Auctions of land or livestock must be conducted in accordance with certain conditions which are set out in the Property, Stock and Business Agents Regulation 2003.
The following conditions apply:
Bidding by a co-owner or executor must be identified in the auction conditions.
The following conditions apply:
(a) if that amount can reasonably be determined immediately after the fall of the hammer-before the close of the next business day following the auction or
(b) if that amount cannot reasonably be determined immediately after the fall of the hammer-before the close of the next business day following determination of that amount, unless some other time for payment is specified in a written agreement between the purchaser and the agent or the purchaser and the vendor made before the fall of the hammer.
The auction conditions must be clearly and legibly written or printed in English on a notice exhibited in a conspicuous position so that they may be inspected before and during the auction.
It is important for agents to ensure that they fully comply with the requirements.
There must be sufficient notices available to allow all persons attending the auction to read the notice of conditions.
The notice must be displayed in the area where the auction is being conducted. For example, if an on-site auction is being conducted in front of a house, it is not sufficient to display the conditions only inside the house.
NSW Fair Trading inspectors can issue on-the-spot penalties for failure to correctly display the auction conditions.
An auction may involve the sale of multiple lots, with some lots subject to different conditions. This may occur, for example, where rural properties and livestock are being auctioned as separate lots.
In these circumstances, both sets of conditions may be displayed.
Alternatively, the conditions applicable to the majority of the lots on offer can be displayed. Before auctioning a lot to which different conditions apply, the auctioneer must announce the differences clearly and precisely.
The legislation requires that notice be given about certain other requirements in relation to auctions:
As with the auction conditions, these notices must be written clearly in English and displayed in a conspicuous position where they may be viewed before and during the auction by any person in attendance.
These notices can be separate, or may be combined with the notice of auction conditions. The required wording of these notices is set out below.
Penalty for collusive practices
It is an offence against the Property, Stock and Business Agents Act 2002 for a person to do any of the following as a result of a collusive practice, or to induce or attempt to induce another person by a collusive practice to do any of the following:
(a) to abstain from bidding or
(b) to bid to a limited extent only or
(c) to do any other act or thing that might prevent free and open competition.
Severe penalties may be imposed on persons convicted of collusive practices.
Penalty for dummy bidding
It is an offence against the Property, Stock and Business Agents Act 2002 for a person to do any of the following:
(a) make a bid as the seller,
(b) make a bid on behalf of the seller (unless the person is the auctioneer),
(c) procure another person to make a bid on behalf of the seller.
Any bid made with the dominant purpose of benefiting the seller constitutes a bid made on behalf of the seller.
A bid may be found to be a bid made on behalf of the seller even though the seller did not:
(a) request the bid, or
(b) have any knowledge of the bid.
Severe penalties may be imposed on persons convicted of dummy bidding.
The actual successful bidder at an auction sale must give to the auctioneer or an employee of the auctioneer:
(a) the bidder’s name or
(b) the name of the person on whose behalf the successful bid was made.