Suing someone with no assets

[Blancko]

This is on behalf of my parents really.

My parents have been wanting to sell a part of their farm for a while to help their kids/grandkids out. After researching it was agreed it would be be best to use an auction house.

Last week the property went to auction and was “sold”. But the “purchasers” are now backing out due to a number of reasons. Think they only found out after the auction the plot is greenbelt.

it has come out the person who made the bid has no job and no assets.

Parents wanting to pursue a claim as it is all a major inconvenience. Its a bit pointless for them imo.

Any thoughts?

I'm really struggling g to understand why you / Dad don't see this. If they didn't ever have the money to buy (regardless of the legal / moral questions) how are they going to get the money to settle / pay a judgement etc??? It's pretty clear cut this is totally pointless!

I am surprised that they were allowed to bid at auction without their source of funding being checked by the auctioneer.

As well as showing proof of funds when I bid at an online auction recently I also had to authorise a pending payment on my debit card.

We bought land on greenbelt. It was specified in the brochure and the estate agent also made this fact clear to us. This considerably reduced interest from other prospective buyers.

That this information wasn't included by the auction house is very surprising.
Did the auction house or your parents have a discussion about leaving this important detail out?
If it was the auction house who decided or advised to not include this detail, I would be asking them to re -auction the land at no further expense to your parents.
The people who's bid was accepted didn't pay a deposit so there is no money to withhold on them. My understanding is that if someone pulls out after contracts are signed that really you can only go after the difference from their bid and what you then ended up selling the land for.
But thats pointless as they have no money / assets and your parents will waste time, energy and money in additional legal fees. If your dad is angry now, adding the stress involved in going down that route, would not be advised.

How do you know that?

Nailed it.

Surely the fact it was green belt should have been in the auction details. Back to auction house here as either them or your parents been misleading..

Courts aren’t the place for ‘the principle of it’.

Your parents would be better off burning £50 notes than embarking on this.

He's hoping for a decent figure from nothing? Well good luck with that I guess. Where does he think this decent figure will materialize from out of no assets exactly?

Maybe they’ll sue him back for not providing full details of what the property entailed

The biggest question is - did this purchaser attend the auction with their Solicitor?

Not in person and not with lawyer.

Agree. It was your parents that were the dodgy ones here, and now probably pissed off they didn't get away with it

Principles can end up costing a hell of a lot of money

It doesn't matter if your df files suit and wins a judgment, if they have no assets they won't pay and if he tries to collect they can just declare bankruptcy. There is absolutely nothing to be gained, and much money to be lost paying legal fees, by filing against someone who is judgment proof.

Sounds like stalemate to me

I would be really surprised if the auction house does no checks at all.

If they backed out because they wanted to develop the land, they clearly have something. Cash or assets.

It sounds like they do have something but their lawyers compelling case may be strictly true, but not the whole truth.

Since the deposit has to be paid the same day, how did this even happen? They had the money and an hour later they didn’t?

Green belt, as far as I have seen, is usually advertised as exactly that.

Is this a reputable auction house? It doesn’t sound like it.

The buyers are arseholes for messing your parents around.

But starting legal proceedings on a principle is a recipe for disaster.

But if the buyers are paying a solicitor to write letters they are have some money spare. Suggest an offer letter be sent saying that your parents would accept a nominal figure to settle in compensation - how much might depend on the purchase price. £1K?

If the parties can agree on a number it might help them both move on.

What’s the material loss for your parents to date, i.e. how much does it cost to relist for auction? I’d assume that that would be quite negligible in comparison to the cost of fruitless legal proceedings, although I could well be wrong

Pointless to go after the bidder. I would be looking to the auction house for compensation of their fees or a free re-sale as it is really unacceptable that they didn't do pre-sale checks on registered bidders. However, the seller has contributed to the problem by not disclosing the green belt so that would go against them.

Bringing principles into property and land law always goes well!

@OrangeMarmaladeOnToast - it always goes really well for the solicitor anyway!

😂

You are conflating several issues @Blancko .

First there was a contract (fall of the hammer) and there has been breach (failure to pay the deposit/fees now, and in due course failure to complete). Depending on terms it is likely to be true buyers are warned to do their own DD (generally caveat emptor under English law).

As such your parents could sue for breach of contract. The measure would be damages- what have they lost- almost certainly the deposit and possibly the full price plus fees if the auction house force them to pay.

Mental health is not a defence.

However, suing someone who can’t pay and has no assets against which to enforce is the very definition of idiocy. You’re parents will run up costs which they probably won’t recover. Best to cut losses and move on.

@Bookworm1111 @Winederlust I completely disagree. The listing was making it clear that anyone thinking of purchasing for development should make checks first.

It's not up to the seller to determine if development is possible or not. Green belt land is being released all the time for development. Councils are under so much pressure from the government to build new housing that simply being green belt no longer absolutely precludes development.

The listing made it very clear. If a purchaser was thinking of developing then do checks first. No withholding anything.

Suing anyone is generally very difficult even if they are wealthy and you are right.
You may technically win, but at what cost (financial/stress). When people start talking about the “principle” of things they’re not always acting rationally.

Whatever hopes your Dad has, the reality is that whatever a Court decided money isn't going to be forthcoming.

And legal action will be costly to your Dad, so he'll lose more money and get zero back.

Principles are great, especially on toast.