10 Red Flags in Auction Legal Packs That Cost Buyers Thousands

Lease Length Under 85 Years

Where to find it: The Official Copy of the Register of Title (the title register), or the lease document itself.

For leasehold properties — flats, and some houses — the remaining lease length determines whether you can mortgage it, sell it, and at what price.

The magic numbers:

• Under 85 years: mainstream mortgage lenders start getting nervous
• Under 80 years: lease extension becomes significantly more expensive (the "marriage value" calculation kicks in, which entitles the freeholder to a share of the uplift in value)
• Under 70 years: most high street lenders won't touch it; you're a cash-only buyer

What it costs you: A lease extension on a flat can run from £10,000 to £50,000+ depending on the property value, the ground rent, and how much time is left. On a short lease, you'll almost certainly pay more for the extension than you saved at auction.

What to do: Check the lease length before you even download the rest of the pack. If it's under 85 years, get an extension cost estimate from a specialist surveyor before bidding. Factor that cost into your maximum bid.

Possessory Title

Where to find it: The title register, first line of the Proprietorship Register — it will say "Title absolute" (good) or "Possessory title" (concern).

Possessory title means the seller can't prove an unbroken chain of ownership. This typically happens with properties that have been informally occupied for years, inherited without probate, or had lost title deeds.

What it costs you: Most mainstream mortgage lenders won't lend on possessory title. Even as a cash buyer, you'll struggle to sell or remortgage later. The seller should have title insurance in place — check whether it's included in the pack, what it covers, and whether a lender would accept it.

What to do: If you see "Possessory title," immediately look for the title indemnity insurance policy in the pack. Read the exclusions carefully. Ask your solicitor whether this is insurable to the standard required for your exit strategy.

Seller's Costs Passed to Buyer via Special Conditions

Where to find it: The Special Conditions of Sale — usually one of the first documents in the pack, but often the one buyers read last.

The Special Conditions can override the standard auction terms and impose almost any obligation on the buyer. One of the most common — and most expensive — is a clause requiring the buyer to reimburse the seller's legal costs on completion. This can include:

• The cost of preparing the legal pack (£500–£1,500)
• Search fees (£300–£800)
• The seller's solicitor's conveyancing fee (£500–£2,000)
• VAT on all of the above

A property with a £150,000 guide price could legitimately cost you £154,000 by the time these clauses are totalled up. They're not illegal. They're not even unusual. But they're binding the moment the hammer falls.

What it costs you: Typically £1,000–£3,500 in unexpected costs, depending on the property complexity.

What to do: Read every line of the Special Conditions before you even look at the photos. Add any additional costs to your spreadsheet before setting your maximum bid. PackCheck flags these clauses automatically.

Restrictive Covenants That Kill Your Strategy

Where to find it: The title register (Charges Register section), or in the historical conveyances referenced within the register.

A restrictive covenant is a legal obligation attached to the land — not the owner — that restricts how the property can be used. They survive ownership changes. They can be decades or even centuries old.

Common ones that destroy investor strategies:

• "Residential use only" — kills an HMO or commercial conversion plan
• "No structural alterations without consent" — blocks extensions or loft conversions
• "No more than one dwelling on the plot" — kills a garden subdivision plan
• "No trade or business to be carried on" — rules out a serviced accommodation or holiday let use

What it costs you: Best case: an indemnity policy (£200–£800) and a delay. Worst case: an entire strategy collapses.

What to do: Match the covenants against your intended use before bidding. If a covenant conflicts with your plan, get specific legal advice on enforceability and insurability before the auction.

Overage Clause

Where to find it: The Special Conditions of Sale, sometimes called "clawback" provisions.

An overage clause is an agreement that if you subsequently obtain planning permission, develop the land, or sell at a profit above a certain threshold, you pay a percentage of that uplift to the previous owner. Periods of 10, 20, or even 25 years are common. Percentages of 20–40% of the uplift are standard.

This catches investors who buy land or property with development potential at auction, spend money obtaining planning permission, and then discover they owe the original seller a five-figure sum before they can complete the development or sell.

What it costs you: It can reduce your development profit by 20–40%. On a property with £200,000 of planning uplift, you'd owe £40,000–£80,000 to someone you've never met.

What to do: If you see an overage clause, have your solicitor model the financial impact under different scenarios. Sometimes these are negotiable pre-auction. Sometimes the deal still works; sometimes it doesn't. But you need to know before you bid.

