Auctions are a popular way of buying and selling land. If the property is sold, the parties suffer none of the uncertainty that attaches to sales by private treaty. However, one of the disadvantages of buying land at auction is that little time is left for research, and it is unusual for the buyer to commission a proper survey of the land.
The litigation in Ahmed v Landstone Leisure Ltd [2009] EWHC 125 (Ch); [2009] PLSCS 131 still hangs in the balance, as the judge was dealing with preliminary issues, before a full trial of the issues, which are hotly disputed by the parties. None the less, it illustrates the importance of thorough preparation by all parties, especially where the sale is of part only.
Auctions are a popular way of buying and selling land. If the property is sold, the parties suffer none of the uncertainty that attaches to sales by private treaty. However, one of the disadvantages of buying land at auction is that little time is left for research, and it is unusual for the buyer to commission a proper survey of the land.
The litigation in Ahmed v Landstone Leisure Ltd [2009] EWHC 125 (Ch); [2009] PLSCS 131 still hangs in the balance, as the judge was dealing with preliminary issues, before a full trial of the issues, which are hotly disputed by the parties. None the less, it illustrates the importance of thorough preparation by all parties, especially where the sale is of part only.
The proceedings concerned a property that was described in the auction catalogue as comprising 2.25 acres. Unfortunately, however, the auction land comprised a mere 0.8 acres as it formed part of a larger piece of land that was not being sold as a whole. The site had been bulldozed. There were no clearly marked internal boundaries to differentiate between the two plots and, to make matters worse, “for sale” signs stood on both plots, advertising that the land for sale comprised 2.25 acres. The property was knocked down at the auction to a bidder who claimed that he had been misled by oral assurances by the auctioneer, by the written statements in the auction catalogue and on the sale boards at the site.
The seller relied upon a warning, in the form of a late addendum to the auction catalogue, which was read to bidders on the auction day. These stated that the acreage was not definitive and should be ignored. What was the effect of this addendum? The judge took the view that it was arguable that the warning did not correct any representation that may have been made that what was being sold was the whole site.
The seller argued that an auctioneer has no authority to make representations on his behalf. However, the judge doubted whether this principle applies where an auctioneer is identifying the property that he or she is offering for sale, since this is his or her job. In addition, the general conditions of sale advised buyers to address any enquiries concerning site measurements to the auctioneers. This suggested that the auctioneer was, in fact, authorised to make representations concerning the area of the land being sold.
The seller also relied upon the special conditions of sale, which provided that the buyer had not relied upon any representations made by the seller or its agent. Did this wording circumvent the statutory controls on exclusion of liability for misrepresentation and trump the buyer’s claim (if any misrepresentation concerning the land sold were, in fact, to be proved)? Tantalisingly, the judge identified tensions between previously decided cases that need to be resolved. Practitioners will await the final outcome of these proceedings with interest.
Allyson Colby is a property law consultant
