When the seller is a lender, an estate or a court: the auctioneer's side

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Kooky

Builder of Shaka, the payment router that pays every agent their commission on closing date.

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Most auction campaigns begin with an owner's decision. Someone chooses to sell, chooses an agency, agrees a reserve and stands at the back of the crowd on the day. A smaller group of auctions begins somewhere else: in a loan contract, a will, an administration order or a court file. The property is the same kind of house or block of land. The person who gives the auctioneer instructions is not the person who lived there.

For the auctioneer, these sales raise questions an ordinary campaign never asks. Who is the client? Who may set the reserve, approve a lower deposit or accept an offer before the day? What duty does the seller owe to someone who is not in the room, and how does the conduct of the auction bear on it? Which of the usual seller obligations still apply?

This guide works through four kinds of sale from the rostrum's side: a sale by a mortgagee exercising its power of sale, the sale of a deceased person's home, a sale by the Public Trustee of Queensland, and a sale ordered by a court. It describes process only, as Queensland's Acts, the Public Trustee's own documents and published legal commentary set it out. It is general information. Each of these sales turns on its own documents, and the people running one take their own legal advice.

Public Trustee of Queensland, real estate auction conditions of sale (undated); Macpherson Kelley, article on seller disclosure exceptions, 2 July 2025.

One common thread: the seller acts for someone else

What joins these four sales is a seller who holds a power, not simply a property. A lender sells because the mortgage gives it a power of sale. An executor sells because the will and the grant give authority over the estate. The Public Trustee sells in whichever capacity it has been appointed. A trustee for sale acts because a court order says so.

In each case the money does not simply belong to the seller. A lender sells to recover what it is owed, and the price matters to the borrower as well. An executor holds the proceeds for beneficiaries. The Public Trustee holds them for an estate or for a person whose affairs it manages. A court-appointed trustee divides them as the order directs.

That is why these sales are described as carrying duties. The seller answers to someone else for how the sale was run and what it achieved. The auctioneer does not carry those duties personally, but the auction is the event by which the seller will later show that the sale was properly conducted. A public auction, openly advertised and competitively bid, is a visible record of how a price was reached.

Who the client is, and who gives instructions

The first practical task is to identify the client correctly. The table sets out the four cases.

The table has a consequence for every later step. The person living in the property, if anyone is, is not the client and cannot give instructions about the reserve, the date or the terms. Those come from the lender's officer or its lawyers, from the executor, from the Public Trustee's staff or from the trustee named in the order.

It also explains a habit of careful auctioneers in these sales: asking to see the document that gives the seller its authority before the campaign begins. This magazine's guide to who hires the auctioneer explains that an auctioneer acts on a written appointment. In these sales the appointment is signed by a person acting in a capacity, and the capacity is worth reading as closely as the signature.

The mortgagee's duty when it sells

A lender that sells a borrower's property is not free to accept any price that clears its debt. Queensland has long added a statutory duty to the general law, and the duty has moved from one Act to another.

Under the former section 85 of the Property Law Act 1974, a mortgagee exercising a power of sale was required to take reasonable care to ensure that the property was sold at market value. That wording is quoted in an article published in July 2026 by the law firm Stonegate Legal, which explains that the Property Law Act 2023 now applies to current transactions. The new Act commenced on 1 August 2025.

The firm describes the duty in its current form as one of reasonable care in the conduct of the sale and in relation to the market value obtained, protecting persons whose interests may be affected. The phrase "persons whose interests may be affected" matters. The borrower is the obvious one, since the price decides how much of the debt is cleared. Others with an interest in the outcome may stand behind the borrower.

Behind the statute sits the older general law. At common law, the same article notes, a mortgagee must exercise its power of sale in good faith and must not recklessly or wilfully sacrifice the mortgagor's interests. The statutory duty asks for more than honesty. It asks for care.

Two features of this duty are worth stating precisely. First, it is a duty about process as well as outcome: the words are "reasonable care", not a guarantee of a particular figure. Second, it is the mortgagee's duty. The auctioneer is engaged to help the mortgagee discharge it and does not take it over.

The Property Law Act 2023 also has its own paperwork for a mortgagee sale. The Queensland Government's publications portal lists approved forms under the Act that include a notice of exercise of power of sale (Form 3) and a notice of sale by mortgagee (Form 5). This guide does not set out the periods and contents of those notices, because the sections that prescribe them were not available in a form that could be checked for this article. The forms and the Act are the place to read them, and they are a matter for the lender and its lawyers, not for the auctioneer.

