Commercial property auctions and the law

What are commercial property auctions?

Despite becoming an increasingly popular way to buy property, it’s vital to prepare properly in order to take advantage of the benefits of buying and selling at auction without falling foul of legal pitfalls.

If the necessary precautions are not taken, both buyers and sellers can be at risk of legal neglect at commercial property auctions.

This type of auction deals with retail property, industrial property, offices and commercial units. It provides a solution for owners to make a quick sale and for developers to purchase at reduced prices.

All commercial property being auctioned requires a document detailing the conditions of sale, which governs the agreements between the buyer and seller once the auction is complete.

Anyone seeking to buy or sell commercial property at auction can seek legal advice and assistance in preparing the conditions of sale. Commercial property solicitors can also carry out due diligence on the auction pack, which includes any searches, enquiries and considerations regarding the property being auctioned.

What are the advantages of commercial property auctions for buyers?

The main draw of commercial property auctions for buyers is access to prices that are lower than typical market rates.

While it is true that auctions can offer an advantageous price point to buyers, due to sellers at auctions tending to be owners seeking a quick sale, it is important that any buyer enters an auction fully prepared.

This involves making sure that any property being auctioned does not have significant title defects or other undisclosed issues. Because once the auction is over and you have purchased the property, the deal is effectively complete and you are bound by the contract drawn up prior to the auction.

As such, it is highly recommended that you seek legal assistance from an experienced commercial property auction solicitor to ensure that you are not at risk of buying a defective property or binding yourself in a flawed contract.

What are the advantages of commercial property auctions for sellers?

If you are seeking to sell a property at auction, you will benefit from a much more straightforward sales process than that of a standard commercial property transaction.

The process of a sale by auction is significantly faster, with most deals being completed within four to six weeks of the auction taking place.

To ensure no unforeseen hold ups occur, it is important sellers prepare the sales pack in a timely manner, with maximum attention to detail. Commercial property solicitors with a track record of successful sales at auctions can be invaluable in this process.

How can First4Lawyers help me with commercial property auctions?

As well as checking the conditions of all relevant contracts and auction packs, the commercial property solicitors available with First4Lawyers can help you to gain a clear understanding of the title and deeds of any property you are buying or selling at auction.

Our team of specialists have a wealth of experience of acting for both buyers and sellers at auctions. We can help you to draw up contracts, ensure funds are available to be cleared once contracts are exchanged, check through all the relevant paperwork and provide legal advice on the future use of the property.

Likewise, if you encounter an issue following buying or selling a property at auction, there could be ways we can work to solve your issue. Just get in touch for a chat and we'll let you know how we can help.