Legislative Assembly for the ACT: 2003 Week 9 Hansard (26 August) . . Page.. 3148 ..
MR STEFANIAK (continuing):
There are a number of features of this bill, Mr Speaker. There is some concern in relation to what now occurs at auctions. The government is getting rid of the unethical practice of dummy bidding at public auctions. I do not quite know whether that is meeting with universal acclaim, but it is something that the government will be getting rid of. I would think that if someone really wants a property and they are genuine about it, they are going to bid for a property and buy it. Dummy bidding might help to get people interested, but at the end of the day I can see nothing wrong with just having the genuine bidders in there. Obviously, if they are interested, there will be good bidding and the property will be sold.
I know that Mr Peter Blackshaw has some concerns in relation to just how the process around the auction is going to work. I understand that he has some problems in relation to the registration of bidders and the like. I suppose that we need to see how that will work. He is an experienced real estate agent who has indicated that he feels that this might see the end of auctions in the ACT. I would hope that that will not be the case. I have not heard it from other sources. Indeed, the Real Estate Institute seemed to be quite calm about that practice. Perhaps it is something that we do need to watch.
I would think the practice of registering bidders at an auction is very much a sensible one. Obviously, you want to know who is fair dinkum, who is actually there to bid for the property. It is probably a protection for people who just go along to look and who cannot be involved and accidentally have the property knocked down to them, not that that actually happens in reality, but that is a great fear of anyone who attends auctions. We will probably need to see how that goes, but the Real Estate Institute and the Law Society do not have a problem there.
I think that the provision requiring a draft contract of sale to be available prior to a property going on the market is a sensible move. I was quite pleased to see that, unlike the situation in New South Wales, there will be various reports attached to that contract-the various inspection reports which you have to get if you are a purchaser. That, in itself, has led to problems in New South Wales, where gazumping has not been stamped out. I know of a number of instances in which gazumping has occurred under the current laws, which have been with that state for some time. I have seen that first hand. I think that it will go some of the way towards stopping that that those reports will be there.
I am also pleased that it will be the responsibility of the seller to provide the two main reports and of the buyer to pay for them. Obviously, the buyer interstate would have to pay for those reports anyway. I think that it is a very sensible move to put that in the legislation. I think that that is an improvement on the New South Wales set-up.
The situation in terms of what will occur if it all falls through-I think that it is important to have a cooling-off period-is that the buyer will forfeit 0.25 per cent of the purchase price of the property. That is quite reasonable. For a $300,000 property, which is probably the norm in Canberra these days, a buyer who had second thoughts within the five-day period would forfeit $750. It is right and proper that there be some penalty there as discouragement, but there is still a let-out if something goes