Disclose your interests as a motor dealer
By law, you must disclose if you will receive (or expect to receive) any benefits from a sale.
Private sales
If you sell your own vehicle or your associate's vehicle, you must:
- tell the prospective buyer that you are a licensed motor dealer
- follow the rules for used vehicle sales as you need to in your business.
This includes giving the:
- cooling-off period
- statutory warranty
- required forms.
If you do not, we can fine you.
Meaning of beneficial interest
As a licensee, you are regarded as having a beneficial interest in the purchase of the 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 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 are regarded as having 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.
Property can include goods. Goods are personal property that is tangible property. This can include livestock and used motor vehicles.
As a motor dealer or salesperson you can enter into a beneficial interest sale, as long as you:
- do not obtain an option to purchase the motor vehicle from the owner (other than another motor dealer)
- do not obtain an option to purchase the motor vehicle (other than from another motor dealer).
If the client places the motor vehicle for sale on consignment, you may obtain a beneficial interest in the vehicle as long as:
- 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 motor vehicle were sold at fair market value.
You cannot have a beneficial interest if you have an option to buy the vehicle. This does not apply if you bought the option from another dealer or a chattel auctioneer.
Penalties
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.
Other interests
You must disclose other interests on your appointment form.
Form 9 - Motor Dealers and Chattel Auctioneers Act 2014
Disclosure of beneficial interest to seller (by a chattel auctioneer) form
Form 10 - Motor Dealers and Chattel Auctioneers Act 2014