by Peter Mericka B.A., LL.B
Real Estate Lawyer
Qualified Practising Conveyancer Victoria
Director Lawyers Real Estate Pty Ltd
It’s time for consumers to get serious about the tricks and criminal conduct associated with real estate auctions. As most of the criminal conduct associated with auctions takes place when the auction is in progress, the logical solution is to make a record of the proceedings. The video recording of every real estate auction would greatly assist in keeping real estate agents within the law, and consumers safe from criminal conduct.
As a former member of the Victoria Police Force, I can recall the time when the audio taping and video taping of police interviews was introduced. Some thought it would stifle police interrogations, that police would be reluctant question suspects thoroughly, or that suspects would be reluctant to participate. But the benefits were soon realised. I would often tell a suspect, “See that tape recorder, just imagine that it’s a judge and jury and they’re listening to everything we talk about this morning.” A suspect who was initially full of bad language and bad attitude would suddenly realise that everything he said or did would be viewed by those whose role it was to assess his credibility, and he would see the advantages of being honest and courteous.
Auctions have always attracted crime
Serious criminal offences are regularly committed under the veil of the real estate auction – the most common being the criminal office of “Obtaining Financial Advantage By Deception”. This crime was ignored for years, and justified by real estate agents as an essential part of the auction process. Eventually, the state government realised that the offence under the Crimes Act (see Section 82 of the Crimes Act 1958) was simply being ignored by the REIV, real estate agents and the regulating authorities. In order to look as though positive action was being taken to stamp out this crime, the government introduced a lesser version of the offence, called it “Dummy Bidding”, and added it to the Sale of Land Act (see Section 39 of the Sale of Land Act 1962).
There were reports that dummy bidding slowed for a while, but anecdotal evidence (there are very few prosecutions) suggests that it is as prevalent as ever. Similarly, underquoting, dodgy price ranges and the refusal of estate agents to allow genuine negotiations on auction day put vendors and purchasers alike at a disadvantage. It seems that the one rule that all estate agents observe at auction is that a sale must take place, by fair means or foul.
Even “softer” forms of deception generally escape detection. For example, in a comment to a recent blog posting about dodgy auction result figures from the REIV, I was able to give a first-hand account of having seen former REIV President Richard Carter of Carter Real Estate Ringwood falsely report my neighbour’s house as having sold at auction, when in fact the property had been passed in.