Buying a Property

GreenGrass2019

Two questions regarding the purchase of property:

1. When you're part owner of a property and own a certain percentage and want to buyout the other co-owners of their percentage, can you do this anonymously via a solicitor? in a Private Treaty scenario / the owners are tenants-in-common, all owning equal shares of the property (the reason for wanting to remain anonymous is due to the other co-owners being siblings and relations have completed closed down)
2. If the property goes to auction, I can see from the Land & Conveyancing Law you cannot bid on your own property, but as per the scenario outlined above where one co-owner wants to buy out the remaining, can a solicitor bid 'in trust' for their client at the auction to secure the purchase?

TIA

endofrainbow

I don't know the answer but would the other co-owners be happy with an unknown party buying 2/3rd's knowing that 1/3 was not being sold? It would appear obvious that it was, in fact, the remaining co-owner (just using these percentages as an example).

AnRothar

Wondering if this is an "inheritance" situation?

If so it's the executor job to achieve the best price for all.

In theory the executor would be open to an offer by one of the possible "beneficiaries" .

If it's a scenario where you as part of a group decided to purchase a property together then it should depend on what (if anything) was agreed before the purchase was made.

I feel a solicitor is your best source for guidance especially if it The latter scenario.

Peregrinus

There is nothing to stop you making an anonymous offer, via an intermediary, to your co-owners to get them to sell their shares to you. But there is nothing to compel them to accept, or even to entertain, that offer, and they would probably be very suspicious of it. And they'd probably have a pretty shrewd idea of who was behind it.

If the property goes to auction, yes, you can bid for the whole, even though you're a part-owner. So can the other part-owners. And of course it won't go to auction unless all the owners agree (or unless there is litigation, and a court orders it).

GreenGrass2019

https://www.boards.ie/discussion/comment/118748938#Comment_118748938

Thanks for the clarification on the Auction scenario.

With respect to an anonymous offer, would it not come clear the identity of the co-owner, when it goes to contracts and the payment that will be transacted is finalised, or would it be the case that the other co-owners would only find out when only their portion comes through to their solicitor?

Peregrinus

There is nothing to stop a solicitor acting as agent for an undisclosed principal from completing the purchase without disclosing who his principal is. In theory he could complete the purchase in his own name, and later on transfer the property to his principal. However it would be very unusual and, even if the co-owners were willing to sell in these circumstances, it's unthinkable that they wouldn't work out who the buyer was.

Suppose there are three co-owners; A, B and C. A instructs a solicitor to make offers to B and C for their shares in the property so that A can acquire the whole property. But A probably doesn't want to end up in a situation where he has to buy B's share, while C is unwilling to sell; he'd spend a lot of money, and still end up not owning the property. So B will be told that an offer is also being made to C and that B cannot accept their offer unless C also accepts the offer made to C, and vice versa; neither offer can be accepted unless both are accepted. And B and C, when they get these offers, will know immediately that A must be behind them, since there will be no representation that an offer has been made to A, and the offers made to B and C will not be conditional on any offer to A being accepted. Who in the world would want to buy the shares of B and C without also buying the share of A? There's only one person who would want to do that: A.

GreenGrass2019

https://www.boards.ie/discussion/comment/118749036#Comment_118749036

All co-owners have equal shares, so will be entitled to equal returns, percentage of total sale price, if A as you put it places an offer anonymously and it is accepted, will it be disclosed at the closing of contracts that the money to be transferred will be B & C's portion or will this only be visible when the sale is finalised and gone through?

Peregrinus

https://www.boards.ie/discussion/comment/118749049#Comment_118749049

Suppose A, anonymously, through an agent, makes a single offer to A, B and C jointly. B and C may suspect that A is behind the offer, if they know or suspect that he wants to buy the property; why would an arm's length offer from a stranger be made anonymously? That would be very unusual and I think (if they didn't assume it was A) would attract a degree of suspicion/worry about money-laundering/fraud/sanctions-busting or the like. So I think the possibility is a bit fanciful. But let's run with it.

