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Charging order on property bought on auction - Scotland


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Hi All,

 

We've just bought our second BTL property in Glasgow through Future Auctions (although outside auction). We purchased for £40k with Home Report being £60k, so quite a bargain (or not).

 

We knew that the property would have some glitches we would need to take care of but one day before the deadline to complete, the seller's solicitor sent our solicitor all the documentation which had a surprise. A charging order on the property for £25k (£18k original amount plus £7k in interest because the seller did not pay). We were going to pull out but our solicitor, recommended by Future Auctions, said that we would most likely get sued if we did so as the auction purchase was considered "as seen". So we have gone ahead with the transaction.

 

My questions to anybody who has experienced something similar are:

1. Is the charging order something we, as buyers, need to pay? All posts I've read online say that the seller must pay from the proceeds of the sale.

2. Does it make a difference if the purchase was made via auction?

3. Is it legal for the seller and auction house not to disclose this?

4. Any suggestions on what we should do?

 

It's not a great situation to be in if you have to pay over 50% your original purchase price. So any help on this wpuld be much appreciated.

 

Thanks!

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Tough one as technically (in england anyway) its your job to validate the legal pack and see make sure therre are no exposures. Normally any charges are listed on the land regisrtry documentation so either you didn't get this properly checked or it wasn't in the legal pack. Once the hammer falls its your purchase so difficult to see how you may have some comeback - I tried to pull out once as the seller didn't include a mining report in the legal pack and i missed that it was in a mining area and should have got my own report before the auction. My solicitor pretty much said if i puled out  then i would still end up paying the price at the auction - one way or another  -as its a legal contract. I completed and luckily the mine shaft had been properly sealed etc so  it didn't make much difference from a BTL perspective - though i suspect i would have to overcome a few hurdles when i decide to get a mortgage. Since then I always ask my solictor to vet the legal pack befor ei dcide to bid.

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