be extended to the 8th of December as I was due to receive funds from the sale of my property on this date. The auctioneer sent me an email advising the the Seller's solicitor had informed them that the Seller was satisfied with this completion date. The contract that I exchanged states the completion date of the 8th of December.

When the 8th of December arrived I was informed by the Seller's solicitor that the tenants had not moved out as their credit checks had failed.
And to date they have still not moved out as I believe their credit checks keep failing.

I have asked if the contract can be rescinded and my deposit be returned, however, the Seller's solicitor is stating that the auction's special conditions override anything stated by the auctioneer, and also override the completion date on the contract. The special condition states that completion will take place 5 days after the Seller has informed me that the property has been vacated. Which obviously could mean months, years or decades!

I obviously feel that I have been deceived by all parties concerned as I was under the impression that the completion date on the contract would stand. However every time my solicitor brings this up, the Seller's solicitor states that we need to refer to the special conditions which override the contract. Do I have any legal recourse here? I am prepared to wait for another month to complete, but this could go on forever and I have nowhere to live - I am currently in temporary accommodation.

Has anyone come across this scenario before?

anselld

Does the contract you exchanged include the special condition on completion date?

What does your own solicitor say?

propertyrental

The risk of buying at auction.
And the risk of buying a property with tenants.

The Ts are under no obligation to leave unless/until the owner (be that you or the seller) obtains a court order after following the proper process.

"the auction advert stated that the tenant was due to vacate on the 1st of December". You cannot rely on an advert - only the auction Legal Pack. Did that state 'vacant possession'?

And surely when you got your solicitor to check the Legal Pack before the auction, they advised you of the risks?

The special condition states that completion will take place 5 days after the Seller has informed me that the property has been vacated. 

And your solicitor did not explain the risks associated with that condition?

AnaO

Thanks for your response. The legal pack definitely states vacant possession. Unfortunately my solicitor only got involved in the post auction phase, there was not sufficient time for them to get involved before and I was being pushed by the auctioneers to bid - stupidity on my part obviously! When the auctioneer assured me that the Seller had agreed to the completion date of the 8th of December and I saw it on the contract that was being exchanged I was pretty confident.....

user1977

Ok, but your solicitors can still now advise you what the contract you signed up to means. We haven't seen it.

propertyrental

AnaO said:

.... The legal pack definitely states vacant possession. Unfortunately my solicitor only got involved in the post auction phase,.....

I'm afraid that's the first lesson re auctions. Do all checks before you bid and don't rely on unsubstantiated claims/promises.

Properties get put into auctions usually because they have 'problems'. In this case the presence of tenant who may or may not leave (there may be other reasons too).

What exactly does the Legal Pack say (please quote)?

And what is your solicitor now belatedly telling you?

housebuyer143

Arguably though the addition of that special condition means you are not completing on a property with tenants in it which you then need to evict? 
It's not ideal because you want to move in, but it could be worse in that you bought it with the tenants in it and are now a landlord who has to spend money and time evicting them. It's in the owners interest to get them out quickly now as they will want your money.

theartfullodger

In my experience having bought at auction you are committed to buying, quite quickly.  You'll become owner & landlord.  

eddddy

AnaO said:

the Seller's solicitor is stating that the auction's special conditions override anything stated by the auctioneer, and also override the completion date on the contract. The special condition states that completion will take place 5 days after the Seller has informed me that the property has been vacated. Which obviously could mean months, years or decades!

Does your solicitor agree with that interpretation of the contract?

Or is your solicitor saying that the seller's solicitor is misinterpreting the contract?

(But arguing in court over the interpretation of an unclear contract might end up being extremely expensive and lengthy.)


You could try negotiating your way out of the contract - for example, offering to pay the seller's legal fees and auction fees, in return for cancelling the contract.

macman

On the bright side, it doesn't sound as if the tenants are seeking to remain in occupation until evicted and then seek LA rehousing, but are making genuine attempts to move, so your own possession of the property may not be massively delayed.
Once exchange has occurred, why not contact your (new) tenants and see if you can assist them to find alternative housing? 
Otherwise you simply have to serve an S21 and wait for 2 months to apply for a possession order.
You need to ask yourself why the vendor sold at auction-it can only be because they weren't prepared to gain vacant possession themselves and then start marketing the property.

eddddy

macman said:

Once exchange has occurred, why not contact your (new) tenants and see if you can assist them to find alternative housing?
Otherwise you simply have to serve an S21 and wait for 2 months to apply for a possession order.

That's not how I read the OP's post.

My reading is that the OP is saying:

• 1) Exchange has happened.

• 2) The sale is with vacant possession on completion

• 3) In one place, (the special conditions) the contract says completion will be 5 days after the tenants move out (whenever that might be) - but there is no 'longstop' date

• 4) In another place, the contract says completion will be on 8th December - which means the seller is in breach of contract, because they didn't complete (with vacant possession)

There is no suggestion anywhere that the OP would become a Landlord - so no need for the OP to serve a s21 notice.


The OP is asking for clarification on whether 3) or 4) applies. But without seeing the contract, I don't think anyone here can say.