The auction legal pack: what to read and what to fear
The pack is where the property explains itself. Most bidders read the title and stop.
An auction legal pack is the contract, the title, the searches and the special conditions, and it is usually available two to three weeks before the auction. Everything you cannot see on a viewing, and everything that will bind you after the hammer falls, is in there.
Reading it properly takes a couple of hours. Not reading it is how buyers acquire properties they cannot develop, cannot mortgage, or cannot sell.
What the pack contains
The contents vary by auction house, but the core documents are consistent and each answers a specific question.
- The title register: what is owned, what is not, and what restrictions apply
- The title plan: the boundaries, and any rights of way or shared access
- The special conditions of sale: obligations imposed on the buyer beyond the standard contract
- The local authority search: planning, highways, and any enforcement notices
- Drainage and water enquiries, and an environmental search
- The Energy Performance Certificate, which must be provided before marketing
- Any lease, tenancy agreement, or management pack for a leasehold lot
The items that change the value
These are the findings that should stop you and make you recalculate rather than proceed on the original figure.
- Restrictive covenants that limit the property's use, development or subletting
- A lease with under 80 years unexpired, or a ground rent with a doubling clause
- A title that is possessory, qualified or unregistered, which limits mortgageability
- Rights of way across the property, or an obligation to maintain a shared access
- Chancel repair liability in a parish where it still applies
- A planning enforcement notice, or works without building regulations approval
- Flood risk, mining subsidence, or a contaminated land designation
- Special conditions requiring the buyer to pay the seller's costs or complete unusually quickly
When the answer is no
Some findings have a known cost and a known solution, and those can be priced and accepted. Others do not, and those are the ones to walk away from — a title that cannot be made mortgageable, a covenant that prevents the property's only sensible use, or a structural problem that cannot be remedied at any sensible cost.
The distinction is between a discount and a liability. A property with a known problem is a bargain at the right price. A property with an open-ended problem is not a bargain at any price, because you are buying an obligation whose size you cannot establish.
Common questions
- What should I look for in an auction legal pack?
- The special conditions first, because that is where obligations are imposed that a private treaty sale would have negotiated. Then the title register for covenants and rights, the lease terms on a leasehold lot, and the searches for enforcement notices and flood risk. Anything that changes what the property can be used for changes what it is worth.
- Can I negotiate the special conditions?
- Occasionally, and it is always worth asking if you are a serious bidder before the auction. Auction houses and sellers will sometimes amend a condition, particularly if it is standard for the house or if the lot has failed to sell previously. Once the hammer falls, the conditions are fixed.