Price representations; reserve price indications in relation to residential auction properties

Price representations and reserve price indications in relation to residential auction properties
The OFT has responded to the REIQ in writing as follows:

Sections 574B and 574D of the Property Agents and Motor Dealers Act 2000 (PAMDA) detail the obligations of auctioneers and real estate agents. The sections provide that if a property is to be offered for sale by auction, the auctioneer/real estate agent must not disclose to the potential buyer:

a) whether the seller has set a reserve price for the offered property;
b) the reserve price set for the offered property; or
c) an amount the auctioneer/real estate agent considers is a price likely to result in a
successful or acceptable bid for the offered property.

To advertise a price band prior to auction appears to conflict with subsection (c). Sections 574B and 574D apply only when the potential buyer asks an auctioneer/real estate agent for information about the price at which the property is likely to be sold. This requirement appears to limit the sections to circumstances where a potential buyer asks the agent for this information.

However, the explanatory notes accompanying the Property Agents and Motor Dealers and Other Acts Amendment Act 2006 reveal that these sections were intended to prohibit the disclosure of the reserve price, or price at which the seller is willing to sell the property to a potential buyer by auction or otherwise. It seems clear from those notes that this section was intended to prevent disclosure of information regarding the reserve price in all circumstances.

To prevent the need for OFT to consider whether enforcement action is warranted, auctioneers and real estate agents are encouraged to consider using price band representations to protect themselves from complaints only where the vendor has provided written authority and approved the proposed advertising.

If an agent has written authority from a vendor approving such advertising, OFT is unlikely to take any enforcement action.

Best regards,

Linda and Carlos Debello

http://www.ljgrealestate.com.au

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About ljgrealestate 据联大

Removing the Hassle from Sales and Rentals across South East Queensland. Aim to Empower other like minded Property Investors. L J Gilland Real Estate is a prestigious boutique agency specializing in Property Investment Management Services and the Sales of Investment Properties with tenants in place. Comprised of a top performing group of handpicked specialists, our Agents proudly serve Property Investors in Queensland. Since 1996 our Agency has demonstrated a genuine enjoyment of working with people, developing long-term relationships and delivering on the promise of great service. Carlos and Linda Debello offer property investor's the confidence to sell and lease in any market. We provide comprehensive market appraisals, exclusive multimedia marketing campaigns, and knowledgeable, highly personalized counsel on all aspects of real estate. Our Property Management Team is equally considerate, offering investors with in-depth advise, well-researched rental valuations, and highly professional rental management services. http://goanimate.com/movie/0M4bvcZzgIbI?utm_source=linkshare&uid=0u6RGtWsmlVc Carlos’ direct mobiles are 0400 833 800 & 0413560808. Linda’s mobiles are 0409995578 & 0414978700 (prefer email contact for Linda). Office 07 3263 6085. http://www.ljgrealestate.com.au http://www.yellowpages.com.au/qld/aspley/lj-gilland-real-estate-pty-ltd-14091356-listing.html http://au.linkedin.com/in/lindajanedebello http://twitter.com/GillandDebello http://www.facebook.com/pages/ljgrealestate
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