Auction Legal Pack

Selling a property at auction? Preparation of the auction legal pack is key to ensuring a successful auction sale.

Auction Legal Pack

Selling a property at auction? Preparation of the auction legal pack is key to ensuring a successful auction sale.

Call us on 020 7183 2623 for help selling your property at auction

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Auction legal pack when selling a property

Selling a property at auction is very straightforward, but there is some preparation required to ensure you achieve the best sale price. The auction company will take care of preparing the marketing and organising viewings, but there’s one thing that’s considered outside of their remit, and that’s the auction legal pack.

This article explains what an auction legal pack is, who’s responsible for preparing it as well as providing estimates for the costs and timescales involved. This article is designed for property sellers but if you’re considering buying at auction you might find it useful too.
Last updated by Mark Grantham on 10th March 2017

What is an auction legal pack?

When selling a property with an estate agent (private treaty sale) it’s the responsibility of the buyer to make their own legal enquiries, to pay for searches and other legal documents relating to the property. But when selling at auction it doesn’t make sense for the buyer(s) to do that work; there may be 20 or more prospective buyers interested in the property, so for each buyer to be applying for the same document would be a waste of time and money.

Instead, when selling at auction your solicitor will be instructed by the auctioneer to prepare an auction legal pack which will be available to the public (on the auctioneers’ website and in paper form) before the auction.

The timely creation of the auction legal pack can make the difference between your property selling on auction day or remaining as unsold stock – failure to provide a comprehensive auction pack may deter any prospective buyers from making a bid due to the uncertain nature of what may affect the property.

If you put yourself in the shoes of a prospective buyer, you’ll want to know as much about the property before you have the confidence to make your best offer. It’s not the known “fixable” problems that will stop prospective buyers bidding, people are scared of the unknown and will fear the worst if they think something’s being hidden.

Thinking of selling?

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Who prepares the auction legal pack?

The auction legal pack is usually prepared by the seller’s solicitor. But there’s nothing to stop the seller preparing the legal pack themselves if they want to. We’ve been selling our own properties at auction for a long time, and still ask our solicitor to prepare the legal pack for us – just to keep things simple and have all legal matters in one place. Even if you’re familiar with the auction sale process we would recommend that you ask your solicitor to take care of compiling the legal pack.

If your solicitor’s preparing the legal pack it’s still worthwhile being familiar with what’s involved, because you (as the seller) will be responsible for completing some of the forms that are included in the legal pack and responding to your solicitor’s enquiries. It’s also useful to know what sort of costs you should be expected to pay.

What’s included in the auction legal pack?

The contents of the auction legal pack will depend on the type of property you’re selling. But for any property the starting point is to show evidence of ownership, and that takes the form of documentation from the Land Registry, which will typically include the title document and title plan. It might also include the deeds for the property. Your solicitor will download these documents from the Land Registry website for a nominal fee.

The only form filling required by the seller will be for the property information questionnaire and fixtures and fittings form. These forms will be sent to you by your solicitor and they shouldn’t take much longer than 20 to 30 minutes to complete. You can see an example of the completed forms in the sample legal pack below. It can sometimes be the case that vendors are unable to complete these forms because they don’t know anything about the property! For example, in the case of an inherited property the executors might not know about things like who supplies the electricity, gas or water to the property, or exactly where the property boundaries are. So rather than completing these forms it’s quite okay to state that the property is “sold as seen” and it can be helpful to explain why the forms are missing, in the case of an inherited/probate sale this can be done by including the grant of probate in the legal pack.

Standard Legal Pack Contents for a Freehold House

  1. Title Document
  2. Title Plan
  3. Property Information Questionnaire
  4. Local Authority Search
  5. Water & Drainage Search
  6. Environment Search
  7. Energy Performance Certificate (EPC)
  8. Standard Auction Conditions
  9. Special Conditions

Prospective buyers will also be interested to see what’s happening locally in terms of new building and transport developments etc. This information is available from the local authority search which your solicitor will either obtain directly from the local council or through a search provider such as Searchflow or Landmark. This document is often considered essential to a legal pack, especially for rural properties where the prospect of a new housing development or airport would seriously affect the value of the property. If the local authority search is not in the legal pack prospective buyers might assume the vendor has something to hide.

There are several other searches that can be included in the legal pack. Another that’s commonly included is the drainage and water search. One of the reasons the search is considered to be so important is because it shows the flood risk to the property, which again is particularly important for provincial or rural properties, more so than London.

Another essential part of the auction legal pack is the Energy Performance Certificate (EPC). It’s a legal requirement to have an EPC whenever a property is advertised for sale or rent. For an averaged sized house or flat an EPC doesn’t cost much more than about £50 and can be obtained very quickly, usually within several days. EPC’s are valid for 10 years, so it may well be that you have a valid EPC for your property already – if you bought or have tried to sell the property within the last 10 years. You can check for yourself by visiting the EPC Register website at www.epcregister.com

All property auctions are governed by a standard set of conditions, known as the general conditions of sale, or the standard auction contract. These conditions are available from the auctioneers website and published in the auction catalogue too. The conditions state the auctioneers role and the conduct of the auction, and they also layout the terms of the transactions, for example the deposit will be 10% of the purchase price and that completion will be 28 days after auction day. In addition to the standard conditions your solicitor will need to include a document known as the special conditions.

