Unethical Auctioneering?

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Sadmak

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Un-ethical Auctioneering?

Recently my dad attended an auction bidding for some land that was for sale beside our house. It started at €90k and soon after he was bidding against one other unknown party that were represented by a local solicitors firm.

Eventually he had to withdraw as the bid was exceeding €170k.

We have since found out that the solicitor was bidding on behalf of the auctioneer who handled the auction.
This is probably legal but does it contravene any ethical code?
The auctioneer is a member of the IAVI.

Any thoughts appreciated
 
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Why is it unethical? An auction is very transparent, very open and when the hammer comes down it has been sold to the highest bidder. In this case, the higest bidder was the auctioneer who outbid the other closest bidder. The Vendor's solicitor knows the price - they could even have done a private deal earlier and withdrawn it from auction if the Vendor had wanted.

A Purchaser has no entitlement to buy if for instance the vendor does not want to sell.

mf
 
Why is it unethical? Surely there is a conflict of interest that must contavene some code of conduct within the IAVI.

I wouldn't consider it "transparent" if a a solicitor is working on behalf of a mystery bidder who is handling the auction.

However if this is common practice then fair enough - but it seems underhand
to me and i want to know if this has happens regularly and if so what do the IAVI think about it?
 
Re: Un-ethical Auctioneering?

Sadmak said:
We have since found out that the solicitor was bidding on behalf of the auctioneer who handled the auction.
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How do you know this for sure?
 
The property has been registered in the name of the auctioneer at the land registry office. If the mystery bidder was someone else who found themselves unable to honour the bid then it should be re-auctioned.

For arguments sake lest assume that the solicitor did nid on behalf of the auctioneer. Is this allowed by the IAVI?

PS i did contact them directly but they refused to discuss the matter without the full facts and details. Which is fair enough. BUt at this stage i don't want to make a big deal about it. I only want my original question answered.
 
Sadmak said:
The property has been registered in the name of the auctioneer at the land registry office.
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This seems to be an amazingly quick outcome. Doesn't it take months or even years to get registrations through the Land Registry?
 
Rainy, can you not take his word for it? Perhaps the auction was months ago (he only said "recently" which is a relative term).


According to Rule 13 of the the IAVI :

A member shall make full disclosure to the client of all or any material circumstances where instructed to sell or let property if it is proposed that any estate or interest in such property shall be acquired either by the member, a member of the member's family, the member's co-director, partner or nominee, a private company in which the member holds shares or a member of staff. The same shall apply where a member is retained by a client to secure or negotiate the purchase or leasing of property when any of the foregoing have an estate or interest.

So I suppose it's up to the seller to decide if this represents a conflict of interest on behalf of the auctioneer and to decide whether or not to retain the auctioneer in such a case.
 
Thanks Extopia

Rainy Day - the auction was last April - i suppose recently is a relative term
 
Sadmak said:
Rainy Day - the auction was last April - i suppose recently is a relative term
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I take it you mean April 2004?

extopia said:
Rainy, can you not take his word for it? Perhaps the auction was months ago (he only said "recently" which is a relative term).
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I've had frequent experiences here on AAM (though I'm not referring to this specific thread) that when you ask specific questions, you get additional information which puts a different slant on the original question.
 
Just a quick note - I am aware of several of the larger estate agency firms who prohibit their staff from purchasing property from their company unless it is either (a) a new build (b) at auction. However, to purchase at auction, the staff member must get approval from their direct superior and the auctioneer on the day.
Personally, I would feel that the auction sounded fair enough, the property sold for more than you expected, but this would merely be a reflection of the eventual purchaser's upper limit. You say that your father pulled out at €170K on a property that was guiding €90K - fair play to him, he probably saved himself a load of money! But the person who eventually bought it did feel that it was worth the amount that he bought it for.
However, if the auctioneer was raising the prices "against the wall" this would be a different matter and one that i would raise with the IAVI.
HTH
 
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