8 Key Components of a Legal Pack for Auction

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Auctions are becoming an increasingly popular method of buying and selling residential property. Whether it is a traditional style auction or a modern style auction, the unique nature of the process means that specialist legal guidance is strongly recommended to ensure that everything runs as smoothly as possible.

The content in this article is designed for a traditional style of auction.

One of the main elements you will come across in this setting, either as a buyer or seller, is a legal pack for auction. This is an important resource for both parties, as it contains documentation relating to the property that’s up for sale.
Failing to properly consult and understand a property auction legal pack can lead to buyers experiencing a significant financial loss if something goes wrong, so a thorough review is essential. With this in mind, we’ll outline the eight key components to look out for in a legal pack and what each one should contain. Read on to find out more. 

What is a Property Auction Legal Pack?

A property auction legal pack is a set of documents that is designed to provide a buyer with key information needed about a property, so they can make an informed decision about whether to make a bid or not. They are obtainable either via the auction house or from the seller’s solicitor. 

It is vitally important to understand that once the buyer has made the winning bid and ‘the gavel has knocked down’ they will be contractually bound to buy the property, and purchase will need to be completed promptly (usually within a period of 28 days from the auction sale date). Given this fact, having as much information as possible before the auction begins can be highly productive, if not essential. As a result, sellers should ensure to provide a comprehensive legal pack that covers all bases. A specialist law firm can help with this. 

Is a Thorough Property Auction Pack a Legal Requirement?

Although it’s not a legal requirement for a vendor to compile a comprehensive property auction pack, it is in their best interests to do so. Buyers will naturally be wary about bidding on a lot for which there is little information, thereby reducing the potential pool of purchasers. 

It’s understandable for sellers not to want to dwell too much on any negative aspects about the property, however it’s important to be as open and honest as possible in this process. The recent case of SPS Groundworks and Building Ltd v Mahil [2022] reinforces the obligation of disclosure on the Seller and whilst Buyers will be much more likely to accept potentially-fixable flaws included over an auction pack that skimps on detail — as this gives the impression that there’s something to hide. 

Can a Property be Sold Without a Legal Pack?

In theory, it is possible for a property to be sold without a legal pack, however it is extremely unlikely to happen in practice. Listings will always include a set of “Special Conditions”, which are drafted by the seller’s  solicitor. This means that at the very least, a legal pack should include this vital information. 

While properties at auction are technically sold ‘as seen’, in reality, transactions are unlikely to complete without being supported by a comprehensive property auction pack. 

What Should be Included in a Legal Pack for Auction?

The more comprehensive you can make your legal pack, the better chance you have of securing a buyer. Your property auction legal pack should contain:

  1. Evidence of Ownership

In most cases (where the property is registered with the Land Registry) the Seller’s proof of ownership is contained in the title Register (also known as the “title deed”). This is obtained from the Land Registry and contains information on the current registered owner, how much was originally paid for the property, and whether there are any charges held against it — such as a mortgage or secured loan. The title Register may also contain information about covenants which affect the Property or any rights or easements which affect the Property.  There may also be title restrictions which protect third party interests.  

If the property is not registered with the Land Registry, the Seller’s proof of ownership will usually be described in an ‘Epitome of Title’.  An Epitome of Title is a collection of deeds and documents going back a minimum of 15 years to show how the seller is entitled to sell the property at auction.

  1. Search Information

Providing details relating to the property being offered for sale is a key element of a legal pack for auction. Searches are usually carried out by the seller’s solicitor ahead of the auction, however they can be subject to delays. As a result, buyers may decide to take out “no search” indemnity insurance policies to mitigate any risks associated with the searches not being completed on time. 

The main types of searches can include:

  • Local authority
  • Flood risk
  • Water & Drainage
  • Environmental
  • Mining
  • Commons registration
  • Land charges and Index Map (in the case of unregistered properties)

It’s important to note that the above is not an exhaustive list. If you’re ever unsure about exactly what searches are appropriate for a property, it’s a good idea to seek experienced legal advice at your earliest opportunity. 

