Buyers Premium Rip-Off At Property Aution

by Readers Question

13:41 PM, 28th February 2014
About 6 years ago

Buyers Premium Rip-Off At Property Aution

Make Text Bigger
Buyers Premium Rip-Off At Property Aution

Buyers Premium Rip-Off At Property AutionHelp! I have just purchased a property at auction for the first time.

I read through all the T&C’s in the brochure and legal pack and also took professional advice from my solicitor.

Neither of us were aware of a Buyers Premium so it was a bit of a shock when £3,000 was added to the bill!

Apparently it is in small print on page 100 and something!

I am due to complete next week.

Any suggestions please?

Thanks

Sally



Comments

Mark Alexander

13:50 PM, 28th February 2014
About 6 years ago

Hi Sally

I suspect you are going to have to complete the purchase and pay up but you have the law on your side insofar as I can tell.

I have invited Mark Smith (Barrister-At-Law) to take a look at this thread - his member profile can be viewed here.

My gut instinct is that you have the ability to sue for your money back plus legal fees. You could probably do this yourself via the Small Claims Courts but you may want to get some professional help, especially if it is offered on a no win no fee basis.

I think there are two ways to progress this:-

1) Make a claim against your solicitors professional indemnity insurance for negligence. You paid for advice and your solicitor failed you.

2) Make a Small Claim Court Claim against the auction House. There is plenty of consumer protection which I think could be relevant hear. The first is Unfair Terms in Consumer Contract Regulations "UTTCR" - see http://www.oft.gov.uk/about-the-oft/legal-powers/legal/unfair-terms/#.UxCTZuN_uSo There is also a piece of case law created by OFT vs Foxtons which could be relevent. Basically, if fees are not disclosed prominently then any contractual conditions can be struck out - see >>> http://www.oft.gov.uk/OFTwork/consumer-enforcement/consumer-enforcement-completed/foxtons/qandas#.UxCT7eN_uSo

Don't let this one go, find yourself a No-Win-No-Fee lawyer or barrister.

Good luck 🙂
.

Gary Nock

14:07 PM, 28th February 2014
About 6 years ago

Sounds like one of these conditional auctions. Check the small print in the ad. What a rip off indeed.

Eleanor White

14:32 PM, 28th February 2014
About 6 years ago

Wow, £3k does sounds expensive. I bought a house at auction a couple of months ago and there was only a £300 admin fee to the buyer! What auction house was it? Mark is right that there is case law to support your claim if the details of the buyers premium were very hidden. One question that might be quite relevant though is whether you would still have bought the property if you had known about the buyers premium.

Mark Alexander

14:35 PM, 28th February 2014
About 6 years ago

Reply to the comment left by "Eleanor White" at "28/02/2014 - 14:32":

Please note our policy of no name and shame unless there has been a legal case - see http://www.property118.com/what-property118-is-not/
.

Eleanor White

14:37 PM, 28th February 2014
About 6 years ago

Reply to the comment left by "Mark Alexander" at "28/02/2014 - 14:35":

Hi Mark. Fair enough. Was just interested in having a nosey around their site to see how well displayed the buyers premium was, but totally understand the naming and shaming policy.

Sam Collett

14:47 PM, 28th February 2014
About 6 years ago

Sally,

I am sorry to hear of your experience - such a shame after the excitement of winning at auction.

Given the high level of the premium I am wondering if this was a "conditional auction" - also known as the "modern method of auctions"?

Sally Tattersall

15:20 PM, 28th February 2014
About 6 years ago

Reply to the comment left by "Sam Collett" at "28/02/2014 - 14:47":

Hi Sam

Thanks all for your interest. The fees were :

Auctioneers commission & entry expenses £1938
Sellers Levy at 1% £1082
Search fees £221.

I already paid £600 at the auction for 'entry expenses' so it's turned out to be quite a lot of money on top of my winning bid!

These were hidden apparently in a 100+ page legal pack which I sent to my solicitor before bidding at the auction.

Will completed next week and see I then what can be done!

Sally

ian

15:55 PM, 28th February 2014
About 6 years ago

Sally
Have they billed you as the seller by mistake ?

Sam Collett

16:00 PM, 28th February 2014
About 6 years ago

Reply to the comment left by "Sally Tattersall" at "28/02/2014 - 15:20":

I am surprised these expenses were not detailed in the special conditions - were these checked?

These expenses can arise when buying at auction - although they are not the buyer's premium and so it's important not to confuse the two. I think you mean the £600 you paid was the buyer's premium? (this would have been paid direct to the auction house and IS the buyer's premium)

RE: search fees - this is much the same as with private treaty. These form part of your legal searches which would have been undertaken (and would have been necessary to obtain funding). This reimbursement is common and you would've had to undertake them anyway.

The auctioneers commission & entry expenses - this does happen, but not so often. This fee will go direct to the vendor to reimburse them for their costs. Always, these are mentioned in the special conditions.

Sellers Levy at 1% - this is normal practice for council disposals and some private sales. Again, will go direct to vendors. Again, always mentioned in special conditions.

I would urge you to again check the special conditions as this is most unusual these expenses were not detailed there.

Sally Tattersall

16:02 PM, 28th February 2014
About 6 years ago

Reply to the comment left by "ian " at "28/02/2014 - 15:55":

Hi Ian

I don't think so as I rang the auctioneer who said that these costs are correct. Basically, the seller has passed all the costs onto me as the buyer. The auction house say it's a way for the seller to make up some money as the property sold below market value!! The seller seems to have levied his own 'seller levy' which is what it says on my completion statement from my solicitor.

1 2

Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?

OR

BECOME A MEMBER

Build, Build, Build! Profit From PD Rights

The Landlords Union

Become a Member, it's FREE

Our mission is to facilitate the sharing of best practice amongst UK landlords, tenants and letting agents

Learn More