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Buying Property at Auction? Don’t Dispense With Legal Checks!

Buying property at auction can be hazardous and should never be attempted without instructing lawyers to carry out all the necessary checks. In a case on point, a father and son bought a former council flat for over £200,000, in ignorance of the fact that the number of its bedrooms had been doubled without authority.

Blocks of flatsThe former tenant of the two-bedroom flat had bought it from the council under the right to buy scheme. The long lease provided that no alterations or additions could be made to the flat without the council’s written consent. However, no such consent was obtained before the flat was reconfigured to provide four bedrooms. The lease’s requirement that the tenant register any subletting of the flat with the council, and pay a reasonable charge of at least £20, had also been ignored.

The father and son subsequently bought the flat at auction for £207,500. They said that they were unaware of the breaches of the lease, which were entirely the former tenant’s responsibility. The council nevertheless complained to the First-tier Tribunal, which granted a declaration under the Commonhold and Leasehold Reform Act 2002 that two covenants contained within the lease had been breached.

Without formally committing the council, its lawyers indicated that it would be unlikely to exercise its right to forfeit the lease provided that, within a reasonable period, the father and son restored the property to its original two-bedroom configuration, registered the subletting and paid the council’s charge.



 
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