The special conditions state the lot number, the address of the property and the seller’s solicitors contact details. The special conditions also state variations to the common conditions, for example if you wanted to change the completion date from 28 days to 36 days, then a clause in the special conditions will allow for that. It’s also become quite common for regular auction sellers (e.g. property dealers and asset management companies) to recover some of their auction and legal costs by adding a clause to state that the buyer is will pay an additional 1% towards the sellers fees.

There are other documents that need to be included in the auction legal pack, depending on the type of property you are selling.

For tenanted properties, prospective buyers will want to see a copy of the tenancy agreement and as many associated landlord & tenant documents as possible e.g. gas safety certificate, deposit statement etc. If you are unable to include a tenancy agreement in the legal pack, either because you can’t find it or you didn’t have one in the first place, you will still be able to sell at auction, but the absence of a tenancy agreement will usually result in fewer prospective buyers and a lower sale price because of the risk that the tenant might be a regulated tenant. In the absence of a tenancy agreement it can be useful to include rent/bank statements or a copy of a rent book to show that rental income is being received.

If you’re selling a leasehold property you will need to include a management information pack. Whether you sell your property through an estate agent, at auction or direct, it’s the sellers responsibility to apply for the management information pack. These are obtained from the management company who work on behalf of the freeholder. The management information pack includes financial statements to show if service charges are all up-to-date, insurance policy documents, fire safety certificates and other compliance documents to show the property is being properly managed.

The management pack can take a few weeks to arrive, so it’s important to request as soon as possible. Most solicitors will ask the seller to request these directly from the management company themselves. Contact details for the management company can usually be found on your service charge or ground rent statement. The cost of the management pack is usually in the region of £200.

In the event of any problems or delay in obtaining the management information pack, a useful resource is the Lease Advisory Service.

For properties with a shorter lease (typically 80 years or less) then it can be a good idea to serve a Section 42 notice to the freeholder. Serving notice to extend the lease gives the next buyer the option to extend the lease soon after purchase. If notice isn’t served by the current owner then the new owner will have to wait 2 years before they can extend the lease, by which time the property value may have increased and the number of years remaining on the lease will have decreased – both factors will result in an increased cost for the lease extension. As a seller, you will only be able to serve notice if you have owned the property for 2 years or in certain cases for probate properties.

Properties with potential, including those with planning permission sell particularly well at auction. If you have current or even lapsed planning permission, then it’s important to include all related documentation in the legal pack.

In terms of what should not be included in the legal pack, as the name suggests the pack is for legal documents and nothing else. There is no need to include surveys or marketing materials in the auction legal pack.

Cost of the auction legal pack

Legal packs can cost anything from £100 to £500 depending on the type of property being sold and the number of documents you include.

Thinking of selling?

Try our free auction sale price calculator

How long does it take to prepare an auction legal pack?

For a freehold property, an auction legal pack can be prepared in anything from 1 week to 3 weeks. The local authority search is usually the delaying factor, taking between 1 week to 3 weeks, but some councils take longer, for example Woolwich council take 6 weeks to provide a local authority search document!

For leasehold properties, the delaying factor is usually the management information pack (obtained from the managing agents or the freeholder) which often takes longer than it should, just because many freeholders aren’t used to preparing. It’s worth chasing your freeholder (or their managing agent) to make sure they’re dealing with your request.

Find out more about auction reserve prices and why they’re so important!

What if the auction legal pack is not ready in time for the auction?

Most auctioneers will allow a property to be entered in to auction with the bare minimum in the legal pack; that will typically be the office copies (Land Registry documents) and the special conditions of sale. But other auctioneers will include in their terms the right to withdraw a property from auction if a complete legal pack is not ready 3 days before auction day.

If there are one or two searches missing from the legal pack then it’s usually okay to let the property go to auction, but if any of the key documents are missing e.g. the title documents or lease then it’s better to withdraw from auction and enter in to a subsequent auction once the legal pack is ready.

How long is the auction legal pack valid for?

When selling at auction it’s usual to instruct the auctioneer and your solicitor at the same time, typically about one month before the auction date. A good solicitor will begin compiling the legal pack as soon as they receive your instruction so that it’s ready for prospective buyers no later than one week before auction day.

A legal pack is valid for 6 months from the date the documents are produced. So if for whatever reason you need to withdraw the property from auction and enter into a later auction a month or so later, the auction pack will still be valid.

Example of an auction legal pack

For a free sample auction legal pack please contact us.

Need more help? Call us on 020 7183 2623 or send us an enquiry online.

Next steps – request an auction sale estimate

If you’re considering selling your property at auction and need help preparing the auction legal pack, please contact us on 020 7183 2623.

Thinking of selling?

Try our free auction sale price calculator

Auction Legal Pack

This page is designed to help property owners who are selling at auction. However, if you’re interested in buying at auction and need help interpreting a legal pack or have other questions about auction, please feel free to contact us.

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