Selling by Auction

Common Auction Conditions

(Edition 1 October 2005)
Reproduced with the consent of the RICS

GLOSSARY

In the conditions wherever it makes sense:

• Singular words can be read as plurals, and plurals as singular words
• A ‘person’ includes a corporate body
• Words of one gender include the other genders
• Where the following words appear in bold they have specified meanings:

Actual completion date
The date when completion takes place or is treated as taking place for the purposes of apportionment and calculating interest

Addendum
An amendment or addition to the conditions whether contained in a supplement to the catalogue, a written notice from the auctioneers or an oral announcement at the auction

Agreed completion date
(a) the date specified in the special conditions , or
(b) if no date is specified, 20 business days after the contract date but if that date is not a business day the first subsequent business day

Approved bank
A UK clearing bank

Arrears
Arrears of rent and other sums due under the tenancies but unpaid on the actual completion date

Auction
The auction advertised in the catalogue

Auctioneers
The auctioneers at the auction

Business day
Any day except
(a) a Saturday or Sunday
(b) a bank holiday in England and Wales or
(c) Good Friday or Christmas Day.

Buyer
The person who agrees to buy the lot or, if applicable, that person's personal representatives: if two or more are jointly the buyer all obligations can be enforced against them jointly or against each of them separately

Catalogue
The catalogue to which the conditions refer including any supplement to it

Completion
completion of the sale of the lot

Conditions
This glossary, the conditions for the conduct of the auction, the general conditions, any extra conditions and the special conditions

Contract
The contract by which the seller agrees to sell and the buyer agrees to buy the lot

Contract Date
The date of the auction or,if the lot is not sold at the auction:
(a) the date of the sale memorandum signed by both the seller and buyer or
(b) if contracts are exchanged, the date of exchange. If exchange is not effected in person or by an irrevocable agreement to exchange made by telephone, fax or electronic mail the date of exchange is the date on which both parts have been signed and posted or otherwise placed beyond normal retrieval.

Documents
documents of title (including, if title is registered, the entries on the register and the filed plan) and other documents listed or referred to in the special conditions relating to the lot

Extra conditions
Any additions to or variations of the conditions that are of general application to all lots general conditions The conditions so headed

Interest rate
If not specified in the special conditions, 4% above the base rate from time to time of Barclays Bank plc

Lot
Each separate property described in the catalogue or (as the case may be) the property that the seller has agreed to sell and the buyer to buy

Old arrears
Arrears due under any of the tenancies that are not ‘new tenancies ’as defined by the Landlord and Tenant (Covenants) Act 1995

Particulars
The section of the catalogue that contains descriptions of each lot

Practitioner
A receiver,administrative receiver or liquidator or a trustee in bankruptcy

Price
The price that the buyer agrees to pay for the lot

Ready to complete
Ready, willing and able to complete: if completion would enable the seller to discharge all financial charges secured on the lot that have to be discharged by completion, then those outstanding financial charges do not prevent the seller from being ready to complete

Sale memorandum
The form so headed set out in the catalogue in which the terms of the contract for the sale of the lot are recorded

Seller
The person selling the lot

Special conditions
The conditions so headed that relate to the lot

Tenancies
All tenancies, leases, licences to occupy and agreements for lease and any documents varying or supplemental to them

Transfer
Includes a conveyance or assignment (and to transfer includes to convey or to assign)

TUPE
The transfer of Undertakings (Protection of Employment) Regulations 1981 as modified or re-enacted from time to time

VAT
Value Added Tax or other tax of a similar nature

VAT election
An election to waive exemption from VAT in respect of the lot

We (and us and our)
The auctioneers

You (and your)
Someone who has a copy of the catalogue or who attends or bids at the auction, whether or not a buyer

The Conduct Of The Auction

The catalogue is issued only on the basis that you accept these conditions relating to the conduct of the auction. They override all other conditions and can only be varied if we agree.

Our role
As agents for each seller we have authority to:

• Prepare the catalogue from information supplied by or on behalf of each seller
• Offer each lot for sale
• Sell each lot
• Receive and hold deposits
• Sign each sale memorandum
• Treat a contract as repudiated if the buyer fails to sign a sale memorandum or pay a deposit as required by the conditions

Our decision on the conduct of the auction is final.

