Macmillan Building and Surveying Series

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1 Macmillan Building and Surveying Series Accounting and Finance for Building and Surveying A. R. jennings Advanced Building Measurement, second edition lvor H. Seeley Advanced Valuation Diane Butler and David Richmond Applied Valuation, second edition Diane Butler Asset Valuation Michael Rayner Auctioning Real Property R. M. Courtenay Lord Building Economics, fourth edition lvor H. Seeley Building Maintenance, second edition lvor H. Seeley Building Maintenance Technology Lee How Son and George C. S. Yuen Building Procurement second edition Alan E. Turner Building Project Appraisal Keith Hutchinson Building Quantities Explained, fifth edition lvor H. Seeley Building Services George Hassan Building Surveys, Reports and Dilapidations lvor H. Seeley Building Technology, fifth edition lvor H. Seeley Civil Engineering Contract Administration and Control, second edition lvor H. Seeley Civil Engineering Quantities, fifth edition lvor H. Seeley Commercial Lease Renewals- A Practical Guide Philip Freedman and Eric F. Shapiro Computers and Quantity Surveyors A. J. Smith Conflicts in Construction: Avoiding, Managing, Resolving jeff Whitfield Constructability in Building and Engineering Projects Alan Griffith and A. C. Sidwell Construction Contract Claims Reg Thomas Construction Economics: An Introduction Stephen L. Gruneberg Construction Law Michael F. James Construction Marketing- Strategies for Success Richard Pettinger Construction Planning, Programming and Control Brian Cooke and Peter Williams Contract Planning Case Studies B. Cooke Cost Estimation of Structures in Commercial Buildings Surinder Singh Design-Build Explained David E. L. Janssens Economics and Construction Andrew J. Cooke Environmental Management in Construction Alan Griffith Environmental Science in Building, fourth edition R. McMullan Estimating, Tendering and Bidding for Construction A. J. Smith European Construction: Procedures and Techniques B. Cooke and G. Walker Facilities Management, second edition Alan Park Greener Buildings: Environmental Impact of Property Stuart Johnson Housing Management: Changing Practice Christine Davies (editor) Information and Technology Applications in Commercial Property Rosemary Feenan and Tim Dixon (editors) Introduction to Building Services, second edition E. F. Curd and C. A. Howard Introduction to Valuation, third edition David Richmond Marketi'1g and Property People Owen Bevan List continued overleaf

2 List continued from previous page Measurement of Building Services George P. Murray 1980 )CT Standard Form of Building Contract, third edition R. F. Fellows Principles of Property Investment and Pricing, second edition W. D. Fraser Project Management and Control David Day Property Development: Appraisal and Finance David Isaac Property Finance David Isaac Property Investment David Isaac Property Management: a Customer-Focused Approach Gordon Edington Property Valuation Techniques David Isaac and Terry Steley Public Works Engineering lvor H. Seeley Quality Assurance in Building Alan Griffith Quantity Surveying Practice, second edition lvor H. Seeley Real Estate in Corporate Strategy Marion Weatherhead Recreation Planning and Development Neil Ravenscroft Resource Management for Construction M. R. Canter Small Building Works Management Alan Griffith Social Housing Management Martyn Pearl Structural Detailing, second edition P. Newton Sub-Contracting under the JCT Standard Forms of Building Contract Jennie Price Urban Land Economics and Public Policy, fifth edition P. N. Balchin, G. H. Bull and J.L. Kieve Value Management in Construction B. Norton and W. McElligott Macmillan Building and Surveying Series Series Standing Order ISBN hardcover ISBN paperback (outside North America only) You can receive future titles in this series as they are published by placing a standing order. Please contact your bookseller or, in the case of difficulty, write to us at the address below with your name and address, the title of the series and the ISBN quoted above. Customer Services Department, Macmillan Distribution ltd Houndmills, Basingstoke, Hampshire RG21 6XS, England

3 Auctioning Real Property Richard M. Courtenay Lord ~ MACMillAN

4 Richard M. Courtenay Lord All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London W1 P 9HE. Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The author has asserted his right to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act First published 1998 by MACMILLAN PRESS LTD Houndmills, Basingstoke, Hampshire RG21 6XS and l ondon Companies and representatives throughout the world ISBN ISBN (ebook) DOI / A catalogue record for this book is available from the British Library. This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources

5 Contents Preface 1 Introduction 2 The Property and the Vendor Client An overview of real property auctions today Selecting suitable real properties for auction Understanding your client's requirements Advantages of an auction Disadvantages of an auction 3 The Initial Steps The instructions Market research and the market place The initial inspection The initial discussion The report The auctioneer's terms of engagement 4 The Law Statute law The Auctioneers Act 1845 The Sale of Land by Auction Act 1867 The Auctions (Bidding Agreements) Act 1927 The Misrepresentation Act 1967 The Theft Act 1968 The Auctions (Bidding Agreements) Act 1969 The Unfair Contract Terms Act 1977 The Sale of Goods Act 1979 The Estate Agents Act 1979 The Landlord and Tenant Act 1987 and the Housing Act 1996 The Property Misdescriptions Act 1991 Money Laundering Regulations 1993 Unfair Terms in Consumer Contracts Regulations 1994 Case law 5 The File and Particulars The auction file The auction date and attendance by solicitors The auction particulars Disclaimer clauses v ix

