A Victorian estate agent conducts a property auction where a dummy bidder (vendor bid not declared) is used to inflate the price. Under Victorian law, what are the potential consequences?
Correct Answer
C) Substantial fines for the agent and bidder, and the buyer may be able to rescind the contract.
Dummy bidding is an offence in Victoria. Under the Sale of Land Act 1962 and its auction rules, a vendor bid may be made only by the auctioneer and must be clearly announced as a vendor bid. A person who makes a false bid on the vendor's behalf, and an agent or auctioneer who arranges or accepts it, faces substantial penalties, and a buyer induced to pay more may have grounds to set the contract aside.
Why This Is the Correct Answer
Undeclared vendor bidding is an offence in Victoria. Vendor bids may be made only by the auctioneer and must be announced. Dummy bidding attracts substantial fines for those involved, and the buyer may have grounds to rescind because the price was inflated by deception.
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