Bidding and reserve prices
We may refuse to accept a bid. we do not have to explain why.

If there is a dispute over bidding we are entitled to resolve it, and our decision is final.

Unless stated otherwise each lot is subject to a reserve price. If no bid equals or exceeds that reserve price the lot will be withdrawn from the auction .The seller may bid (or ask us or another agent to bid on the seller’s behalf) up to the reserve price but may not make a bid equal to or exceeding the reserve price.

Where a guide price is given that price is not to be taken as an indication of the value of the lot or of the reserve price.

The particulars and other information
We have taken reasonable care to prepare particulars that correctly describe each lot. However the particulars are based on information supplied by or on behalf of the seller and we are not responsible for errors.

The particulars are for your information but you must not rely on them. They do not form part of any contract between the seller and the buyer.

If we provide any information or a copy of any document we do so only on the basis that we are not responsible for its accuracy.

The contract
A successful bid is one we accept as such.

If you make a successful bid for a lot you are obliged to buy that lot on the terms of the sale memorandum. The price will be the amount you bid plus VAT (if applicable).You must before leaving the auction:

• provide all information we reasonably need from you to enable us to complete the sale memorandum (including proof of your identity that complies with money laundering regulations)
• sign the completed sale memorandum and
• pay the deposit

and if you do not we may either

• As agent for the seller treat that failure as your repudiation of the contract and offer the lot for sale again: the seller may then have a claim against you for breach of contract; or
• sign the sale memorandum on your behalf

Deposits must be paid by cheque or by bankers’ draft drawn in our favour on a UK clearing bank or building society. The catalogue states whether we also accept debit or credit cards.

We may retain the sale memorandum signed by or on behalf of the seller until we receive the deposit in cleared funds.

If you make a successful bid for a lot

• You are personally liable to buy it even if you are acting as an agent. It is your responsibility to obtain an indemnity from the person for whom you are the agent
• Where the buyer is a company you warrant that the buyer is properly constituted and able to buy the lot
• If the buyer does not comply with its obligations under the contract you are personally liable to buy the lot and must indemnify the seller in respect of any loss the seller incurs as a result of the buyer's default

General Conditions

The general conditions apply except to the extent that they are varied by extra conditions ,the special conditions or by an addendum .

1. The lot

• 1.1 The lot, including any rights granted and reserved, is described in the special conditions.
  
  
• 1.2 The lot is sold subject to all subsisting tenancies, but otherwise with vacant possession on completion
  
  
• 1.3 The lot is sold subject to all matters contained or referred to in the documents (except financial charges: these the seller must discharge on or before completion) and to such of the following as may affect it, whether they arise before or after the contract date and whether or not they are disclosed by the seller or are apparent from inspection of the lot or from the documents :
  
  (a) matters registered or capable of registration as local land charges
  (b) matters registered or capable of registration by any competent authority or under the provisions of any statute
  (c) notices, orders, demands, proposals and requirements of any competent authority
  (d) charges,notices,orders,restrictions, agreements and other matters relating to town and country planning,highways or public health
  (e)rights,easements,quasi-easements,and wayleaves
  (f) outgoings and other liabilities
  (g) any interest which overrides, within the meaning of the Land Registration Act 2002
  (h) matters that ought to be disclosed by the searches and enquiries a prudent buyer would make, whether or not the buyer has made them
  (i) anything the seller does not and could not reasonably know about and where any such matter would expose the seller to liability the buyer is to comply with it and indemnify the seller against liability.
  
  
• 1.4 The seller must notify the buyer of any notices, orders, demands, proposals and requirements of any competent authority of which it learns after the contract date but the buyer is to comply with them and keep the seller indemnified
• 1.5 The lot does not include any tenant ’s or trade fixtures or fittings.
• 1.6 Where chattels are included in the lot the buyer takes them as they are at completion and the seller is not liable if they are not fit for use.
• 1.7 The buyer buys with full knowledge of
  
  (a) the documents whether or not the buyer has read them
  (b) the physical condition of the lot and what could reasonably be discovered on inspection of it, whether or not the buyer has inspected it.
  
• 1.8 The buyer is not relying on the information contained in the particulars or in any replies to preliminary enquiries but on the buyer ’s own verification of that information. If any information is not correct any liability of the seller and any remedy of the buyer are excluded to the extent permitted by law.

