3 Legal Pack Red Flags to Check Before You Bid
In the world of property auctions speed is part of the appeal. But with that speed comes risk especially for buyers overlooking the fine print. One of the most critical documents to examine before placing a bid is the legal pack. Prepared by the seller’s solicitor, the legal pack contains essential information about the property. While some buyers may be tempted to skim through it or rely solely on surface-level checks, this document holds the key to whether you are making a smart investment or walking into a costly mistake.
Here are three red flags every buyer should look out for when reviewing a legal pack.
1. Missing or Incomplete Searches
The legal pack should include several standard searches, such as:
- Local authority search
- Environmental search
- Water and drainage search
These searches reveal vital information about planning permissions, restrictions, potential flood risks and local infrastructure. If one or more of these searches are missing, that is a significant concern.
Sometimes sellers omit searches to save time or because the results may be unfavourable. For example, a missing local authority search could hide planning enforcement notices or building regulation issues. In some cases, searches may be included but marked “pending” meaning results have not yet been returned.
What to do: If searches are incomplete or missing, consider that a warning sign. It is good to always consult a solicitor to determine whether the absence is justified or if it introduces unnecessary risk. Avoid bidding until you have a full picture.
2. Leasehold Issues
If the property is leasehold, it is good to pay particular attention to the lease terms. This is an area where many buyers, especially first-time auction participants, get caught out.
Red flags in leasehold properties include:
- Short remaining lease (under 80 years can impact mortgage availability)
- Excessive ground rent or clauses that allow ground rent to escalate
- Unclear service charges or disputes with the freeholder
- Restrictions on subletting or alterations
These terms can have a major effect on resale value, lender approval and future obligations. Even if the initial purchase price is low, the long-term costs could far outweigh the benefits.
What to do: It is advisable to read the lease in full or have a solicitor do so on your behalf. It is not good to assume that all leasehold arrangements are equal, what looks like a bargain could be a legal and financial headache in disguise.
3. Unusual Special Conditions of Sale
Every legal pack contains special conditions of sale clauses added by the seller’s solicitor that modify the standard terms of the contract. While some are routine, others may impose unexpected costs or limitations.
Examples include:
- Non-refundable reservation fees (on top of your deposit)
- Buyer's obligation to pay the seller’s legal fees
- Short completion deadlines
- Requirements to buy additional items or take on liabilities (e.g., indemnity policies or third-party agreements)
Buyers often overlook these conditions, only to realise later that they have taken on far more than they bargained for.
What to do: It is advisable to take time to read the special conditions carefully. If anything seems unusual or unfair, consider asking a solicitor to clarify. A property with excessive or vague conditions may not be worth the risk, especially in a fast-moving auction environment.
Final Thoughts
The legal pack is not just a formality, it is a window into the property’s risks, restrictions and legal standing. While it is tempting to rush into bidding, especially when properties are competitively priced, a few hours of due diligence could save you thousands down the line. At a minimum, every buyer should:
- Review the legal pack well in advance of the auction
- Flag any gaps, inconsistencies or complex clauses
- Seek legal advice when in doubt
Property auctions offer exciting opportunities but confidence comes from preparation. Identifying red flags early often leads to more informed bidding decisions.
Read Also: Hidden Costs and Fees When Buying at Auction