Buying land at auction is a frequent occurrence, however there are important things to consider before you bid.
You might simply want to extend your garden, or you might be looking for a development plot. As a farmer, you might be looking to increase your acreage.
“As with a house, the key thing to remember is that if your auction bid is successful you are contractually obliged to buy the land. For auction sales, pulling out after your bid has been accepted means that you will lose your deposit (usually 10% of the purchase price).
You also need to have the funds available to pay for the land, usually within 28 days. Therefore you need to be committed before you bid.
We always advise clients to do their research. Obtain the information pack from the auctioneer and take legal advice. The kinds of things you need to look for are:-
· Are there any third party rights affecting the land? This could include sporting rights or a septic tank, used by others, located on the land;
· Is the land is subject to a tenancy or licence agreement of any type?
· Are there any restrictive covenants in place, for example: is the land for agricultural use only?
· Are there any Overage or Clawback agreements in place? If so money could be due to a previous owner if the land gets planning permission for certain developments.
· Is the land is subject to a private right of way, or public footpath or public bridleway?
· Are there any mines and minerals under the land and if so are they owned by a third party?Don’t rush into these things. Taking proper advice in advance could help avoid costly mistakes.”
Published 25 July 2019
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