"Sold" to the Highest Bidder
The Real Estate Institute of Victoria has announced that changes made to the law governing auctions last year has helped improve the conduct of auctions by ensuring that successful bidders are protected from being gazumped by a late bid.
This announcement was followed by several recommendations to auction goers to ensure that they make their bids in a clear and audible manner and stand where the auctioneer can clearly see them, as once the auctioneer indicates that the property has been sold, they are unable to reopen the bidding. The new rules prohibit the auctioneer from accepting bids or offers after the property has been knocked down to the highest bidder.
The new rules require that auctioneers display an Auction Information Sheet at least thirty minutes prior to the start of the auction. The Auction Information Sheet sets out the rules of the auction such as:
- Where there are two or more owners of the property, one or some or all of them may bid to purchase the property from another owner. They may make these bids themselves or through a representative but they cannot make these bids through the auctioneer.
- The auctioneer may only make a bid for a vendor if they:
- declare before the start of the auction that they will be making bids on behalf of the vendor; and
- when making the bid during the auction the auctioneer must state that it is a bid for the vendors.
- A person at a public auction has the right to ask the auctioneer “in good faith” a “reasonable” number of questions about the property being sold including the contract for sale, the rules of the auction and the conduct of the auction.
- At any time during the auction, a person at the auction may ask the auctioneer to indicate who made a bid and the auctioneer is required by law to comply with this request before taking another bid.
There are also a number of activities that are now forbidden activities at auctions including:
- Any person bidding for a vendor other than the auctioneer or a representative of the vendor where the property is owned by more than one person.
- The auctioneer must not take any bid which they know was made on behalf of the vendor, other than in a situation where the vendor or their representative make a bid where the property is owned by more than one person.
- The auctioneer acknowledging a bid if no bid was made.
- Any person asking the auctioneer to bid on behalf of the vendor.
- Any person falsely claiming or falsely acknowledging that he or she made a bid.
- An intending bidder harassing or interfering with other bidders at a public auction on land.
If you are attending an auction and intend to bid it is important to be aware that once the auctioneer says “Sold” no further offers can be accepted. This is in accordance with the new auction rules that will be displayed at the auction.