6 vi Contents Types of auction particulars Auction Action Sheet 6 Ty11es of Auction The individual auction - Single lot sales Collective auctions Lotting of property for sale Order of sale London and regional centres Private auctions 7 Marketing Auctions The background Advertising in the press and journals Editorials in the press and journals Media contact list Television and radio Mailing lists and personal contacts For Sale boards and posters Catalogues/ Auction particulars Advertising 8 Events Prior to the Auction The timescale Matters occurring during this period The Price Guide Updated Press Releases The Addendum 9 Setting the Reserve Factors to take into account when advising on the Reserve Timescale for fixing and recording the Reserve Extraneous factors relating to the Reserve Recording the Reserve Types of reserve price The statute law relating to reserve price 111 The Auctioneer 's Colle of Conduct The authority to act as the auctioneer for a client The nature of the instructions The Conditions of Sale and Memorandum Misdescription and misrepresentation Non-disclosure Puffing g

7 Contents vii Fictitious bids 95 Right to withdraw lots and to sell privately before the auction date 95 Right to amalgamate lots 96 The order of sale 97 Price Guides 97 Handling of sold lots 97 Bidding on behalf of potential buyers 98 Sale and purchase on behalf of interested parties 98 Handling of unsold lots Preparations for the Sale Day 100 The auction particulars 100 The pre-auction sale inspection 101 The General and Special Conditions of Sale 102 The Memorandum 102 The Searches and Enquiries 102 The Addendum 102 The Reserve Price 103 The sale venue 103 The solicitors 104 The auction case 104 The auctioneer's rostrum notes 105 The Auction Book 106 The Clerk 107 Auction seminars and information packs for buyers Bidding for Buyers 110 Appointment of an agent to bid 110 Appointment of the auction house to bid Ill Relationship between the agent and the auctioneer Ill Bidding at the auction for the client 112 Relationship between vendor and auctioneer where bids are on the book 113 Implementing proxy bids 114 Typical Proxy Bid Authorisation form 115 Telephone Proxy Bidding form 116 Proxy Bid Authorisation The Auction 118 The auctioneer 119 The auction case 120 The auction clerk 120 Spotters or runners 121 The auction sale 122 Questions from the floor 123

8 viii Contents The bidding How people bid and identifying them The bidding pattern and its regulation Concluding the bidding The authority of the auctioneer in the room Disputed bids The right to refuse bids Withdrawn lots 14 After the Auction The contracts Deposit cheques Cash deposits Insurance Value Added Tax Unsold lots Subsequent events Auctioneer's commission and expenses Post Auction Press Releases 15 Moving Forward The background Recent technological and information innovations The landed professions Looking forward Appendix A Guidance Notes for Auctioneers Appendiices B-E Extracts from Statute Law References and Further Reading Index

9 Preface A colleague, when hearing that I had been invited to write this book, commented 'It is one thing to be an auctioneer and quite another to write about it. ' How very true! The task has proved to be daunting, but I trust that I have faithfully attempted to record the 'best practice' of property auctioneers and, at the same time, not to have shied away from those contentious areas of our work. As one who gained my rostrum skill in the time honoured way through acting as an auctioneer's clerk and understudy to the senior partners in my practice, I am the first to recognise that there is no substitute for 'hands-on' experience coupled with kindly guidance. Quite how our landed profession will ensure the education and training of future generations of auctioneers remains to be seen, but on the face of it this is an area which has largely been overlooked. Potential auctioneers are only able to gain a limited level of understanding and ability from diligent study of the subject, but in order to progress beyond that stage they require careful training, tuition and confidence building before conducting their first auction. The book concentrates on the practical aspects of property auctioneering, and it is intended for students and those working in estate agency who are keen to gain an insight into the workings of this method of the transfer of property. In writing it I have drawn together all the threads of knowledge that have been passed down to me, together with my own experiences over 30 years on the rostrum, plus the considerable assistance and support of fellow auctioneers across the country. I have always believed that part of the benefit ofbelonging to a profession is the sharing of accumulated knowledge. In some small way I hope that this book is my remittance for the thoroughly enjoyable and satisfying working life which I have been privileged to enjoy as an auctioneer. I trust that others will be encouraged to follow! As I mentioned, many have contributed in a variety of ways to this book. Owen Bevan of The College of Estate Management was the instigator, as he planted the idea in my mind, which in turn led to the late Professor Ivor Seeley who acted as my mentor, initial reader and guide. Malcolm Stewart at Macmillan coped with me as an unorthodox and inexperienced author and, no doubt at times, despaired of the book being completed. Those who read the draft copies and made so many valuable criticisms and suggestions include Richard Auterac of Jones Lang Wootton, Simon Riggall of Conrad Ritblat, Duncan Moir and Gary Murphy of Allsop & Co. and Charles Smailes of Feather Smailes & Scales. To those and many others I am indebted for their support and wisdom in drawing the book into its final form; without them it would never have gone beyond the initial draft! ix

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