Property Row Results In Agent Paying Reservation Fee

A property row has resulted in an agent paying a ‘non-returnable’ reservation fee to a client, who believed they’d bought a property at auction.

The Sunday Times reported that one of their readers believed they had made a successful bid of £83,000 for a property in Newport, South Wales at an online auction.

After successfully winning the auction, the client paid a £4,150 deposit and the £6,000 reservation fee.

However, disaster soon struck when they tried to visit the property and were unable to access it.

The client told the Sunday Times:

“My solicitor subsequently confirmed that the house had been repossessed… by the bank that had provided the mortgage for the previous owner.”

The client was then informed they’d only be able to proceed with the purchase if they paid the bank’s valuation of the property which stood at £100,000. However, the buyer could not afford the £17,000 increase on the property and had to pull out.

As a result of this the client only received £3,685, which covered the deposit with the legal fees subtracted.

With regards to the reservation fee, the £6,000 was retained by the agent Pattinson who had said from the outset the fee as non-returnable.

By taking this matter to the newspaper, they client said:

“I think it is highly unethical for an auctioneer to list properties under a repossession order without disclosing this to potential buyers.”

Upon hearing his case, the finance team at The Sunday Times, embarked on their journey to return the reservation fee to the client. They sought guidance from the Royal Institute of Chartered Surveyors (RICS).

The RICS guidance outlined that all relevant documents relating to a property should be available for inspection – online, at the agent’s and auctioneer’s office or at the seller’s solicitor.

The client admits to receiving a pack containing a draft contract, the property information form and other documents, and it all seemed above board. His solicitor raised no concerns.

Following the guidance received by RICS The Sunday Times financial team contacted Pattinson, who eventually refunded the client’s reservation fee, but was found to have done nothing wrong.

It is believed that Pattinson’s apologised for the saga.