What’s the catch?
17 June 2025Jun 2025 – In July 2003, Allsop auction, Lot 34, Mr X bought a shop investment 52/54 High Street, Hucknall, Nottinghamshire. An attractive prominent building let to Boots at £28,250 pa, he paid £610,000. The seller, Golfrate, had served notice for the March 2003 review proposing £43,000 pax.
Something I advise landlords when buying at auction is to ask “who’s selling, and why?” Inexperience doesn’t think the answers matter, so carry on regardless. But those of us who know what we’re talking about, know there’s a catch when the seller is an experienced professional landlord. To the question, “what’s the catch?” the answer is “you are.” Anyhow, I wasn’t consulted by Mr X beforehand, so what transpired was his own fault.
The wording for the rent review was unclear and ambiguous. Boots were adamant an upward/downward review. Mr X, presented with Boots’s offer of £20,000 pax and refund the overpayment, instructed his solicitors to advise. The solicitors recommended my services. To avoid litigation and costs, Boots Calderbanked at £22,500 pax. To cut a long story, I persuaded Boots to agree no reduction in the rent, so nil increase. Mr X refused to sign the Memorandum. Also, he did not pay my fee so I issued proceedings in the small claims court. To my suprise, Mr X defended the claim. We agreed to go to mediation but the court couldn’t find a mediator. I needed to amend the claim. I contacted the court office and was told to write a letter. The court rejected my letter, saying it wasn’t an application, so reluctantly I paid some more costs for the application. After that nothing; the court had mislaid the papers. I gave up. Fortunately, the number of bad debts I have endured over the years are very few.
In February 2024, Lot 39, Allsop again auctioned the freehold. In April 2023, Boots had renewed for 5 years at £24,500 pa (lower than before), with TB in 2026. The reported sale price was £290,000. In June 2025, Allsop auction again, Lot 58, the reported sale price £322,000.
In the 21 years Mr X owned the freehold, the rent, excluding costs and any other non-recoverable expenses, had just about covered the purchase price. Getting out for £290,000 before costs a bonus. Why the property was resold this month I can only guess at something to do with Boots break right next year.
In July 2003, Allsop and the seller both warned prospective investors to think twice about bidding. By clearly stating at the top of the auction catalogue lot page “On Instructions of Golfrate”. That’s the thing about the inexperienced, they don’t understand the significance.
Return to Import