Complainants told the ACT Integrity Commission that the land sales system was rigged. Photo: Region.
The Suburban Land Agency will conduct an independent review of the single residential land sales process after an Integrity Commission probe highlighted corruption risks.
In a report tabled in the Legislative Assembly, the ACT’s anti-corruption watchdog cleared the SLA of any corrupt behaviour but identified a “number of significant vulnerabilities that pose potential corruption risks for the Suburban Land Agency and the integrity of its processes”.
In 2020, the SLA received three complaints that its ‘book-to-buy’ process for the sale of residential lots in Throsby and Whitlam was being gamed.
A potential buyer had to complete an online registration at a certain time to be allocated up to two blocks of land to purchase, but the complainants alleged that the process was “rigged” to give an advantage to certain registered applicants.
The complainants had been unable to secure an appointment after the SLA site was swamped, but two of them had alleged they had been approached by other applicants willing to sell them a booking – one for $5000, with a further $5000 for the Sales Agent, and the other for $10,000-13,000 – after the Sales Agent passed on their details.
“This led ‘Mr Jones’ [one of the complainants] to infer that the ‘whole process of web registrations is rigged’ by the Sales Agent, with only a small proportion of ‘genuine buyers’ able to access blocks,” the report said.
“Mr Jones” had also been been told that a builder had 40 of his staff on the SLA site securing appointments.
The SLA said the review would confirm the suitability of the process for its intended purpose, ensure it was sound and robust and identify any further adjustments, controls or ways to reduce risk which could be adopted to prevent the kinds of problems that had been identified.
It also made changes to the sales process to address the issues raised in the complaints.
The SLA suspended book-to-buy sales in February, it has introduced a smart form to prevent multiple registrations from one buyer, and sales conditions include specific clauses about substituting or adding names to the first grant contract.
Prospective buyers can also register their interest at any time during a specified window to prevent system delays to registrations.
But the commission said this may not be enough to prevent someone from silently using a number of agents to secure multiple registrations.
It suggested that an application require an express confirmation that the applicant is not acting as an agent for another person or otherwise to identify their principal, and makes this a term in the contract, which could be cancelled if not adhered to.
The commission said it seemed clear that gaming of the book-to-buy system as it was configured was a real risk to the integrity of the process.
But there was not enough information to suspect employees of the Sales Agent or the SLA “gave advice or assistance to third parties to enable the process to be bypassed (which could amount to improper conduct, particularly if done for reward), and there was no other evidence that suggests this occurred”.
“However, the process needs to be examined, and adjusted if necessary, to provide reasonable assurance that this kind of problem will not arise in the future,” the report said.
The commission suggested that applicants should have to disclose any arrangement, formal or informal, that implied an obligation, once contracts were exchanged, to transfer the benefit of the contract to a third party and that not doing so would be a criminal offence.
It said the Book to Buy Sales Conditions – Put and Call Option document was unsatisfactorily drafted and unnecessarily obscure.
The SLA had sought the view of the ACT Government Solicitor on these matters.
The commission also said it was difficult to justify a process that depended on the sophistication of an individual’s computer access and the “accident of intensity of usage”.
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