I agreed to purchase a flat through auction and paid the 10% deposit as well as the 1.5 percent buyer’s fees.
The purchase took 8 weeks due to the seller’s solicitors refusing to provide all documents to my solicitor.
We finally received a completion date for last Friday, only to receive an email last-minute stating I owe an extra £2,790 for the seller’s fees, and that the purchase cannot be completed if I don’t pay.
The estate agent stated that there was a fee clause in the legal pack. But in my copy, it is blank. I signed it without being corrected.
I refuse to pay the fee because I didn’t know about it before. Where do I stand legally?
A buyer purchased a property from auction. He was later required to pay fees but refused.
Grace Gausden of This is Money replies: A property bought at auction can be complicated and you need to consider many factors before you commit.
It was your first time buying a property at auction. There were many rules that you didn’t know about, such as the requirement that the buyer pay the seller’s fees.
Before you bought the flat, you had not sought legal advice.
The purchase price for the home was £33,500 and you paid £1,500 in buyer’s fees. You have now been asked to pay £2,790 to cover the seller’s fees, inclusive of VAT.
In your contract, there is a line saying ‘the buyer shall on completion/exchange date pay the auctioneer’s fee of £…’
You signed the contract even though it was blank.
However, the auctioneer says there is actually nearly £3,000 to pay and has sent over a copy of their version of the contract where the sum was written in in pen.
To find out your rights, you spoke to your solicitor. They also informed you that the fee was not included in the documents they received.
Unfortunately, the documents cannot be downloaded online.
It was quite shocking to learn that you owed so much money. You said you wouldn’t have agreed to this.
You have now informed the auctioneer that this fee will not be paid and that it is a violation of contract to add fees without your consent.
The firm refuses to remove the fee. You were unable to cancel your purchase. However, they refused to refund your deposit or buyer’s fees.
This is Money asked a specialist attorney where you stand.
After being asked to fork out thousands of pounds in seller fees, a buyer at auction became confused
Sarah Dwight is a solicitor.The problem is that the buyer didn’t get legal advice before he went to the auction. The buyer didn’t know what solicitors know about the intricacies involved in an auction.
Any client, no matter how experienced, should always speak with a solicitor before placing a bid at an auction.
This is because there is usually a reason why a property goes up for auction.
It is usually because the property won’t sell on the open marketplace, or perhaps because there is a short-term lease or a missing freeholder.
In this case, the buyer could claim that the contracts were not identical when they were traded, meaning that the exchange didn’t take place correctly. Both parties of the contract need to be identical.
The buyer relied upon the fact that no additional costs were incurred and assumed that there were no fees to be paid.
Grace Gausden, This is Money adds: Unfortunately, it seems there is no easy solution as it appears, legally, no one is either in the right or wrong.
While you may have valid points of view, the sellers also have them.
Either you, or the sellers, must come to a decision. In the unlikely event that this does not happen, which seems likely to be, you may have the court case.
This will cost both of you and the seller, which can seem counterproductive.
Final decision is up to you.
It is a lesson for others though – always seek legal advice before buying a property at auction and hopefully you can avoid situations like this.