Why hidden costs exist in legal packs
Auction legal packs are prepared by the seller's solicitor. Their job is to protect the seller, not inform the buyer. Costs that would put off buyers if advertised upfront are instead buried in Special Conditions — often on page 80 of a 200-page document, written in dense legal language.
Auctioneers are not required to summarise or highlight these costs in the lot description. Once the hammer falls, they become legally binding obligations on the buyer. No exceptions.
When you bid at auction and win, you exchange contracts that moment. You cannot pull out, renegotiate, or claim you didn't know about costs in the legal pack. The pack was available — whether you read it or not.
The most common hidden costs
The single most common hidden cost. A Special Condition requires the buyer to pay the seller's solicitor fees on completion. The amount is often not disclosed anywhere in the lot description — only in the Special Conditions. It is mandatory and non-negotiable.
↳ Typically found in: Special Conditions · Clause 2 or 3Commercial properties and some mixed-use buildings are subject to VAT. If the seller has opted to tax the property, VAT at 20% applies on top of the purchase price. A £200,000 lot suddenly costs £240,000. This is disclosed in the legal pack but almost never in the lot description.
↳ Typically found in: Special Conditions · VAT clauseIf you fail to complete on the agreed date, daily interest accrues at 4–8% per annum on the purchase price. On a £300,000 property at 6%, that's roughly £50 per day. This is triggered automatically — there is no grace period unless the contract says otherwise.
↳ Typically found in: Common Auction Conditions G10.3 or Special ConditionsMissing building regulations, chancel repair liability, restrictive covenants, and planning discrepancies all require indemnity insurance policies — at the buyer's cost. These are often mentioned only in passing in the pack, with the buyer expected to obtain and pay for the policies.
↳ Typically found in: Special Conditions or Property Information FormMany auctioneers charge the buyer an administration fee (sometimes called a "buyer's premium") on top of the purchase price. This is disclosed in the auction catalogue but is often missed. It is separate from the deposit and due on the day.
↳ Typically found in: Auction catalogue or Special ConditionsA leasehold property with fewer than 80 years remaining is increasingly difficult to mortgage and will depreciate rapidly. Extending the lease costs money — and the shorter the lease, the more expensive the extension. This cost is entirely the buyer's responsibility and is never mentioned in lot descriptions.
↳ Typically found in: Lease · Schedule 1An overage clause requires the buyer to pay the seller a percentage of any future increase in value — typically if planning permission is obtained within a set period (often 10–25 years). This can represent tens of thousands of pounds and affects resaleability.
↳ Typically found in: Transfer Deed or Special ConditionsCosts that are your responsibility but often missed
Beyond direct costs in the legal pack, buyers frequently underestimate these additional obligations:
- Stamp Duty (SDLT) — due within 14 days of completion; additional 3% surcharge applies if you own other property
- Bridging finance costs — if you need bridging to meet the completion deadline, arrangement fees and monthly interest can be significant
- Unadopted road maintenance — if the access road is not adopted by the local authority, you as the new owner share responsibility for its upkeep
- Ground rent and service charges — leasehold properties often have substantial ongoing costs not clearly disclosed
- Structural defects — auction properties are sold as seen; no right to renegotiate if structural issues are found after auction
The only way to know what a legal pack actually costs you is to read every page before you bid. LegalPack AI does this in 3–4 minutes — identifying every confirmed cost, liability, and buyer obligation with exact clause references.
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Analyse Your Legal Pack →What counts as a legitimate cost vs a red flag?
Not everything in a legal pack is a problem. Some costs are standard and expected:
- Deposit of 10% on auction day — standard
- Completion within 20 working days — standard CAC terms
- Buyer responsible for insurance from exchange — standard
Red flags are clauses that deviate from standard in ways that disadvantage the buyer:
- Any clause requiring the buyer to pay the seller's costs
- Completion periods of fewer than 15 working days
- No title guarantee or limited title guarantee
- VAT on a residential property (unusual and worth querying)
- Overage provisions on land with development potential
Can you negotiate on hidden costs?
At auction — no. Once the hammer falls, the contract is fixed. Before the auction, you can technically submit a query to the seller's solicitor via the auctioneer, but sellers rarely amend Special Conditions, and any changes would need to be issued as a legal pack addendum to all bidders.
The practical answer is: read the pack before you bid, and factor all costs into your maximum bid price. If the hidden costs make the deal unworkable, don't bid.