Problems with the property Perhaps the most common reason for a property to be placed into auction in Northern Ireland is that there is a difficulty with the property itself meaning that it cannot be sold on the open market via an estate agent in the usual fashion. This can mean difficulties with either planning permission or building control for any works which have been carried out to the property previously or structural issues such as damp, subsidence, a cavity wall tie failure or any other number of defects. If a property in an auction broker has caught your eye you should always visit the property in advance of making any bid and preferably do so with the assistance of a builder or a surveyor who can give you advice about the extent of any remedial works which may be required. A property which is listed at bargain price of £50,000 may not be so attractive if it then needs £30,000 worth of work carried out to it. Problems with the title of the property Perhaps less obvious are problems with the title deeds of the property which make it unsuitable for sale on the open market. These can be issues such as the lack of right of way or a disputed access route, issues with the management company of any common areas, or the lack of connection to services which are vital to the property such as for the correct use of a septic tank. The auctioneers will inevitably have an auction pack which is available for you to view. If you are buying a property you should have this title pack reviewed in advance by your solicitor who can advise you of any pitfalls which are obvious from these title deeds in advance of you making any bid. With auction properties, if successful you will be obliged to pay a hefty deposit and are committed to the purchase immediately. Viewing the property in advance and having the title deeds viewed by your solicitors can limit the prospects of you finding out difficulties with the property once you are its owner. If you do go on to purchase the property you can make a realistic budget to have these dealt with post-completion. Whilst there is no doubt that the headline price for auction properties can appear to be attractive, there tends to be a reason why the property is being sold at auction in the first place. It is up to you to carry out your own enquiries in before you commit yourself to the purchase. You will all have seen popular daytime television programmes which follow a property as it is sold at auction and its subsequent regeneration by its new owner. These programmes often show that there is a profit to be made either by selling the property on following its refurbishment or by placing same on the rental market. If however you are considering purchasing property at auction there are two main things which you must consider.
If you are thinking of buying a property at auction the please contact our Property Law Partner Ruth Flinn on rflinn@fhanna.co.uk or by calling 028 9024 3901 to discuss the review of a title pack in advance of any bid that you may be inclined to make.