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Ask The Legal Expert: Buying A Farm At Auction
- AuthorMyria Griffiths
This month Associate Solicitor Myria Griffiths advises a farmer who is keen to buy a property at auction.
I have spotted a farm coming up for auction and I am keen to bid for it. I have never bought property in this way before. What do I need to know?
Springtime is a peak time for farming properties to come up for sale and it can be exciting, as a buyer, to get involved in an auction when a property takes your eye.
Buying in this way isn’t something to be nervous about, but once the hammer has fallen there’s no going back on your purchase, so it is important to do your groundwork thoroughly and to consider the following:
- The RICS (Royal Institution of Chartered Surveyors) Common Auction Conditions will apply, so read these carefully before the auction takes place.
- Get a copy of the auction pack from the selling agent, or from the seller’s solicitor ahead of the auction, or download it. You should then instruct your own solicitor to look at this for you.
- View the property before the auction and instruct a surveyor or builder to a survey it, so you are aware of any work or renovation needed. This will help you budget for any extra costs.
- When buying agricultural property it is important to walk the land, checking boundaries and fencing, and making sure there are adequate rights of access to all areas, and water supplies to all fields. If these are not in place you could face additional costs in negotiating easements after your completion date. Watch out for any public or private rights of way over the land – if there are signs of third party use, investigate this carefully before bidding. Once you have bought the property you will not be able to raise these issues later.
- If you bid successfully you will have to pay a 10 percent deposit on the day of the auction, with the balance paid on completion – usually 28 days after the sale.
- Make sure you have agreed a mortgage in principle with your bank. If you cannot raise the balance of funds by your agreed completion date you could lose your deposit and you will be in breach of contract.
Here at JCP we are happy to prepare auction packs on behalf of sellers, or to examine an auction pack for you before you commit to buy.
Buying a property at auction brings its own complexities so I would strongly advise that you seek professional legal support in good time.
For more information please contact Myria on email@example.com or call: 01267 266949.
Welsh is spoken by JCP Solicitors’ Carmarthen Team.
*The question posed in this blog is based on a hypothetical situation.