"No reserve" auction proves costly for seller

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A Queensland real estate agent has been fined after a misleading ‘no reserve’ auction.  

John Barry Johnston, director, chief executive officer and chief auctioneer of Johnston Dixon Quality Property was hit with a $2,160 fine from the Queensland Office of Fair Trading (OFT) after the auction of his own property in Chelmer on 19 March breached Australian Consumer Law.

Prior to the auction, the property was advertised as having ‘no reserve’ and Mr Johnston announced it would sell that day.

However, the property was instead passed in at auction after bidding stalled, rather than being sold to the last bidder.

After the auction, Johnston then offered the property to the auction’s last bidder for a higher price than their bid. That offer was declined.

Johnston subsequently re-listed the property for an amount greater than the last bid on the auction day.

OFT investigated the auction and Johnston’s conduct after receiving a complaint from a member of the public.

OFT executive director Brian Bauer said Johnston had failed to act honestly and with transparency in his role as an agent and auctioneer.

“A home is the most significant purchase a consumer can make, and with the added pressure of a sale by auction, it is imperative agents maintain the trust of consumers by acting with fairness,” Bauer said.

“The conduct of Mr Johnston in advertising a ‘no reserve’ auction was clearly designed to increase interest and generate attendance at the auction, but he failed to follow through with that promise and sell to the highest bidder on auction day,” he said.

Bauer said the public has the right to expect agents and auctioneers would honour any claims they make and that OFT will continue to take action against those who don’t.

“Consumers have the right to expect that representations made by agents and auctioneers will be honoured, and Mr Johnston has fallen short of that mark.

“Enforcement action will continue to be taken against agents or auctioneers who don’t meet their legal obligations.”

Anyone who believes the conduct of an auctioneer or agent has breached standards of honesty or integrity is encouraged to lodge a complaint with the OFT and provide as much evidence as possible of any alleged breaches of the law.

Further information on the rights and responsibilities of agents in the property industry is available from www.qld.gov.au/fairtrading.

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