What to look out for when reading a legal pack

Reading the legal pack when buying a property at auction is important for several reasons:

1. Understand the Property: The legal pack contains legal documents related to the property being auctioned, including the title deeds, local searches, and other legal documents. Reading the legal pack allows the buyer to understand the legal position such as any restrictions on use, outstanding debts or liens, and any other legal issues that may affect the property.
   
   
2. Assess the Risks: By reading the legal pack, a potential buyer can assess the risks involved in purchasing the property. For example, the legal pack may reveal that the property has planning restrictions or issues with rights of way. By understanding these risks, the buyer can make an informed decision about whether or not to bid on the property and how much to bid.
   
   
3. Plan for Additional Costs: The legal pack may contain information about additional costs that the buyer may incur, such as outstanding taxes, maintenance or repair issues, or additional fees. By knowing about these costs in advance, the buyer can plan for them and factor them into their budget.
   
   
4. Protect Your Investment: By thoroughly reading the legal pack, a buyer can ensure that they are protected legally and financially. They can verify that the seller has the right to sell the property, and that there are no outstanding legal issues that could cause problems down the line.
   
   
5. It is imperative that if you feel there is legal documents missing to contact the auctioneer or the vendors solicitor's before you bid to satisfy any concerns you may have.
   
   

Examples of documents that could be included in the legal pack:

• The reservation agreement or contract
• Auction terms and conditions
• Any special conditions of sale
• A copy of the Energy Performance Certificate (EPC)
• Official copies of the title register and title plan, plus any supplementary documents referred to in the registers of title
• Search information, including local authority searches, drainage and water search and any other searches application to the location
• The property information form (TA6)
• The fittings and contents form (TA10), unless the property is  sold as seen
• If the property is leasehold, an official copy of the lease and the leasehold information form
• For commercial properties, relevant Commercial Property Standard Enquiries (CPSE) forms
• For tenanted properties, a copy of the Assured Shorthold Tenancy (AST) Agreement
• Where applicable, documentation relation to planning permissions and building controls.

The seller is responsible for providing a legal pack and will pay their solicitor to compile this. Unfortunately, solicitors cannot do everything, so will work closely with the sellers to ensure all the information going into the legal pack is accurate. Be aware a legal pack can be incomplete, and be updated very close to the auction day.

Top tip from David Sandeman, Founder of Essential Information Group: 

"Anyone can read through the legal pack, and the covenants. Pay special attention to the special conditions which may contain a shorter completion period, an additional sellers premium, or any clauses. With covenants, look out for; non development or split, rights of way and retirement flat age restrictions. If buying leasehold, look for information regarding the length of the lease remaining, service charges and the sinking fund."

"If there is nothing obviously untoward, then ask your solicitor to confirm your views, and to consider the entire legal pack. It is important that either you, or your solicitor inspect this paperwork thoroughly prior to auction. If leasehold, it might be appropriate to knock on the neighbour's door to ask questions about the managing agent."

"It is imperative that you or your solicitor ask for any documents which you feel may be missing. I always state, the most important document in the legal pack, is often the one that is missing!"

"To put how important it is to read a legal pack into perspective, a plot of farm land that went to auction with no reserve recently in Wales sold for £100. The buyer who hadn't downloaded a single legal document, thought he had a fantastic deal, only to find out later there was £12,000 of additional fee's written in the special conditions."