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Auction - CAC Print
The Common Auction Conditions are designed for use in property auctions and are published by the RICS. They are some 20 pages long, written in plain English, and intended to be used by the general public. In general terms they are similar to the Standard Conditions of Sale and the Standard Commercial Property Conditions, but particular points to note are:
  • Licence from L: if a formal licence is needed then the contract is conditional. A three-month long-stop completion date is set, after which if the licence is not forthcoming either party may rescind. The SCS and SCPC have a four-month time limit.
  • Sale by practitioner: a ‘practitioner’ means a ‘receiver, administrative receiver, liquidator or a trustee in bankruptcy’. Since a practitioner will not generally have had any personal dealings with the property, CAC 19 requires the buyer to take the property as it is, with no warranties being given by the practitioner seller and no title guarantee included in the transfer deed. There are no equivalent conditions in the SCS or SCPC.
  • TUPE: the CAC 20 contains two alternative warranties depending upon whether Special Conditions state that TUPE applies or not (largely for use when property is transferred as a going concern). These are complex provisions. There are no equivalents under the SCS or SCPC.
  • Environmental: Condition 21 only applies if the Special Conditions say so, but it does impose an onerous liability to remediate land. The buyer should be wary of accepting this Condition since its conclusion may indicate that the land is subject to a potential liability under EPA 1990. The general indemnity that the buyer has to give under Condition 21.3 is open-ended and as such is undesirable from the buyer’s point of view.
  • Service charges: services charges are not apportioned on completion. Instead, the seller provides the buyer with a detailed statement of service charges within two months of completion, showing the expenditure attributable to each tenancy, the payments received from each T, the amounts due but unpaid, and details of any amounts that are irrecoverable. Apportionments are then made in respect of each separate tenancy. This is a relatively cumbersome and complicated method of dealing with service charges which provides no certainty over payment to either party. In practice, it is better to have a Special Condition dealing with apportionment on completion on a best estimate basis (as in SCS 6.3.5).
  • Insurance: under CAC 3, the buyer takes the risk in the property from the date of the contract and so must insure from that time (s47 LPA 1925 is excluded).

In general terms, the CAC are straightforward to use. There are some matters that are not dealt with by the SCS or the SCPC (eg warranties, TUPE). In some situations they are less detailed, and it should be noted that there are no specific conditions relating to chattels or fixtures and fittings (particularly important when dealing with tenanted property). There are also instances where the conditions are more onerous on the buyer than would be the case otherwise (eg environmental liabilities). Source: the excellent Standard Conditions of Sale by Frances Silverman (Jordans; £39).© Practical Lawyer

October 2008
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