Solicitors warn of potential pitfalls of buying land at auction

Would-be buyers thinking of bidding for agricultural land at auction would be wise to seek legal advice before doing so, warn mfg Solicitors LLP.

Auctions have been a popular way to buy and sell agricultural land for centuries but mfg, which has particular expertise in agricultural law, say the demand for land, farming bureaucracy and a climate of increasing litigation means potential bidders must be sure of exactly what they are committing themselves to buy.

Tom Devey of mfg warns: "When the gavel strikes, the buyer is usually bound to pay a ten per cent deposit immediately and the balance within 28 days. If you fail to do so, you will lose your deposit and may be liable under breach of contract for other consequential losses the seller may have sustained. Saying that you were unaware of the contractual provisions to which you are committed is no escape.

"A common misconception is that the solicitor acting for the vendor, who will probably attend the auction, will answer any queries before it starts. Some may be prepared to do so, but the seller's solicitor has no duty of care to a purchaser, is not insured to advise anybody other than his client and is only present to protect the seller's interests.

"The seller's solicitor may also lack in-depth knowledge of agricultural issues or be unaware of the position regarding Single Farm Payment Entitlements or the terms of any Environmental Schemes to which the land may be subject. They will not be obliged to explain the details of any overage provisions, restricting the future development of the land, which may be hiding in the small print of the contract."


He urges prospective buyers to obtain a copy of the auction package, which the seller must make available before the auction and which is usually available from the agents conducting the auction or the seller's solicitor. This should contain information on the legal title of the property being sold, a copy of the contract, searches and replies to any pertinent enquiries.

"It is good business sense to not only obtain a copy of the auction package but to seek advice from a solicitor with good knowledge of rural and agricultural issues before you raise your hand in the air. Be warned!" he added.

mfg has offices in Bromsgrove, Cleobury Mortimer, Halesowen, Kidderminster, Oswestry, Stourport-on-Severn, Telford, Wellington and Worcester.