2. Deposit

• 2.1 The amount of the deposit is the greater of:
  
  (a) the minimum deposit stated in the catalogue (or the total price, if this is less than that minimum), and
  (b) 10%of the price exclusive of VAT .
  
  
• 2.2 The deposit:
  
  (a) must be paid to the auctioneers by cheque or banker ’s draft drawn on a UK clearing bank or building society (or by such other means of payment as they accept)
  (b) is to be held as stakeholder unless the special conditions provide that it is to be held as agent for the seller.
  
  
• 2.3 Where the auctioneers hold the deposit as stakeholder they are authorised to release it and any interest on it to the seller on completion or, if completion does not take place, to the person entitled to it under the conditions.
  
  
• 2.4 If a cheque for the deposit is not cleared on the first presentation the seller is entitled to treat the contract as at an end and bring a claim against the buyer for breach of contract.
  
  
• 2.5 Interest earned on the deposit belongs to the seller unless the conditions provide otherwise.

3. Transfer of risk and insurance

• 3.1 From the contract date the seller is under no obligation to insure the lot and the buyer bears all risk of loss or damage unless
  
  (a) the lot is sold subject to a tenancy which requires the seller to insure the lot or
  (b) the special conditions require the seller to insure the lot.
  
  
• 3.2 If the seller is to insure the lot then the seller:
  
  (a) must produce to the buyer on request details of the insurance policy
  (b) must use reasonable endeavours to maintain that or equivalent insurance and pay the premiums when due
  (c) gives no warranty as to the adequacy of the insurance
  (d) must, at the request of the buyer, use reasonable endeavours to have the buyer ’s interest noted on any insurance policy that does not cover a contracting purchaser
  (e) must, unless otherwise agreed, cancel the insurance at completion
  (f) is to hold in trust for the buyer any insurance payments that the seller receives in respect of loss or damage arising after the contract date and the buyer must on completion reimburse to the seller the cost of insurance (to the extent it is not paid by a tenant or other third party) from the contract date.
  
  
• 3.3 If under a tenancy the seller insures the lot then unless otherwise agreed with the buyer the seller is to pay any refund of premium
  
  (a) to the buyer or
  (b) if the special conditions so state, to each tenant in the proportion that the tenant pays premiums under its tenancy, first deducting any arrears of premium due from that tenant.
  
  
• 3.4 Section 47 of the Law of Property Act 1925 does not apply.
  
  
• 3.5 Unless the buyer is already lawfully in occupation of the lot the buyer has no right to enter into occupation prior to completion.

4. Title

• 4.1 Unless general condition 4.2 applies, the buyer accepts the title of the seller to the lot as at the contract date and may raise no requisition or objection except in relation to any matter following the contract date.
  
  
• 4.2 The buyer may raise no requisition or objection to any documents made available before the auction but in relation to any of the documents that is not available before the auction the following provisions apply;
  
  (a) if the lot is registered land the seller is to give to the buyer within five business days of the contract date an office copy of the entries on the register and filed plan and of all documents noted on the register that affect the lot
  (b) if the lot is not registered land the seller is to give to the buyer within five business days an abstract or epitome of title starting from the root of title mentioned in the special conditions (or, if none is mentioned, a good root of title more than 15 years old) and must produce to the buyer the original or an examined copy of every relevant document
  (c) the buyer has no right to object to or make requisitions on any title information more than seven business days after that information has been given to the buyer
  
  
• 4.3 Unless otherwise stated in the special conditions the seller sells with full title guarantee except that:
  
  (a) all matters recorded in registers open to public inspection are to be treated as within the actual knowledge of the buyer and
  (b) any implied covenant as to compliance with tenant's obligations under leases does not extend to the state or condition of the lot where the lot is leasehold property.
  
  
• 4.4 If title is in the course of registration title is to consist of certified copies of
  
  (a) the documents sent to the land registry
  (b) the application to the Land Registry and a letter under which the seller or its conveyancer agrees to use all reasonable endeavours to answer any requisitions raised by the Land Rregistry and to instruct the Land Registry to send the completed registration documents to the buyer.
  
  
• 4.5 The transfer is to have effect as if expressly subject to all matters subject to which the lot is sold under the contract .
  
