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Rules of Auction

Rules of auction

THE IMPORTANCE OF THE RULES OF AUCTION

WHAT ARE THE RULES OF AUCTION?

All auctions are governed by a specific set of Terms and Conditions (T&Cs) that are referred to as the “Rules of Auction”. The Rules of Auction bind the buyer, seller and auctioneer to predetermined conditions that specify how the auction is going to be conducted. These conditions are intended to protect all the parties involved in an auction, under the rule of laws that regulate the auction industry. The Rules of Auction comply with the Consumer Protection Act (CPA), with a specific focus on sections; 20, 21, 24, 26, 28, 45, 55 and 65 of the regulations.

The information provided in the Rules of Auction mitigates any unexpected surprises by detailing the requirements and expected outcomes for various scenarios that may arise during the course of an auction. Overall, the main function of the Rules of Auction is to keep buyers and sellers informed and to offer protection from any potential unfair practices.  

All the participants of an auction are required to accept and sign the Rules of Auction prior to the auction. That is why it is important not only to read, but to understand what the Rules of Auction entail.

THE NEWCOMERS GUIDE TO UNDERSTANDING THE RULES OF AUCTION

First time auction buyers often feel intimidated by the Rules of Auction due to the amount of information that they contain. It can be quite overwhelming if you do not know how to approach the task of understanding the comprehensive document. Below is a broad summary of the main sections that make up the Rules of Auction.

Definitions – This section clarifies all definitions that are unique to the auction process, i.e. “bid calling” and “hammer price”.

Compliance – This section illustrates how the specific conditions of the CPA apply to the auction.

Mandatory Information – This section provides information, as required under the rule of law, that must be made available to all participants before any auction takes place. This covers regulations ranging from, but not limited to, how an auction should be advertised and goes as far as outlining the requirements for bidding on behalf of a person or entity. 

Admission and Registration – This section lists all the necessary requirements that participants need to source and register, in order to be granted permission to join an auction.

General Procedures – This section of the Rules of Auction covers the specific procedures that need to take place from the start of auction bidding, right through to its absolution.

Financial Arrangements – This section outlines, in detail, all the clauses that relate to how payments should be made, processed and settled.

Highlighted Rules – This section outlines the specific set of rules that require additional attention.

Moveable/Immovable Property Rules – This section has its own specific set of rules that are not covered in the general rules. They have been further expanded on in more detail for buyers, bidders and sellers who wish to get involved in a movable or immovable property auction.

FAMILIARITY IS BENEFICIAL

While auctions are conducted under varying conditions, the key takeaway is that for the most part, the main section(s) of the Rules of Auction remain the same for every auction. Knowing this makes it easier for newcomers to familiarize themselves with the applicable sections that are likely to change per auction. With time, buyers become more comfortable with the Rules of Auction format, identifying changes without them being highlighted. Familiarity is the key to developing this skill which ultimately makes the auction experience more satisfying.

WHERE DO I FIND THE RULES OF AUCTION?

The Rules of Auction can be obtained by anyone either on the Tirhani Auctioneers website as an attachment to an auction listing. The Rules of Auction can also be found at the auction site during the viewing and on live auction days.

We highly recommend that first time buyers familiarize themselves with the Rules of Auction prior to registering for the auction they are interested in. All questions can be directed to info@tirhani.co.za.

As always, we welcome your comments in the section provided below.