Auction Bullying

by Peter Mericka B.A., LL.B Real Estate Lawyer and Qualified Practising Conveyancer Victoria Lawyers Real Estate

“Auction turns to scuffle” is the title of an article by David Nankervis of the Adelaide Sunday Mail (p.36).

The article describes how police were called to a house auction after a clash erupted between a bidder and the auctioneer. The bidder, Russell Mallory, was acting on behalf of his parents and wanted clear instructions as to how the purchaser was to be named in the contract. But while Mr Mallory was discussing the matter with his parents over the telephone, the auctioneer, Mr Richard Thwaites of LJ Hooker Kensington, decided that the property would be sold to the second highest bidder whose offer was $1,000 less.

The estate agent led the second purchasers into the house, and Mr Mallory attempted to enter the house as well.

“But the auctioneer closed the timber front door on my arm and leg, which caused a bit of pain, and when I pulled away he locked the door in my face,”

"Thwaites re-opened the bidding while I was on the phone with my parents, who said I could sign as the purchaser if that was what the auctioneer demanded."

According to the auctioneer, Mr Mallory could have signed the contract "and/or nominee".

"...he refused to sign and I said I would offer the property for sale."

“The new owners had the right to sign a contract in privacy and I was ensuring that they did.”

It has become commonplace for estate agents to exert control over all parties at an auction. In recent times we have seen situations where estate agents have used the auction as a means of bullying purchases into accepting unfair sale terms.

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