Pre-auction Legal Checks
Insight
Buying at auction appeals to many buyers, but it offers fewer protections than private negotiation. When the hammer falls, you are unconditionally committed — with no right to cancel, no finance condition, and no further opportunity to review reports or seek advice. This makes pre-auction legal review essential.
Lawyers identify issues in the title, LIM, agreement and disclosure documents that could cost thousands later. They also explain what risks cannot be negotiated, what clauses favour the vendor, and whether anything in the documentation signals caution before bidding.
People usually seek advice a few days before the auction, but earlier review gives you the best chance to prepare, obtain finance approval and understand your obligations.
Why Pre-auction Review Matters
Tip:
If the agent is slow to provide documents, treat it as a red flag and escalate early. Delays often hide issues.
Auction agreements often contain vendor-friendly terms, limited warranties and clauses preventing post-auction negotiation. Because buyers cannot insert conditions, all due diligence must be completed beforehand. A lawyer highlights issues in the title, LIM, contract terms or building report that may affect value or risk.
They also explain vendor disclosure, confirm whether chattels are included, clarify settlement dates and check for suspicious clauses that transfer liability to the buyer.
Risks Unique to Auctions
Common pitfall:
Attending auction day planning to 'just see how it goes'. If you accidentally win the bid, you are fully committed.
Auctions remove buyer protections and require full commitment on the spot. If issues arise with finance, inspections or title defects after winning, you remain legally bound to settle. Buyers may lose the deposit or face legal action if unable to complete settlement.
Typical auction-specific risks include:
- no ability to renegotiate after reports
- no finance, LIM or building conditions
- no vendor warranties
- unconsented works discovered too late
- cross-lease or flats plan discrepancies
- unit-title levies or special levies
- title restrictions or consent notices
What Lawyers Check Before Auction
Before auction day, a lawyer reviews:
- the sale and purchase agreement
- title documents for encumbrances or easements
- LIM reports for hazards or unconsented works
- disclosure statements (for unit titles)
- building reports or disclosures
- settlement dates, deposit terms and chattel lists
- any clauses that limit liability or allow vendor variation
They also confirm whether anything should be negotiated before the auction or whether the property is too risky to bid on.
Costs For Pre-auction Legal Advice
Most firms offer fixed-fee pre-auction reviews covering the contract, title and LIM. Additional fees may apply if the property has cross-lease, unit-title or complex title issues. Buyers generally find this cost small compared to risks of bidding without review.
Find a Lawyer for Pre-auction Review
Explaining the address, auction date, type of property and documents received helps match you with lawyers who regularly review auction agreements. This ensures faster turnaround and more focused, practical advice.
Auction coming up?
Send us the property details to get matched with property lawyers who can review the auction documents in time.
Frequently Asked Questions
Why is pre-auction legal advice essential?
At auction, the agreement becomes unconditional the moment you win the bid. A lawyer checks the agreement, title, LIM and disclosure documents to identify issues you cannot back out of later. Many buyers face unexpected costs because they did not review the documents beforehand.
What documents should I send a lawyer before auction?
Send the draft sale and purchase agreement, title documents, LIM report (if provided), any building reports and the auction particulars. If the agent has not supplied them, request them immediately — they are essential for legal review.
Can I add conditions to an auction agreement?
Most auction agreements cannot be conditional. You must complete all due diligence beforehand. In some cases the vendor may agree to pre-auction variations, but this is rare and must be approved in writing before the auction begins.
What are the biggest risks when buying at auction?
Common risks include unconsented works, title defects, natural hazard notices, cross-lease or unit-title complications, boundary issues, weathertightness concerns and clauses in the agreement that shift cost or liability to the buyer.
What if my finance is not fully approved?
You should not bid unless finance is confirmed. At auction, there is no finance condition. If your lender declines after you win the auction, you remain legally bound and could face significant financial penalties.
You don’t need all the answers
Property issues can feel overwhelming — especially when you’re facing deadlines. Sharing a few details about your situation is enough for a lawyer to understand the context and guide you through the next steps.
Get Help With Pre-auction Legal Checks
Going to auction without proper legal review is risky. Providing the address, auction date and the agreement you have received helps match you with property lawyers who regularly review auction contracts and LIM/title documents.
By outlining any concerns — such as weathertightness, unconsented works or short timelines — you can connect with lawyers who understand how NZ auction agreements work.