Non-Refundable deposit for Auction Property

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • Lawcruncher
    replied
    There are two ways in which the OP can be bound:

    One is that the OP did not attend the auction room personally, but submitted a bid which was not bettered in the auction room. In that case the contract was made on the fall of the hammer. A sale by public auction is one of the exceptions to the rule that a contract for the sale of land must be in writing and accordingly nothing needs to be signed.

    The other is that the intention was to sell the property at auction, but the OP made an offer which the seller accepted before.auction. The OP then signed what he would have signed had he been the successful bidder (or some other document in which the seller contracted to sell and the OP to buy the property) and the seller or the auctioneer on his behalf signed the same document or a duplicate which was handed to the OP.

    In both cases any deposit paid will be forfeit if the OP does not proceed. (But see also below.)

    However, if the OP just expressed an interest in buying and paid a depost to the auctioneer but did not sign any sort of contract or make a bid, then there is no contract. A deposit must be supported by a contract. If there is no contract the deposit is refundable.

    As to deposits generally, the starting point is that on a breach of contract the injured party is not entitled to compensation which exceeds his losses. Accordingly, if a deposit was paid the amount by which it exceeds the loss is refundable. In the case of a contract for the sale of land section 49(2) of the Law of Property Act 1925 provides that "[w]here the court refuses to grant specific performance of a contract, or in any action for the return of a deposit, the court may, if it thinks fit, order the repayment of any deposit". How the discretion is exercised is discussed here: https://www.tanfieldchambers.co.uk/2...osit-dilemmas/ - law as at 6th July 2016.

    Leave a comment:


  • ATC
    replied
    it was probably a combination of fee payable by the buyer and deposit on a small lot size property. Very unlikely to see any money back if not proceeding. I cant see that the auctioneer would have collected 3000 pounds on any other basis. They are approachable people, talk to them

    Leave a comment:


  • Stew
    replied
    I think what the OP means is that he effectively made a bid on a property under "modern auction" conditions, whether at the auction of via a different route. You will probably find out that in some of your communications there were terms and conditions associated with making your offer on the house.

    So it is not a deposit in the conventional sense of a house auction (i.e. you have not exchanged) but is a commission payment to the agency that neither forms part of the deposit or is refundable. The only time you get these back is if the seller pulls out and even then the agent won't be keen to return the money.

    On the positive side of things you won't have to pay anything if the property now sells for less, the £3k was you paying for an option to buy, you decided not to buy, you very unfortunately lose the money.

    Probably best to chalk up to experience

    Only my personal view

    All the best Stew

    Leave a comment:


  • Lawcruncher
    replied
    "We purchased a property under auction conditions"

    "We hadn't exchanged contracts or got very far"

    The two above statements are incompatible. Please confirm exactly what happened. Did you sign anything?

    Leave a comment:


  • AndrewDod
    replied
    What exactly is the point of a deposit if you don't lose it if you don't proceed. That is the entire point.

    Leave a comment:


  • royw
    replied
    Originally posted by Claymore View Post
    If you agreed to the sale under auction conditions and then withdraw, generally, if the property is resold later, at a lower price, then the Vendor can come to you for redress for the difference.

    I would check this out with your solicitor.
    Really? I've never heard of that.
    I don't think you'll get any of your deposit back.

    Leave a comment:


  • AndrewDod
    replied
    Originally posted by croboy View Post
    The auction house/vendor say the vendor is keeping the £3000 deposit which i think is pretty immoral ... is an 'unfair term' as the property can still ultimately be sold and the only deductions that should be made are the vendors costs incurred?
    As Claymore says. Yes it could be sold, but now at a lower price and with expenditure of effort and with delay.

    Nothing "immoral" about wanting contracts to be ... well contracts.

    Leave a comment:


  • Claymore
    replied
    We are in very unusual times at the moment. I don't think you are going to see the £3000 returned. If you agreed to the sale under auction conditions and then withdraw, generally, if the property is resold later, at a lower price, then the Vendor can come to you for redress for the difference.

    I would check this out with your solicitor.

    Leave a comment:


  • croboy
    started a topic Non-Refundable deposit for Auction Property

    Non-Refundable deposit for Auction Property

    Hi,

    We purchased a property under auction conditions (we didn't buy it at the auction but because we had seen it while 'under auction'we had to purchase it under auction conditions and pay a £3000 'non refundable deposit/fee' along with a premium to auction house

    long story short my wife lost her job this week as a result of Corona and we have had to pull out of purchase. We hadn't exchanged contracts or got very far.

    The auction house/vendor say the vendor is keeping the £3000 deposit which i think is pretty immoral but im wondering under Consumer Rights Act could we not argue in small claims court that withholding the £3000 is an 'unfair term' as the property can still ultimately be sold and the only deductions that should be made are the vendors costs incurred?

    Thanks

Latest Activity

Collapse

Working...
X