What that duty means for the campaign

An auctioneer is not asked to give an opinion on whether a lender has met its duty. But every element of an auction campaign is a piece of the "conduct of the sale" that the duty is about, which is why mortgagee instructions tend to be detailed and documented.

Seen from the rostrum, the duty explains several features of these campaigns. A lender wants to be able to show that the property was exposed to the market, so the marketing is planned and recorded. It wants to be able to show how the reserve was arrived at, so the reserve is set by the institution on its own material and not in a conversation on the footpath. And it wants a clear account of the bidding, so the record of the auction matters after the day as well as on it.

The same reasoning explains why decisions that an owner would make in seconds can take longer. A proposal to sell before auction, to drop the reserve during a pause or to negotiate with the highest bidder after a property is passed in is a decision for the mortgagee, taken against its duty. The auctioneer's role is to put the question to the person with authority and to wait for the answer.

None of this changes the rules of the auction itself. The duties that Queensland law places on every property auctioneer, covered in this magazine's guide to auction-day obligations, apply in a mortgagee sale exactly as they do in any other.

Seller disclosure: no exception for a lender

Since 1 August 2025, a seller of Queensland land has had to give the buyer a disclosure statement under the Property Law Act 2023 before the contract is signed. Section 100 of the Act lists the situations in which that requirement does not apply.

The list is summarised in an article published on 2 July 2025 by the law firm Macpherson Kelley. Among the exceptions it names are sales to government, statutory bodies and listed corporations; transactions above $10 million where the buyer gives a notice waiving compliance; transfers between related parties who waive in writing; transfers between co-owners; boundary adjustments; and certain family law transfers. Two entries on the list bear directly on the sales in this guide. A sale to give effect to a court order or an enforcement warrant is excepted. So is a transfer after the owner's death to a beneficiary of the estate, or under a court order arising from a family provision claim.

The reading for each kind of sale follows from the wording of the exceptions as summarised.

For a mortgagee sale, there is nothing to rely on. The lender prepares and gives the disclosure statement like any seller, even though it may know far less about the property than an owner would.

For a deceased estate, the exception is narrow. It covers the transfer of the property to a beneficiary. It is not worded to cover a sale by the executor to a member of the public at auction, which is the usual way an estate home reaches the rostrum.

For a court-ordered sale, the exception is direct: a sale that gives effect to a court order or an enforcement warrant is outside the requirement. Whether a particular sale is truly one that gives effect to an order is a question for the lawyers on the file.

The firm adds a caution that applies across the board: obligations to disclose environmental matters under other legislation continue regardless of these exceptions.

For the auctioneer, the point is practical. The Public Trustee's conditions, described below, have the buyer sign the contract as soon as the hammer falls, and auction contracts in general are signed on the spot. The disclosure documents therefore need to be in order before bidding opens. In these sales, who prepares them and on what information is a question to settle early with the seller's lawyers.

Deceased estates on the rostrum

An estate sale is the most common of the four and the closest to an ordinary campaign. The client is the personal representative: the executor named in the will, or an administrator appointed by the court. The beneficiaries may attend, and may have strong views, but instructions come from the representative.

How an executor's authority arises, when a grant is needed and how a sale under a power of attorney differs are covered in this magazine's guide to selling a Queensland home as an executor or under a power of attorney, and are not repeated here.

From the auctioneer's side, three things mark an estate sale. Where there is more than one executor, the instructions on reserve and on any pre-auction offer need to come from all who must agree, and it helps to know before the day who will be reachable and who speaks for them. The seller often has limited personal knowledge of the property, which affects what can be said about it. And the disclosure position is the ordinary one, as the previous section explains, unless the property is passing to a beneficiary instead of being sold.

How the Public Trustee sells real estate

The Public Trustee of Queensland is a government body that, among other roles, acts as executor of estates and administers the financial affairs of some of its customers. Its real estate pages explain that it sells property in both capacities: when it is appointed executor of an estate, and when it administers a customer's financial affairs and a property must be sold, for example to fund a move into other accommodation.

It publishes its own conditions of sale for real estate auctions and a page for bidders, and together they show a seller that has standardised how its auctions run.

The deposit under the conditions is 5 per cent of the purchase price, or a lesser sum if the auctioneer or the seller approves. The Public Trustee's page for bidders describes the contract as cash unconditional: it is not subject to finance or to any other condition, building and pest inspections included.

The conditions give the auctioneer a defined set of powers. The auctioneer may refuse any bid. Where a dispute arises, the auctioneer decides it at their absolute discretion, and may reopen the bidding. The seller reserves the right to bid, in person or through the auctioneer, and to withdraw the property at any time during the auction. As this magazine's guide to auction-day duties explains, a condition of that kind operates inside the limits the Property Occupations Regulation sets for bids made for a seller.

