Q.I need to sell a tenanted property which I own (the tenant is in arrears of rent) to raise money quickly. However, the market is dead. Is it worth considering selling at auction?
A. Some properties are particularly suited to auction sales. These include unusual properties that are difficult to value, properties that require a lot of renovation work, tenanted properties and properties of low or mixed quality. As your property is tenanted it would be suitable for an auction sale.
Q. What are the pros and cons involved?
A. The main advantages of selling property at auction are certainly, speed and control. The contract is binding when the hammer falls and the buyer is obliged to complete on the date stated in the sale contract, which the seller can set prior to the auction. Here, you could also include a condition requiring the buyer to pay to you the rent arrears, assuming that the tenant eventually pays up.
The main disadvantage of an auction sale is the cost and lack of control over the price. The seller will be required to pay the auctioneer's fees even if the property does not sell and, assuming the property reaches its reserve, the seller has no control over the price.
Selling at auction is more complicated than a normal sale and expert legal help is essential. However, we have a wealth of experience of auction sales and should you require any assistance please contact Keith by email at ks@pgslaw.co.uk or by telephone on 0808 231 7043. Patterson, Glenton & Stracey have provided legal advice to the people of South Tyneside for over 125 years. For details of their full range of services and to view previous Gazette articles please log on to www.pgslaw.co.uk.
