Auction Legislation

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The NSW auction legislation says the auctioneer's decision is final.
But on the weekend it was seemingly not the case when an auctioneer got muddled on his reserve price at a 9.15am Redfern auction.
The legislation also says the highest bidder is the purchaser, <a href="https://www.fairtrading.nsw.gov.au/ftw/Property_agents_and_managers/Rules_of_conduct/Real_estate_agents/Auction_conditions.page" target="_blank">subject to any reserve price</a>. 
As the Sunday Telegraph's auction coverage noted, the builders Sean Piper and Martin Allen were overjoyed when they snapped up the dilapidated three-bed terrace with peeling paint, squeaky floorboards, mouldy walls and outdoor dunny at <a href="https://www.realestate.com.au/property-terrace-nsw-redfern-125768162" target="_blank">Boronia Street</a> for $1.36 million.
“The property passed in because it didn’t reach reserve,” Cheryle Lanthois, of Carrington Real Estate, advised quickly after.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/07/17/Redfer1.jpg" alt="">
Jake Moore, of Cooley Auctions, had seemingly indicated the ­reserve had been reached in the auction's final minutes.
The <a href="https://www.news.com.au/national/nsw-act/renovators-delight-sells-for-136m-at-auction-except-its-not-sold/news-story/7e18fd7d602240e5511da3118bb0c039" target="_blank">Sunday Telegraph reporter</a> was onsite watching as bidding between three parties hit $1.35 million, with Mr Piper in the lead.
The auctioneer told the crowd and parties involved: “I assume my instructions are the same, we’re selling today.”
But there was a misunderstanding. And its seems the listing agent was oblivious to the impending slip-up.
Mr Piper’s main opponent offered another $5000, taking the bidding to $1.355 million.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/07/17/Redfern2.jpg" alt="">
When Mr Piper and Mr Allen matched that with ­another $5000, Mr Moore slammed down the gavel in their favour. 
“Sold!” the auctioneer announced.
But then the perplexed listing agent intervened. The house apparently had not been “sold” at all.
“I’m sorry, I’ve made a mistake. The written reserve was $1.4 million — I had it as $1.3 million. Come inside and we’ll negotiate with the vendor,” Mr Moore told the top bidders.
“We’re not negotiating — that’s it,” Mr Piper reportedly said.
Mr Moore: “I sold it under the written reserve — it’s my fault. It’s not the owner’s fault, it’s not Cheryl’s fault, it’s my fault.”
Ms Lanthois confirmed that the vendor wasn’t selling at $1.36 million, but holding out for $1.4 million.
The would-be buyers are now discussing the matter with their lawyers. 
Post-auction Cooley Auctions principal Damien Cooley said "the highest bidder is the purchaser, subject to the reserve price."
"In this situation, the property has been knocked down at a figure below the ­reserve price — it is not sold,” he said.
Sydney property lawyer Neil Matthews of Matthews Solicitors said Mr Cooley’s assessment is probably correct, though the legislation is “far from clear”.
It is not yet apparent what legal consequences will flow.
But being Sydney there could be consequences - or damages - arise if a $1.4 million sale doesn't eventuate.
According to his LinkedIn, Mr Moore has been at Cooley Auctioneers for three months, with his website profile indicating he has been in the industry for over five years as a agent.
It was at Thirroul on the NSW South Coast.
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Auction Legislation

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