Legal Question in Real Estate Law in California
I am buying a house throught auction sale,the auction company is not allowing me to do inspections.They are saying I should have done inspections before I bid for the property.Please advise.This is a bank owned house and REDC is selling.
3 Answers from Attorneys
I assume in their auction booklet the give to the public and even maybe in their advertising for the sales, they state those rules. In taking part in the auction you have agreed to their rules. The rules are not against public policy or the law, so they can impose such rules. If you buy at a tax sale you have the same problem except there ar no inspection dates. All you can do is give them some song and dance as to why you did not go on the inspection date and how without an inspection how you will not be able to go through on the purchase [you have some potential investors but they need to see the inside before giving you the money to complete the transfer; if a local real estate agent has the key to get in see if they will let you in]. You could contact the Bank and see if they will tell the company to let you in or they will do it themselves, but I doubt they will help you out.
You don't get to inspect a property after you buy it at auction because you did not make a contingent offer. When you buy a property with a normal contract, you put in an inspection contingency. Auctions do not work that way. The inspection right is contractual, not legal. If it isn't in a contract with the seller, you don't have it. All you have a right to is the legal disclosures of the condition of the property. If you received them before you bought, you are stuck. If you received them after you bought you have three days to rescind or you are stuck, but in either case there is no inspection right unless you have a contract that says you have it.
It is a general principle of auction bidding, whether on eBay or for multimillion-dollar buildings, that you do your due-diligence (including physical inspections, appraisals, authentication, etc.) before you place your bid. In a real-estate auction, the seller warrants no more than that it has marketable title, subject to any disclosed title defects, that it has disclosed known physical, etc. defects, and that's about it. When the hammer falls, high bidder owns it, subject to the vendor's lien for the price bid.