Tuesday August 29, 2023
Selling a property at auction is usually relatively straightforward, but to give the property the best chance of selling at auction properly, a prepared and detailed auction legal pack should be prepared.
When you sell a property at auction, you must provide a legal pack. In this article, we will discuss what a legal pack is and how long it can take to prepare one.
An auction legal pack is a set of documents that contains information that a potential buyer and their solicitor will want before bidding. The more carefully it is prepared, the more chance there is of a property selling at auction.
You can read more about these details in our dedicated guide to what is included in an auction legal pack.
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For most properties it will usually take between 1 to 3 weeks to prepare an auction legal pack.
As a seller, you will want to allow sufficient time for your solicitor to prepare the auction legal pack. There are some documents that a solicitor will prepare themselves, such as the Special Conditions, but some documents will need to be obtained from third parties. It is important that a seller leaves sufficient time for their solicitor to obtain those documents.
Most auction legal packs contain a Local Authority search. This search will either be provided by the local council or by a search provider who obtains certain information from the local council. It is common that there will be a delay in obtaining the Local Authority search so it should be requested as early as possible.
For a leasehold property, an auction legal pack should also contain information relating to the lease, such as a ground rent receipt (if appropriate) and service charge information.
Auction legal packs for an apartment should also contain a document called Replies to Leasehold Property Enquiries (also known as “LPE1”). This information will come from the landlord or management company (or both) and is sometimes slow to be provided. A seller should allow as much time as possible to obtain all the necessary documents from landlords and management companies.
If a property “sells” at auction, this means that exchange of contracts has taken place at the auction. The auction legal pack will contain Special Conditions. Those Special Conditions will set out the timescale for completion. It is common for those Special Conditions to set the timescale for completion of 4 weeks from the date of the auction.
A seller can, if they wish, change this timescale and insert a shorter or longer period. It is important that a seller, if they do wish to change the completion timescale, instructs their solicitor to insert the relevant timescale in the Special Conditions.
The Special Conditions will also make reference to a “Notice to Complete” period. If, for whatever reason, the buyer does not complete on the set completion date, it is common for there to be a “Notice to Complete” period. This period of time is 10 days but again can be a shorter or longer period as the seller requires. Again, it is important for a seller to provide their solicitor with instructions on this timescale.
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If a buyer does not complete on the set completion date, a seller’s solicitor can serve (send) a Notice to Complete. This is a formal notice which requires a buyer to complete within a set timescale. That is the Notice to Complete period.
If a buyer does not complete within the Notice to Complete period, a seller is entitled to terminate the contract, keep the deposit paid by the buyer and sell the property to someone else. In addition, the seller will often be entitled to claim “compensation” from the buyer as well as keeping their deposit. For further advice on this point, contact our solicitors at AFG Law.
No, an auction legal pack will, at the very least, need to contain Special Conditions. These Special Conditions should be prepared by a solicitor as these form the basis of the seller’s contract with the buyer to sell the property. The Special Conditions should contain all the terms and conditions that a seller wishes to impose on the buyer.
In addition, an auction legal pack should contain all the usual documents a buyer would expect to receive in an open market sale. The intention being that the buyer has the opportunity to consider all documents before attending the auction.
The more comprehensive an auction legal pack is, the more attractive a property will be to potential buyers and the less risk there will be that it will not sell at auction.
Our experienced conveyancing solicitors at AFG Law will be able to advise you on what you should include in the auction pack and prepare it for you.
We will ensure all deadlines are met and will work closely with you to ensure all documents, information and forms included are accurate. Get in touch with our experienced team of solicitors to see how we can help you.