When buying a house at auction in the UK, a legal pack is a compilation of important legal documents relating to the property being sold.
It is usually provided by the seller’s solicitor or the auction house and will typically include copies of the title deeds, searches and leasehold information – if applicable.
There will also be notes on any special conditions of sale.
The legal pack is designed to provide the buyer with all the necessary information to make an informed decision about purchasing the property, and to help speed up the sales process.
That’s because it is important for the buyer to thoroughly review the legal pack before making an offer on the property, and to seek advice from their solicitor if necessary.
However, a full and comprehensive legal pack is only required for auction properties, not those sold by private treaty.
Here, the Property Road team looks at both.
What is included in an auction legal pack?
The auction legal pack is important because there is a major risk that comes with buying property at auction and a potential buyer needs to reduce this risk to avoid what could be an expensive mistake. The pack should contain:
The title deed (sometimes called the title register)
There will be a copy of the title register from the Land Registry that confirms the ownership of the property and how much was paid originally. The document will also detail any charges, such as an outstanding mortgage or other types of secured loan against the property.
The document may also have details of restrictive covenants, third-party consents and negative easements. If you have any issues with the title deed in the auction legal pack, then you need to speak with a solicitor with the relevant experience.
Title plan
One of the important issues is to know the boundaries of the property’s land – this is also downloaded from Land registry.
Conveyancing
The seller’s solicitor or the auction house will carry out conveyancing searches before the auction takes place and this process will offer information about the immediate vicinity of the property.
This is a crucial part of an auction legal pack since the conveyancer will make requests to public bodies and local authorities. These will include questions about flood risk, boundaries and drainage.
This document needs to be carefully examined to ensure that there is nothing unusual to catch a buyer out.
Energy performance certificate
The property will need an up-to-date energy performance certificate (EPC) since this is a legal requirement for a property seller. If the property has been rented or sold in the last 10 years, there will probably be a valid EPC certificate registered.
The auction terms and conditions of sale
You will find that the auctioneer will include its terms and condition in the pack. As a buyer, you’ll need to know about the process involved since most auctioneer’s demand that a non-refundable reservation is paid once the bid is made – that’s when the hammer falls on the auction.
You’ll then have 28 days to exchange contracts and there’s another 28 days for the sale to be completed.
Be aware, the reservation fee is usually around 10% of the property’s value. If you do not complete the sale, for whatever reason, and it’s unlikely the fee will be returned.
The conditions of sale will also clearly state the contractual variations and any extra sales commissions and what happens if there is an issue with the title that can only be resolved post-completion. Also, there will be details if the property is going through probate. The sale conditions do vary between auction houses.
Property information forms
There are several property information forms that need to be completed, including the TA6 that must be filled in by the seller and it must be an honest disclosure including any potential neighbour disputes and complaints, warranties and guarantees and boundary issues.
There’s also the TA10 which will detail the physical items that the seller is including as part of the sale, such as the bathroom and kitchen fittings and curtains and carpets.
The TA7 needs to be completed if the property is leasehold and this will have the relevant details of the lease, contact details, service charges, invoices and consents, plus any supplemental deeds.
There’s also the LPE1 which needs to be completed by a management company, freeholder or landlord and will detail things like deeds of covenant, fire safety certificates, maintenance agreements and any disputes.
It’s worth noting that the LPE2 is a summary of the LPE1 and includes the service charges, ground rent costs and insurance premiums – some management companies may also include any relevant bank statements.
If the property being sold is leasehold, then there’s more information that will be included such as health and safety policies, fire risk assessments, deeds of variation and any permissions for altering the property, among them.
Auction house may be offering a tenanted property
And you may find that since there are growing numbers of landlords selling their properties, the auction house may be offering a tenanted property, that is one with tenants living ‘in situ’, so they will add:
- The tenant’s assured shorthold tenancy, or any licences
- If it’s a house of multiple occupation (HMO) then you need to see the individual room tenancies
- If the HMO is subject to a local authority licence, then you’ll need these details.
Along with this information, the buyer will need to know who is living in the property, who is paying rent if it’s a family and if there have been any instances of rent arrears or voids – that’s when a property is empty, and no one is paying rent.
A potential buyer of a tenanted property will need to know whether section 21 or section 8 notices have been served in the past – these notices are for the eviction processes.
Again, there will need to be a valid energy performance certificate, a Gas Safety certificate and you’ll need to know that the smoke and carbon monoxide alarms are working.
In England, the tenants will need proof of ‘Right to Rent’ checks being carried out and the buyer will also need to know where the tenant’s deposit is being held – this is a legal requirement and important when the tenant leaves the property.
How to access a legal pack
The legal pack for a property you are interested in will be available to download from the auction house website to prospective bidders. Some auction houses will also mail them out.
Once you receive the legal pack, and if you are keen on bidding for property, then you need to examine its content carefully, if you have any questions, then this might be the moment to hire a solicitor with relevant experience.
Why are auction legal packs necessary?
The simple answer about why auction legal packs are necessary is down to the nature of the auction process because the buyer will be bound by a legal contract or a reservation agreement once the hammer falls to complete the purchase of the property.
That means they will need relevant information before committing to buy a property.
And since this is a legal pack, it will bring confidence when making a bid since the transaction needs to be completed quickly.
What is not in a legal pack?
While most legal packs will contain the same information, they can be different.
It’s worth noting that most legal packs won’t have a surveyor’s report on the condition of the property. You can organise a survey after you have bought the house but if there are major issues, then you’ll be stuck with them.
Property investors will have a survey carried out beforehand so they know more about the property and can make a bid knowing what the issues are.
Is the legal pack the same as the seller’s information?
There are a lot of similarities between the conveyancing process and the legal pack, with the latter containing more details upfront for a buying decision to be made.
However, buying a house by private treaty means the legal process is similar but not as comprehensive. The documents that you need to sell a house include:
- The title register/deeds from Land Registry;
- The energy performance certificate;
- Proof of ownership;
- The contract of sale and transfer deed, and any details of a lease.
Other common documents include:
- The property information form (TA6);
- The contents and fittings form (TA10);
- The memorandum of sale;
- A Gas Safety certificate (though it’s not a legal requirement );
- Electrical safety certificate (again, there is no legal requirement for this unless you have altered or extended the wiring in your property after January 2005);
- A floorplan;
- A leasehold pack with leasehold information – the TA7 form;
- FENSA certificates for the windows (also, yours might be a CERTASS certificate);
- You also need to offer proof of identity such as a driving licence or passport.
And if your home is a new build property, that’s a home that is less than 10 years old, then you need to offer a copy of any warranty or new-home policy documents.
Another issue when it comes to selling a property, is if you’ve made any changes then you’ll need to show evidence that you have the proper approvals and consents including the building regulations approvals, planning permissions and completion certificates.
What is a legal pack when buying a house?
Put simply, a legal pack when buying a house at auction is just about everything a potential buyer needs to know before making a bid.
There is a lot of information in these packs, and it is incumbent on the prospective bidder to do their research beforehand because once they commit to buying a property at auction once the hammer falls – then they are legally compelled to see it through.
That means paying a deposit and meeting the deadlines set by the auction house to complete the sale. Not being prepared or not even reading the pack means the buyer is at risk of buying a house they might regret doing – and the legal pack effectively protects the seller and auction house from any legal comeback.
