Several years ago, when we were all considerably younger, I spent many hours of my time “mediating” disputes between my children arising as a result of card-based “duels” between characters from a Japanese cartoon series.
The rules of the game were, apparently, constantly changing and so complex that it was impossible to decipher who was the “winner” and who the “loser.”
My children were, additionally, disappointed to note that the characters did not, in reality, “transform” into various stages of monster. In fact there seemed to be very little real point to the game at all.
I note that this same cast of characters has recently re-emerged, now described as an “augmented reality” app, under the name “Pokemon Go.” It would appear however that the fundamental shortfalls of the original card-based activity remain unaddressed…
Which brings me to the purpose of this month’s report:
For many years purchasing residential properties in South-East England at auction and then re-selling at a profit has been seen as a way to make significant amounts of money. This has always, however, been a high risk pursuit and the prudent buyer would have a thorough look through the “sales pack” (a bundle of documents containing legal information, search results and other items relating to the property) or, better still, have a qualified person look through the sales pack, before making a bid.
The popularity of television programs such as “Homes Under the Hammer” and “Grand Designs” has increased the numbers of people taking part in this activity. Furthermore the availability of sales packs on-line has led many to take the view that a quick look through the electronic documents is sufficient to protect them from the risks involved (a sort of augmented reality “House Auctions Go”).
This is, however, not the case.
An accepted bid at auction is a binding contract for the purchase of that property at the agreed price. The on-line documents in the sales pack are just as significant as those which would be exchanged between conveyancers during a non-auction sale, whether or not the Buyer has actually read them (or had someone else read them).
The Courts have repeatedly shown themselves to be extremely reluctant to allow the Buyer to escape from a contract – however “bad” the bargain made may turn out to have been.
Review and analysis of auction sales packs is a specialist activity in which the Company and Commercial Team here at Barrett and Co in Reading have considerable expertise. If you are thinking of making a bid for a property at auction (whether residential or commercial) we would be happy – once you have identified the property and we have seen the size of the sales pack – to give a quote for our fees for doing this.
Whilst we cannot guarantee that your purchase will turn out to be profitable, involving us will both significantly reduce risk and save you a substantial amount of time – which you are, of course, free to use as you wish. Whether or not that be playing “Pokemon Go.”
I have written a book on Ten Common Mistakes Businesses Make with the Law. To download a free copy of the book go to Martin Reynolds’ Book on Business Law. If you would prefer to meet face to face to discuss your business needs call 0118 958 9711 to fix an appointment.
Consulting a solicitor when buying property at auction will both significantly reduce risk and save you a substantial amount of time. You can book a fixed-fee one-hour consultation with Martin Reynolds at our offices in Reading for just £95.