Disclose your interests as an auctioneer or chattel auctioneer

Meaning of beneficial interest

As a licensee, you can have a beneficial interest in the purchase of a property (including an option to purchase the property) if the buyer:

• is yourself
• is an associate of yours, such as a family member
• is someone acting for either you or your associate
• is a member of a corporation of which you or your associate is also a member
• is a person carrying on a business for profit or gain, and you or your associate have a direct or indirect right to the income or profits of the buyer’s business or the purchase of the property.

If the purchase is made for (or the option to purchase property is held by) a corporation, you can have a beneficial interest in the purchase if:

• the corporation has 100 members or less and you or your associate is a member of the corporation
• you or your associate is an executive officer of the corporation.

If the purchase is made for (or the option to purchase property is held by) a corporation that is a licensee can have a beneficial interest in the purchase if it is made for an executive officer or their associate.

Property can include residential property or goods. Residential property is real property that is used, or is intended to be used, for residential purposes. Goods are personal property that is tangible property. This can include livestock and used motor vehicles.

As a chattel auctioneer, you can enter into a beneficial interest sale, as long as:

• you do not obtain an option to purchase the goods from the client
• you do not obtain an option to purchase the goods
• before the contract for the sale is entered into, you and the client complete the beneficial interest notice form advising the client of your interest and confirming they consent to you obtaining that interest
• you act fairly and honestly in relation to the sale
• you do not charge any commission or other reward for the sale
• the client is no worse off than they would have been if the goods were sold at fair market value.

If you do not obtain the acknowledgement in the prescribed form and you know, or ought to know, that an associate of yours intends bidding at the auction, you must, immediately before the auction:

• identify the associate to those present at the auction
  and
• announce to those present at the auction that the person is an associate of yours and their intention is to bid.

Disclosure of beneficial interest to seller (by a chattel auctioneer) form

Livestock auctions

The same rules apply to a livestock sale unless you obtain a written acknowledgement from your clients that they:

• are aware that you are interested in obtaining a beneficial interest in the livestock
  and
• consent to you obtaining a beneficial interest.

You do not need to use the prescribed form as required for all other types of auctions, only a written acknowledgement of the two rules above.

Options

If you have beneficial interest in goods, you must not obtain an option to purchase the goods from the client.

You must not sell goods if you obtain a beneficial interest in an option to purchase the goods.

Commissions

If a court finds that you committed an offence relating to beneficial interest, you may:

• have to repay the client the amount of commission
• be convicted of an offence
• receive a fine or go to jail.