Missing or Incomplete Searches

Where to find it: Check the index of documents. A complete pack for a residential property should include a Local Authority search, a Drainage and Water search, and an Environmental search at minimum.

Searches reveal planning history, enforcement notices, proposed road schemes, drainage connections, flood risk, and contaminated land. When they're missing, you're bidding blind on those issues.

Why are they often missing? Several reasons, none of them reassuring:

• The pack was prepared late and the searches weren't back in time
• The property is a repossession and the lender/receiver didn't order them
• There's something in the searches the seller doesn't want you to see

What it costs you: You don't know — that's the problem. Absent searches mean you're guessing on issues that could cost tens of thousands to remediate.

What to do: If searches are missing, either get your solicitor to order emergency searches before auction, or price in a risk premium on your maximum bid. Sometimes the right answer is to walk away.

Short or Accelerated Completion Period

Where to find it: Special Conditions of Sale — look for the completion date or completion period.

Standard auction completion is 20–28 working days from exchange. That's already tight. But some sellers — particularly banks, LPA receivers, and certain probate executors — specify shorter periods: 10 days, 14 days, sometimes even 5 working days.

Why does this matter?

• Bridging finance typically takes 5–10 working days to arrange, even when pre-approved in principle
• If you need a mortgage, 10 days is impossible
• Even as a cash buyer, legal work, ID checks, and money transfers take time

Missing the completion deadline has serious consequences: the seller can serve notice requiring completion, charge interest on the outstanding balance (often at 4–5% above base rate), and ultimately rescind the contract and forfeit your deposit.

What it costs you: Potentially your entire deposit (10% of the purchase price), plus interest, plus abortive legal fees.

What to do: If the completion period is under 20 working days, speak to your bridging lender or solicitor before the auction to confirm they can work to that timeline. If they can't, don't bid.

Service Charge Arrears on Leasehold Property

Where to find it: The management information pack (for leasehold properties), or the Special Conditions of Sale.

When you buy a leasehold property, you take on any outstanding service charge arrears owed by the previous owner. The freeholder or managing agent doesn't reset the debt when ownership changes — they just pursue the new owner instead.

Service charge arrears can arise from:

• The previous owner simply not paying for months or years
• Major works demanded by the freeholder that the owner couldn't or wouldn't fund
• Disputed charges that have been accumulating interest

What it costs you: Anything from a few hundred pounds to tens of thousands on properties with major works in progress. One investor bought a flat at auction only to receive a demand for £22,000 in service charge arrears three weeks after completion — it was buried in a management pack that wasn't in the legal pack at all.

What to do: For any leasehold, insist on seeing the management information pack including the last three years of service charge accounts and any major works notices. If it's missing, assume there's a reason.

Buyer's Premium Hidden in Special Conditions

Where to find it: The Special Conditions of Sale, or the auction addendum. Sometimes also in the catalogue small print.

Beyond the purchase price, many auction houses charge a buyer's premium — typically 1.5–3.5% plus VAT of the purchase price. This is paid directly to the auctioneer, not the seller. Some auctioneers charge a flat administrative fee (£200–£1,200) instead. Some charge both.

What it costs you: On a £200,000 purchase with a 2.5% + VAT buyer's premium, that's £6,000 you weren't expecting. If it's also subject to SDLT, add another £180.

What to do: Before you set your maximum bid, check the specific lot's conditions for any buyer's premium, administration fee, or reservation fee. Add it to your cost model. PackCheck flags these automatically.

The Incomplete Pack — What's Missing Is the Message

Where to find it: By counting what should be there against what is there.

This is the most important red flag of all, and the hardest to spot if you don't know what a complete pack should contain. The Essential Information Group's own data shows that on average, the final legal pack is only fully assembled 24 hours before the auction.

What should be in a complete pack for a standard freehold residential property:

• Official Copy of Register of Title
• Title Plan
• Local Authority Search
• Drainage and Water Search
• Environmental Search
• TA6 Property Information Form
• TA10 Fixtures and Fittings Form
• Special Conditions of Sale
• EPC

A pack missing several of these documents isn't just incomplete. It's a question mark. Why isn't the tenancy agreement in there? Why are there no building regulations certificates despite obvious recent works?

What to do: Create a checklist of what should be in the pack (or use PackCheck's automated analysis), identify what's missing, and contact the seller's solicitor before auction day to request the outstanding documents. Their response — and the quality of what they provide — is itself information.