  1. Title Plan

If the Property is registered with Land Registry the title plan is also sourced from the Land Registry. A property’s title plan is a graphical representation of the boundaries that surround the land. It is designed to supplement the title register by providing a clear illustration to work from. 

If the property is not registered with Land Registry, the property deeds may contain a plan which may or may not be Land Registry compliant.  Again any question over the suitability of the Property plan should  be something a specialist law firm can offer advice upon.

  1. Energy Performance Certificate (EPC)

An up-to-date energy performance certificate is a legal requirement when selling a property. This provides a snapshot of the building’s energy efficiency by grading it on a scale of A (most efficient) to G (least efficient). 

  1. Terms & Conditions of Sale

Typically, all auction houses will follow the same terms and conditions of sale, as a way of setting a common practice throughout the industry. These rules cover three broad elements, which are; how the auctions are conducted, a glossary of common terms, and sale conditions — which govern the agreement between the vendor and buyer of each property. 

  1. Special Conditions of Sale

The special conditions of sale documents contain details of any variation in contract terms. These are specific to each property that goes under the hammer, so it’s important for potential buyers to scrutinise them carefully before deciding whether to make a bid. 

Examples of special conditions include:

  • Any title issues that can only be addressed after completion
  • Details of any additional costs, such as commissions to property dealers or asset management companies or seller’s legal costs;
  • Details of the search fees for which the Seller expects to be reimbursed by the successful buyer
  • Land Registry restrictions that may be in place
  • Financial conditions that could affect the buyer in post-completion, for example if the property is going through probate

Much like the generic terms, buyers should pay close attention to any special conditions so they have a clear understanding of what they’re letting themselves in for. 

  1. Property Information Form (TA6)

This contains a raft of information relating to disputes, claims, proposals, notices, warranties, and environmental matters. Available from the Law Society, the TA6 form is designed to provide detailed and up-front intelligence that may be required during the conveyancing process. 

  1. Fixtures & Fittings Form (TA10)

Another form from the Law Society, this document outlines exactly what physical items will be included as part of the sale. These range from appliances and light fittings, to curtain rails and carpets. 

In cases where a seller does not have all relevant information to hand, the fixture and fittings form may just contain the phrase “sold as seen”. This is common in scenarios where the property forms part of an inheritance or is currently tenanted. 

Leasehold & Rented Properties

As well as the eight main components listed above, leasehold and rental properties can also have several other documents included in an auction legal pack. These include:  

  • Leasehold Information Form (TA7): Outlines what’s covered in the lease documentation. 
  • Leasehold Property Enquiries (LPE1): Contains information relating to maintenance agreements, deeds of covenant, fire safety certificates, and disputes, amongst other things. 
  • Buyers Leasehold Information Summary (LPE2): A one-page summary of what’s contained within the LPE1 documentation. 
  • Leasehold Management Pack: Provided alongside forms LPE1 and LPE2, the management pack offers more detailed information regarding items such as service charge estimates, and insurance policies.
  • Tenancy Information: Relevant if the property is sold with tenants in situ, this outlines information about the occupants, evidence of voids/arrears, proof of ‘right to rent’, and more. 

Why Specialist Support is Crucial

As you can see, there’s a lot that goes into putting together a comprehensive legal pack for auction. With so much to consider, and a large amount at risk for both buyers and sellers, obtaining the right advice is essential. 
By working with a specialist property auction solicitor, sellers can be confident that they have included all relevant information within the legal pack — thereby boosting their chances of a successful transaction. Buyers, meanwhile, will be able to benefit from having an experienced eye look over the documents and pinpoint any potential areas of concern.

No matter if you’re looking to buy or sell at auction, Thursfields’ residential property department has all the expertise you need to achieve a smooth outcome. Such is our expertise, our involvement has often been crucial in securing a positive result for our clients.

As a law firm that builds its service around your exact requirements, we take the time to understand your unique circumstances and goals, before recommending what we believe is the best solution for you. If you’re a vendor, we will assist you with gathering all the information required to put together a comprehensive legal pack for auction. Should you want to buy a property, we will thoroughly review a pack and enable you to make an informed decision about whether to proceed with a transaction. 
For more information about how Thursfields can help, contact our team today.

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