General rules for conducting an auction of goods (chattel auction)
You must follow the following rules to hold most types of chattel auctions. Separate rules may apply for auctions of motor vehicles and agricultural goods (including livestock).
Have the right licence
In most cases, you must have a chattel auctioneer licence to conduct a chattel auction. However, you won’t need a licence if you:
- are conducting a charity auction, are not being paid, and the charity is collecting and dealing with the monies
- have an auctioneer (real property) licence and the goods are directly connected to a property at auction.
There are other exemptions to licensing, so for a full list of who is exempt, you will need to read the legislation to gain a better understanding.
Receiving the goods
To hold an auction of goods, you must possess the appropriated licence and you may either:
- own the goods yourself
- be the appointed agent of a seller.
Reserve price
You must ask sellers if they have set a reserve price. If they have, then you must record this figure in the store book (and also in the seller's statement if the item being auctioned is a vehicle being sold on consignment).
If they elect not to set a reserve price, you must advise them in writing that they will be obliged to accept the highest bid.
Store book
You must keep an auction store book if you are selling chattels other than livestock. This will record relevant information about both the goods and the auction.
When you acquire any goods (by purchase or consignment), you must record in your store book:
- a description of the goods
- any identifying marks or number (e.g. a serial number)
- the reserve price if set by the owner
- the seller’s name and address
- the date that you received the goods.
Your store book must remain at your registered office.
Preparing for the auction
Register all bidders
You must keep a register of all bidders at an auction. People must register before they can bid.
This means that you will need to:
- register them before the auction starts
- see suitable identification (e.g. a driver licence) before you allow a bidder to register
- give each bidder an identifying marker (e.g. a numbered card or baton) that they must use to indicate a bid
- announce at the start of the auction that only registered bidders may bid.
You must not identify any bidder during the auction. After the auction, you may only do so in order to help finalise the sale.
You must not identify a bidder in any other circumstances, except to an inspector or a Court.
Conducting the auction
Your identity
You must disclose your identity at the start of an auction.
Find out more about identifying yourself as an auctioneer.
Reserve price
You must announce to bidders:
- that a reserve price exists at the start of the auction
- as soon as bidding reaches the reserve price.
The seller may direct you to announce (or not announce) the figure of the reserve price at the start of the auction. You must follow the seller’s direction.
Buyer’s premium
A buyer’s premium is a fee for the buyer to pay (usually a percentage of the sale price). You charge this when you finalise the sale. This is in addition to your sale commission.
In order to charge a buyer’s premium, you must give a statement to tell all buyers that you charge this fee, and at what percentage.
You will need to:
- make the statement verbally at the start of the auction (except for online auctions)
- display the statement so it is visible to each prospective bidder (including at an online auction)
- include it on all advertisements.
You must have the seller’s written consent to charge a buyer’s premium.
Finalising a sale
Record the details
As soon as possible after the auction, you must record in your sales book:
- the date of the auction
- a description of the goods
- the sale price
- the name and address of the buyer
- a cross-reference to the entry in the auction store book noting when you acquired the goods.