As long as A, B and C are all willing to accept an anonymous offer, I don't see anything that would stop them from accepting it. A will have to be separately advised by a lawyer in relation to the sale; he cannot jointly instruct a solicitor with B and C and conceal from his solicitor that he is the purchaser. He can instruct a solicitor to act for him in the sale, tell the solicitor that he is the purchaser and also tell him that this is not to be disclosed to B or C (or, indeed, anyone). He'll have to instruct a different solicitor to act for him as purchaser.

At the completion purchaser's solicitor hands over the full amount of the purchase price, one-third of which is paid to A, so A gets back one-third of the money he puts up to make the purchase. The property is transferred to purchaser's solicitor as nominee for the undisclosed purchaser, so B and C still (theoretically) do not know who the purchaser is.

But this may be more elaborate than is strictly necessary. Once there is a binding unconditional contract between A, B and C as sellers and a nominee as buyer, A can reveal that he is the true buyer. B and C are bound by the contract they have signed and must complete the sale. If the contract is well-drafted B and C will not be able to repudiate it merely because they do not like the identity of the true purchaser.

I just find it hard to imagine any realistic scenario in which B and C would not assume from the outset that the anonymous purchaser was A. That is the most obvious explanation for why the purchaser would want to be anonymous.

GreenGrass2019

https://www.boards.ie/discussion/comment/118749083#Comment_118749083

Thank you ... that's all very interesting and taken onboard, so the case is once contracts are signed and there is 'no get out of jail' (so to speak) clause for B&C, the sale will go ahead and ultimately at that point the balance of what is due, ie: 2/3rds can be transferred to finalise the transaction.

I understand what you're saying that yes B & C could be suspicious that A has made the anonymous offer, however they're going to have no way of knowing for sure, I have heard of many other situations like this where the seller due to basically personal resentment or pettiness didn't want to sell to another party and to get around this a solicitor 'in trust' has acted on the purchasers behalf and the sellers only find out the identity after the purchase has all been finalised and closed.

Claw Hammer

https://www.boards.ie/discussion/comment/118748938#Comment_118748938

Nothing to stop the o/p bidding at auction except this!

PROPERTY SERVICES (REGULATION) ACT 2011

58.— (1) Subject to subsection (2), where land is offered for sale by auction, the vendor shall not—

(a) bid at the auction, or

(b) procure, authorise or permit any person to bid on the vendor’s behalf.

GreenGrass2019

https://www.boards.ie/discussion/comment/118759281#Comment_118759281

Yes that is the part of statute I was referring to.

Peregrinus

https://www.boards.ie/discussion/comment/118759281#Comment_118759281

The vendor at the auction would be the three co-owners jointly. A single co-owner bidding to acquire sole ownership of the property would not be "the vendor".

Claw Hammer

https://www.boards.ie/discussion/comment/118760648#Comment_118760648

The three jointly are the vendor. Any one of the co-owners are bidding for their own property.

ohnonotgmail

https://www.boards.ie/discussion/comment/118761746#Comment_118761746

exactly, the three jointly are the vendor. any one of the three on their own is a separate legal entity to the three.

Claw Hammer

https://www.boards.ie/discussion/comment/118761773#Comment_118761773

They are the same legal entity. Same way as a club member can't sue the club.

GreenGrass2019

https://www.boards.ie/discussion/comment/118761961#Comment_118761961

Can one of the co-owners use a solicitor 'in trust' to bid at the auction to secure the buyout of the other co-owners?

Claw Hammer

https://www.boards.ie/discussion/comment/118762578#Comment_118762578

Using a solicitor "in trust" is still buying from oneself. The thing to do would be sale by tender which avoids the rules about bidding at auction.

Another option would be to appoint an arbitrator (by agreement) to determine the market value and the continuing co-owner would then have the option of buying out the 2/3 interest held by the others.

In the absence of agreement a court ordered sale would be necessary.

GreenGrass2019

https://www.boards.ie/discussion/comment/118762986#Comment_118762986

Thank you, this is very informative, my thought has always been to divert the sale from an 'auction' to allow one co-owner to buy-out the others by private treaty.

Thank you for the advice on the arbitrator.