Can You Raise Enquiries When Purchasing at Auction?

Purchasing a property at auction can come with both benefits and risks – especially when it comes to legal due diligence. A common question asked by buyers is “Can I raise enquiries when buying at auction?”. In short, yes, a buyer can raise enquiries, but not without limitations.

When and how enquiries can be raised depends on the type of auction. There are two main types of auctions: traditional and modern.

In a traditional auction, bidding takes place live, and contracts are exchanged immediately at the fall of the hammer. The highest bidder, so long as their bid is over the reserve price, is legally bound to purchase the property and must pay a 10% deposit at that time, having effectively exchanged contracts. Completion then typically takes place within 28 days. As the buyer is legally committed the moment the hammer falls, all due diligence – including reviewing the legal pack and raising enquiries – must be completed before the auction day.

Modern auctions offer a longer timeframe to the buyer. Bidding is typically done online over a set period of time. The successful bidder pays a reservation fee, securing the right to buy the property. However, this is not the exchange of contracts. Instead, the buyer has 28 days to exchange contracts and 56 days to complete the purchase once the contracts have been received by the seller’s solicitors. This provides slightly more time to undertake legal checks and raise enquiries following the auction.

With traditional auctions, all enquiries must be raised before exchange, occurring immediately as the hammer falls. Therefore, it is very important to instruct a solicitor to review the legal pack as early as possible. The legal pack typically includes title documents, special conditions and searches.

Sellers are not legally required to respond to pre-auction enquiries. However, they may want to do so as it would attract more interest in their property and could encourage competitive bidding. However, any outstanding questions at the fall of the hammer will likely remain unanswered – so the buyer must be confident in the information available before they bid.

Technically, enquiries can be raised after exchange in a traditional auction, but these must be procedural or administrative – for example, to confirm arrangements for completion or to request documents for registration. However, substantive legal or title-related enquiries are no longer required to be answered at this stage in a traditional auction.

Modern auctions offer slightly more flexibility. Once the auction ends and the reservation fee is paid, the buyer’s conveyancer has five working days from receipt of the draft contract to raise legal enquiries. This gives the buyer more opportunity to identify and address any issues before becoming legally committed to the transaction.

Regardless of the auction type, buyers should be aware of certain limitations that exist when raising enquiries. From the point of exchange of contracts, the buyer is contractually bound to proceed regardless of whether any post-auction issues arise, whether the seller answered any enquiries relating to these issues or not. Unless the contract contains provisions that say otherwise, or unless the seller has actively misrepresented something, there is very little recourse for a buyer if they discover a defect after the exchange of contracts.

The legal principle of caveat emptor applies to auction purchases, and places responsibility on the buyer to discover any defects or legal issues. Sellers can often rely on this principle to avoid liability for problems that arise later on after exchange. Additionally, there are terms in the auction contract called special conditions which can limit what can be questioned or challenged. For instance, a special condition might confirm that the buyer accepts the property in its current condition or that certain defects have already been disclosed. In this case, the buyer may be unable to raise further enquiries or to query these points.

While it is possible to raise enquiries when purchasing a property at auction, a buyer’s ability to do so – and how effective those enquiries may be – depends heavily on whether they are buying through a traditional or modern auction. In both cases, early preparation and legal advice are essential.

If you are considering purchasing a property at auction, you should instruct an experienced conveyancer as early as possible, and ensure that you/your conveyancer:

• Review the legal pack thoroughly and read the report that is generated based on this
• Raise any necessary enquiries before bidding (particularly in traditional auctions)
• Understand the implications of any special conditions in the contract
• If questions remain unanswered, weigh up the potential risks of these
• Be prepared to proceed with the purchase, even if some questions remain unanswered

If you’re considering buying a property at auction, contact Charlotte Hemmings, Head of Auctions here at Attwells, on 01473 229862 for expert advice and support throughout the process.