  
• 4.6 The seller does not have to produce, nor may the buyer object to or make a requisition in relation to, any prior or superior title even if it is referred to in the documents.

5. Transfer

• 5.1 Unless a form of transfer is set out in the special conditions
  
  (a) the buyer must supply a draft transfer to the seller at least ten business days before the agreed completion date and the engrossment (signed as a deed by the buyer if condition 5.2 applies) five business days before that date or (if later) two business days after the draft has been approved by the seller and
  (b) the seller must approve or revise the draft transfer within five business days of receiving it from the buyer.
  
  
• 5.2 If the seller remains liable in any respect in relation to the lot (or a tenancy) following completion the buyer is specifically to covenant in the transfer to indemnify the seller against that liability.
  
  
• 5.3 The transfer cannot be required to transfer the lot to anyone other than the buyer, or by more than one transfer.
  
  
• 5.4 The seller cannot be required to transfer the lot to anyone other than the buyer, or by more than one transfer.

6. Completion

• 6.1 completion is to take place at the offices of the seller’s solicitors conveyancer, or where the seller may reasonably require, on the agreed completion date. The seller can only be required to complete on a business day and between the hours of 0930 and 1700.
  
  
• 6.2 The amount payable on completion is the balance of the price adjusted to take account of apportionments plus (if applicable) VAT and interest.
  
  
• 6.3 Payment is to be made in pounds sterling and only by:
  
  (a) direct transfer to the seller’s conveyancer’s client account and
  (b) the release of any deposit held by a stakeholder.
  
  
• 6.4 Unless the seller and the buyer otherwise agree completion takes place when both have complied with their obligations under the contract and the total payment is unconditionally received in the seller’s conveyancer’s client account.
  
  
• 6.5 If completion takes place after 1400 hours for a reason other than the seller’s default it is to be treated, for the purposes of of apportionment and calculating interest, as if it had taken place on the next business day.
  
  
• 6.6 Where applicable the contract remains in force following completion.

7. Notice to complete

• 7.1 The seller or the buyer may on or after the agreed completion date but before completion give the other notice to complete within 10 business days (excluding the date on which the notice is given) making time of the essence.
  
  
• 7.2 The person giving the notice must be ready to complete.
  
  
• 7.3 If the buyer fails to comply with a notice to complete the seller may, without affecting any other remedy the seller has,
  
  (a) rescind the contract
  (b) claim the deposit and any interest on it if held by a stakeholder
  (c) forfeit the deposit and any interest on it
  (d) resell the lot and
  (e) claim damages from the buyer.
  
  
• 7.4 If the seller fails to comply with a notice to complete the buyer may, without affecting any other remedy the buyer has,
  
  (a) rescind the contract and
  (b) recover the deposit and any interest on it from the seller or, if applicable, a stakeholder.

8. If the contract is brought to an end

• If the contract is rescinded or otherwise brought to an end:
  
  (a) the buyer must return all papers to the seller and appoints the seller its agent to cancel any registration of the contract (b) the seller must return the deposit and any interest on it to the buyer (and the buyer may claim it from the stakeholder, if applicable) unless the seller is entitled to forfeit the deposit under general condition 7.3.

9. Landlord's licence

• 9.1 Where the lot is leasehold land and licence to assign is required this condition applies.
  
  
  
• 9.2 The contract is conditional on that licence being obtained, by way of formal licence if that is what the landlord can lawfully require.
  
  
  
• 9.3 The agreed completion date is to be not earlier than the date five business days after the seller has given notice to the buyer that the licence has been obtained.
  
  
• 9.4 The seller must:
  
  (a) use all reasonable endeavours to obtain the licence at the seller’s expense and
  (b) enter into any authorised guarantee agreement properly required.
  
  
• 9.5 The buyer must:
  
  (a) promptly provide references and other relevant information, and
  (b) comply with the landlord’s lawful requirements
  
  
• 9.6 If within three months of the contract date (or such longer period as the seller and buyer agree) the licence has not been obtained the seller or the buyer may (if not then in breach of any obligation under this condition) by notice to the other rescind the contract at any time before licence is obtained. Rescission is without prejudice to the claims of either seller or buyer for breach of this condition 9.