There has been plenty of opinion in the past – particularly during the boom years – of the right time to buy property. There seems to be signs of recovery in the property market. Many of these properties are being sold by Receivers appointed by the bank and there are bargains to be had.
A Receiver is often appointed by the Bank to deal with the sale of a property. There may have been Court proceedings which took the property back from the original owner or there can have been a consensual handing back of the keys. It is becoming common to see distressed property auctions where there are some great bargains to be had.
As the Receiver has to account not only to the Bank but also to the previous owner for the price he gets for the property, it is common to have property sold at auction. The Receiver, although they are appointed by the Bank, also has a legal responsibility to the owner and acts as their agent in trying to secure the best price possible. However, the Receiver’s goal is to sell the property so it is a good chance to get a very good deal.
At a receiver’s sale or property auction you need to be careful to ensure all of the legal documentation is in order – it’s useful to have your Solicitor check this on your behalf. Although the Receiver is acting as the seller of the property, there are often some guarantees or warranties that they are not in a position to provide. For example, normally a person selling a house can provide a guarantee or warranty as to the planning permission being in order. There should be a certificate from an Engineer or Architect certifying the planning has been complied with, but the Receiver is not in a position to confirm that no other alterations or works that require planning permission have been carried out.
Other things to look out for are common warranties that are missing. The Receiver is not in a position to provide warranties as to the boundary of the property or whether anyone else has any rights over the property or has acquired rights over the property. They also can’t confirm whether there has been any notices from the planning authority or any other agency in relation to the property.
For all of these reasons it is important that you have your Solicitor review the legal documents before buying from a distressed property auction. They can advise you of what is missing and what guarantees and warranties you are not getting.
If you have any questions about buying from a Receiver then please feel free to contact me directly through the contact section of this website.