Summer 2016 eGavel Pg5
Welcome to the MAA’s Summer 2016 eGavel!
The 29 things that should be in an auctioneer’s contract with a seller
by Mike Brandly, The Ohio Auction School
Every time, no exceptions.
This contract (and the particulars of such) may be mandated by state law.
Every auctioneer is advised to seek legal counsel and have that attorney draft a compliant auction contract for their specific circumstances, business structure, market area and jurisdictions.
Nevertheless, we propose that these twenty-nine (29) provisions constitute the minimum of any auctioneer contract:
- The date of the agreement
- The owner of the property to be sold or the owner’s agent, and the name of the auctioneer
- The court or public authority overseeing this auction and case number, if applicable
- The date and time of the auction or a termination date of the contract or agreement
- The location of the auction
- A description of the real or personal property to be sold
- The terms and conditions of the auction
- A statement indicating whether the auction is a reserve auction or a without reserve auction
- All of the fees to be charged the seller by the auctioneer and/or paid by the auctioneer, which shall include commissions, rentals, advertising, and labor
- A statement affirming if a buyer’s premium will or will not be charged, and if so, in what specific manner and how any buyer’s premium collected will be disbursed
- A statement indicating where and how the auction will be advertised
- A statement affirming if and how sales tax will be charged, and who is responsible for collection and disbursement
- A statement indicating if proceeds of the auction are provided the seller immediately following the auction, or if an escrow account is utilized
- A statement indicating if interest is earned on any escrowed funds, how that interest is disbursed
- An explanation of the settlement of the auction that includes when/how settlement will be made
- A statement establishing the responsibility for bad checks, debts, and unpaid auction items
- A statement establishing a policy regarding any property which doesn’t sell at the auction
- A listing of all liens on any property being sold, including all lien holders, contact information, and all amounts owed, and a description of the manner in which these liens will be satisfied
- A statement of the auctioneer’s policy regarding absentee bidding
- A statement indicating if the auction is (a) live only (b) online only (c) live and online, or other format as noted, and associated costs/fees herewith
- The names of all online providers being utilized for this auction, if applicable
- A statement of the auctioneer’s policy concerning the auctioneer and/or auctioneer’s staff bidding at the auction
- The auctioneer’s license number, if applicable
- Affirmation that the auctioneer is bonded, or part of a state managed recovery fund, and the associated coverage
- A statement indicating if this property will be the only property sold at this auction, or if other owners’ property will be sold at this same auction
- A statement noting the names, and license numbers if applicable, of all other auctioneers who will be assisting in the selling this property at auction
- A statement indicating who is responsible for insuring the property through title transfer
- An affirmation that this auction will comply with the UCC 2-328 as adopted by the state where the auction is being conducted, or agreed-to jurisdiction
- An affirmation that the auctioneer will retain a complete accounting and file concerning this auction for 5 years, or per state law, as adopted
There are generic auctioneer-seller contracts available from auction supply houses and the like; we suggest something much better and here’s why.
Such contracts are largely incomplete and noncompliant, especially in the approximately 25 license states in the United States, the various business structures auctioneers operate within and considering the litigious society in which we live.
It’s probably worth saying again … every auctioneer — with every seller — every auction — every time — and prepared by an attorney for that auctioneer to use.
Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, Keller Williams Auctions and Goodwill Columbus Car Auction. His Facebook page is: www.facebook.com/mbauctioneer. He is Executive Director of The Ohio Auction School.