Selling at auction does not take a Queensland property outside the seller disclosure scheme. There is no auction exemption. What changes is the timing, so disclosure needs to be part of the campaign's preparation rather than something arranged close to auction day.
When the disclosure has to happen
Unlike a negotiated sale, an auction does not provide a pre-contract period in which a buyer can work through the paperwork before committing. The disclosure goes to registered bidders before bidding, which means the completed Form 2 and the prescribed certificates have to exist, and be available to bidders, in advance of auction day.
That places the work at the front of the campaign. Several of the prescribed certificates are ordered from councils, registries or a body corporate and arrive on their own schedule, so they are usually what sets the timeline.
Two situations worth considering as part of the auction plan
- A bidder who registers on auction day. If someone registers shortly before the auction starts, confirm how the disclosure reaches them and by when, so a late registration does not put the sale at risk.
- A property that passes in. If the property does not meet reserve and negotiation moves to private treaty, do not assume the pre-auction disclosure carries across to whatever is signed afterwards. This matters most where the eventual buyer was never a registered bidder. Check the position before a contract is put in front of anyone. A sale agreed within 2 days after the auction also has no cooling-off period; one agreed later does.
Both are worth settling with your conveyancer while the campaign is being planned rather than on the day.
What happens if disclosure requirements are not met at auction
Two points matter here.
- There is no cooling-off period at auction in Queensland. That is a general feature of buying at auction and is separate from the seller disclosure requirements. A buyer may still have a statutory termination right where the applicable disclosure requirements have not been met.
- A disclosure defect may affect the transaction after the auction has concluded. Where a compliant Form 2 was not given, the buyer may terminate at any time before settlement, as set out in buyer termination rights under Form 2.
What this means for an auction campaign
- Start the disclosure pack when you list, not when you set the auction date.
- Allow time to obtain the required certificates, as these come from different authorities and organisations.
- Have the pack available to bidders as they register, rather than producing it on request on the day.
- Settle the two situations above in advance, as part of planning the campaign.
- Do not assume an exemption. The carve-outs are covered in Form 2 exemptions, and none of them is about the method of sale.
Zettle prepares Form 2 disclosure packs for Queensland sellers and agents on a fixed fee, timed to a campaign rather than to a contract. See the Form 2 service. More on conveyancing in Queensland, including Townsville and Cairns.
General information only, not legal advice.
