Auction property - clause in Special Conditions

[Kaz]

Hi

I'm considering buying a repossession auction property to refurbish and re-sell. However, there's a clause in the Special Conditions which says:

The Sellers & any Surveyor authorised by them shall have for a period of 6 months after Completion access to the property for the purpose of carrying out a Valuation for litigation purposes.

Does this mean that I won't be able to re-sell the property within that 6 month period?

Kaz

[JustinN]

This sounds like a mortgage lender in possession selling the property, in which case this is a standard clause. The lender must obtain the best price reasonably obtainable for the property; if, in a short period, you are able to sell on at a significantly higher price, they would be liable to thei borrower for selling too cheaply

In addition to the valuation clause you refer to, there is usually a clause either preventing you re-selling at a higher price within a set period or requiring you to pay over any profit you make in that time - look out for those, too

[Kaz]

Thank you for your reply Justin.

Although I have come across the valuation clause many times, I have not yet seen the other two you mention.

I find it very frustrating and downright annoying. Afterall, it's the mortgage lenders in possession who set the asking price based on their own valuation so why don't they ask the estate agent how much it could re-sell for once the refurbishment work had been done, estimate the cost of that work and then price it accordingly.

It seems unfair to me that people like myself should have to carry the can for their inefficiencies!

I guess the moral of the story is don't buy a repossession unless you intend to live in it or rent it out because as a full-time developer, there's no way I can afford to wait 6-12 months to get my money back

[JustinN]

It's the same with all "corporates" - they fix the rules to suit themselves and the smaller guys suffer the consequences