Internet house auction illegal, Internal Affairs says

Internal Affairs has shot down plans by a Christchurch couple to sell their house on an internet auction.

The auction would be illegal gambling and Internal Affairs' gambling compliance manager Debbie Despard today advised people not to take part.

The house, with a rating value of $594,000, is in the Christchurch suburb of Redwood. Under the auction idea, the lucky buyer could pay somewhere between $100 and $1100.

Real estate agent Brad Maxwell and wife Janice own the property through a family trust and were selling it through a new sales method they hoped would catch on.

Would-be buyers book a seat at an internet auction for $100 each with the house going to the lowest unique bid between 1c and $1000.

But Ms Despard said that under the Gambling Act 2003 the auction was illegal on several grounds.

"There is a huge element of chance in this so-called auction in which people pay to participate," she said.

"It is also online gambling, which the Act defines as `remote interactive gambling'.

"Gambling with prizes exceeding $500 can only be conducted by societies raising money for authorised charitable purposes but this sales scheme is conducted by a private person for personal profit and cannot be licensed by the department."

Ms Despard warned that participating in illegal gambling was a criminal offence.

"Also, any sale and purchase agreement arising out of such an auction would be on shaky ground because the Gambling Act says contracts relating to illegal gambling would be illegal for the purposes of the Illegal Contracts Act 1970."

Internal Affairs has told the Trade Me and Premier Realty websites that the proposed sales method was illegal and was also contacting the Real Estate Institute of New Zealand.

The Maxwells had ensured they would not lose out on the deal, the Press reported today.

They had calculated that selling between 5000 and 6000 seats would bring in what they wanted for their home, and only then would the online auction run.

"This is a genuine auction. We are not here to rip anybody off. The intention of this exercise is to sell the property at market value," Mr Maxwell said.

- NZPA

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