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Why do auction properties need a legal pack?

When you buy or sell a property by auction, the legal pack is key. But why is it so important? Find out everything you need to know in this guest blog from Tony Hill, of Assured Sale And Progression (ASAP), which provides legal packs for many of our sellers.

Alongside every property being sold by SDL Property Auctions you’ll see an invitation to download a legal pack. This is not a term which crops up when buying a house on the open market, through an estate agent, so if you are new to auctions, you may be wondering what this is.

The legal pack contains vital information for any prospective purchasers. Before bidding on a property, it’s really important to read through the legal pack carefully – and to have it checked by a solicitor or conveyancer who has experience of auction sales, too.

What is included in an auction legal pack?

Provided by the seller, the legal pack is a compilation of important documents relating to the property being sold and will include some or all of the following:

  • The reservation agreement or contract
  • Auction terms and conditions
  • Any special conditions of sale
  • A copy of the Energy Performance Certificate (EPC)
  • Official copies of the title register and title plan, plus any supplementary documents referred to in the registers of title
  • Search information, including local authority searches, drainage and water search and any other searches application to the location
  • The property information form (TA6)
  • The fittings and contents form (TA10), unless the property is  sold as seen
  • If the property is leasehold, an official copy of the lease and the leasehold information form
  • For commercial properties, relevant Commercial Property Standard Enquiries (CPSE) forms
  • For tenanted properties, a copy of the Assured Shorthold Tenancy (AST) Agreement
  • Where applicable, documentation relation to planning permissions and building controls.

Who prepares the legal pack?

The seller is responsible for providing a legal pack and will pay their solicitor to compile this. Unfortunately, solicitors cannot do everything so will work closely with the sellers to ensure all the information going into the legal pack is accurate. With the help of the solicitor, the seller will complete the property information (TA6) and fittings and contents forms (TA10). If the property is let to a tenant, the seller will also need to provide the current tenancy agreement. 

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

On average it takes about two or three weeks to produce a comprehensive legal pack, although this does depend on the speed of the local authority search and this varies from council to council. 

How much does an auction legal pack cost?

This will vary according to the type of property being sold. At ASAP, our prices start at £350 including VAT for a standard residential property, but this could be more for commercial units.

Are legal packs only produced for auction properties? If so, why? 

Yes, a full and comprehensive legal pack is only required for auction properties, not those sold by private treaty. The reason for this is because of the nature of auctions; when the auction ends the buyer is bound either by a reservation agreement or a legal contract to complete the transaction so the buyer needs to have all relevant information about the property before they commit. 

What are the benefits of legal packs?

The legal pack ensures potential buyers have enough information about the property they are purchasing before they make the financial commitment of placing a bid or making an offer. It allows all involved to proceed with confidence and speed, due to the specific timelines agreed in the legal pack.

Why aren’t legal packs produced for private treaty sales?

My view is that they should be. However, they would be difficult to implement into a private treaty sale as this type of sale doesn’t offer the same level of certainty as an auction. In a private treaty sale, the seller or buyer can walk away at any time, without any financial penalty. Due to this, many clients don’t want to pay for information up front, for fear of losing their money. With private treaty transactions taking an average of up to 20 weeks at the moment, I can understand their concerns.

Is the legal pack process before auction different to the conveyancing post-auction?

Yes. The compilation of an auction legal pack is similar to the compilation of the contract papers in a private treaty sale. The difference is that it is much more comprehensive.

The auction legal pack is about providing a prospective buyer with the required information for them to be able to enter into a legally binding agreement with the seller.

Post-auction conveyancing is the process of agreeing a completion date and actually transferring the property from the seller to the buyer, in line with the auction conditions.

What’s the most important thing to know about creating a legal pack?

The biggest tip I can give to anyone when creating a legal pack is to choose the right company to compile the pack and ensure you work closely with them. They are there to guide you through the process and make you aware of your options and obligations. Auctions have changed over recent years and not all conveyancing specialists are familiar with the different types of auctions now available when selling your property.

To find out more about selling a property by auction, please click here or call our friendly team on 0800 304 7879.