Two further conditions reflect the kind of seller the Public Trustee is. The first is a disclaimer: the auctioneer is not responsible for the correct description or authenticity of the property, or for any fault or defect in it, and makes no warranties. The second deals with GST. The conditions provide two alternatives, one where the price is inclusive of GST and one where the seller is registered and the buyer pays GST in addition at settlement, with the applicable one announced at the auction.

The conditions document carries no date and does not name the standard contract used, the settlement period or the position on vacant possession. Those are found in the contract for each property.

Sales ordered by a court

The clearest statutory example of a court-ordered sale of land involves co-owners who cannot agree. Under section 33 of the Property Law Act 2023, a co-owner of property may apply to the court for an order for sale, for division of the property, or for a combination of the two. Section 34 allows the court to order a sale and the division of the proceeds, or a physical division.

The order does not leave the co-owners to run the sale between them. Section 37 allows the court to appoint a trustee for the sale or division, and to give directions about the terms of the sale, the distribution of the proceeds and the trustee's remuneration. Under section 38, the order vests the property in the trustee in the same way as a vesting order under the Trusts Act 2025.

For an auctioneer this settles the question of the client completely. The trustee holds the property and gives the instructions. The former co-owners may attend, and the order may or may not allow them to bid, but neither of them is the seller. The terms the court has directed, such as the method of sale or how the reserve is to be fixed, bind the trustee, and so the order itself is the first document to read.

Court-ordered sales reach beyond co-ownership. The seller disclosure exception discussed earlier refers to sales that give effect to a court order or an enforcement warrant. How such warrants are carried out is outside this guide.

Which licensing rules apply

The Property Occupations Act 2014, which licenses property auctioneers, contains a short group of exemptions that touch these sales.

Section 5 provides that named parts of the Act do not apply to a sale ordered by a court. Section 6 deals with administrators and trustees appointed by a court who perform activities that would otherwise need a licence. Section 10 says that the same parts, to the extent they relate to a property agent, do not apply to a financial institution or a trustee company.

Goods have a matching rule. Under section 6 of the Motor Dealers and Chattel Auctioneers Act 2014, the provisions on chattel auctioneers do not apply to sales ordered by a court. Where a court-ordered sale includes the contents of a property, both Acts therefore point the same way.

These provisions describe what the institutions themselves may do. They are not a general release for everyone involved in such a sale. A lender, an executor or a trustee for sale commonly engages a licensed agency and a licensed auctioneer, who act under their own licences and the ordinary conduct rules. The Public Trustee's published conditions assume an auctioneer exercising the familiar powers of the role.

What is different on the day

To a bidder, most of these auctions look ordinary. The differences sit in the details, and an auctioneer who has run them will point to the same handful.

No owner in the room. In an ordinary sale the auctioneer can walk to the back of the crowd for instructions. In these sales the person with authority may be an officer on the telephone, a trustee with a written limit, or an executor consulting a co-executor. The reserve and the room to move are settled before the day, in writing where possible, and a pause for instructions can take longer.

Terms that do not bend. Institutional sellers publish their terms and hold to them. The Public Trustee's bidder page states the position without qualification: cash, unconditional, no finance clause and no building and pest clause. Its conditions do allow a deposit below 5 per cent, but only with the approval of the auctioneer or the seller.

Less said about the property. A seller who never lived in a house cannot describe how it performs in a storm. The Public Trustee's disclaimer, that the auctioneer makes no warranties and is not responsible for description or defects, is the formal expression of that position. It is also why its bidder page points buyers to inspections before the auction.

Possession. Whether a property is sold with vacant possession is a term of each contract. The Public Trustee's general conditions do not address it, and no rule read for this guide gives a single answer across the four kinds of sale. A bidder who needs to know reads the contract for that property, and an auctioneer asked from the floor refers to it.

Disclosure documents. As set out above, a mortgagee and, in the usual case, an executor remain subject to the seller disclosure regime, while a sale giving effect to a court order is excepted. Which position applies, and what has been given to bidders, is settled before the preamble.

GST. Under the Public Trustee's conditions, which of the two GST alternatives applies is announced at the auction, so it forms part of what the auctioneer says before bidding begins.

What does not change is the auction itself. The bidders are registered, the bidding is called in the same way and the hammer has the same effect.

In these sales the seller answers to someone who is not at the auction, and a well-run, well-recorded auction is a large part of the answer.

Kooky, from Shaka

Kooky edits Queensland Estate and builds Shaka, the payment router he made for Queensland property professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

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