Q&A Buying chalet at auction - is there any comeback on seller or auction house?

Q:      I bought a holiday chalet at auction, complete with 30-odd bookings on Airbnb. The deposits had been paid to the seller, supposedly reflected in the guide price. However, when the first guests arrived other owners complained to the management company. Only then did I discover there were restrictive covenants barring children and pets. I have now had to cancel bookings and am having trouble re-letting. To boot, cancelled guests are demanding I refund their deposits. The seller doesn’t want to know, saying I inherited the bookings, so I inherit the refund liability. Is there any comeback on the auctioneer?

A:       Firstly, the contract on an auction sale is with the seller, not the auctioneer. Prior to the sale you should have had access to a seller’s pack prepared by the seller’s solicitor, which should have included information such as restrictive covenants. Had you asked your own solicitors to check through the sales pack prior to attending the auction, they could have advised you of any difficulties in purchasing such a property for holiday lets.

Listing sites such as Airbnb will display their terms and conditions with regards to cancelled bookings and owners can be removed from the sites or charged fees for cancelling bookings. This can affect the owner’s reputation, so making a full refund may be advisable if the offer of simply providing alternative dates is not an option.

Do you have any form of redress against the seller? It would appear not. Once the auctioneer’s hammer has fallen, the seller has no further responsibility for matters relating to the property unless he has deliberately withheld or misrepresented information relating to the sale. As the restrictive covenants would have been discoverable in the pre-sale pack searches, this argument appears unlikely. It is always wise to seek legal advice before committing oneself to any large financial transaction such as this.

This question has been answered by Rod Waters, a Senior Solicitor with GHP Legal.  If you would like to speak to someone about this or any other legal matter it is still possible, and we are doing everything we can to ensure that we continue to offer our high levels of service to our clients.  Where possible, we ask that you communicate with us by phone or email. If you have a new enquiry or for an appointment visit www.ghplegal.com or contact one of our offices: Wrexham 01978 291456, Llangollen 01978 860313, Oswestry 01691 659194