21 NCAC .06 General Auctioneering

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Questions and Answers

What is the maximum duration for a written agreement between an auction house and a repeat dealer or seller?

Six months

Indefinite

One year (correct)

Two years

For how long must the sales records and consignment records be retained by the licensee?

One year

Two years (correct)

Five years

Three years

What information is required in the bidder registration records?

Only bidder's name and address

Bidder's name, address, telephone number, and email address (correct)

Bidder's name and previous auction history

Bidder name and bid amount

In an absolute auction, what requirement is there regarding minimum opening bids?

No minimum opening bid is required Signup and view all the answers

What is the action required by the auctioneer if they bid on an item during a sale they are conducting?

Announce such bidding in advance of the auction Signup and view all the answers

If consigned property is sold, how should any buyer's premium be handled?

Calculated and distributed per consignor's written contract Signup and view all the answers

What must be done if records are requested by the Board or its designated agent?

All required records must be open for inspection or provided upon written request Signup and view all the answers

What defines 'reasonable minimum bid increments' in an auction?

Based on the type and value of the property being offered Signup and view all the answers

Which of the following words cannot be used in an advertisement for an auction?

Seized Signup and view all the answers

What must be disclosed in an advertisement if terms like 'estate' or 'bankruptcy' are used?

The consignor's relationship to the item Signup and view all the answers

Which action is NOT allowed regarding references to laws in auction advertisements?

Referencing the U.C.C. if not legally required Signup and view all the answers

What is a violation concerning auctioneer advertisements?

Permitting the name to appear without review Signup and view all the answers

In what scenario can an auctioneer use governmental terms in an advertisement?

If the auctioneer has received prior written approval Signup and view all the answers

Which statement about auctioneer compliance is true?

The auctioneer must ensure advertisement content aligns with G.S. 85B Signup and view all the answers

What is required when stating that items are from an 'emergency sale'?

The auctioneer must be the original owner Signup and view all the answers

What misleading implication is prohibited in an auction advertisement?

Buyers might receive an unusual bargain due to government action Signup and view all the answers

What must be true for an auction to advertise items as being from a specific location?

Items must have been present without interruption for 30 days. Signup and view all the answers

When is it permissible to include items that are not from the premises in the auction?

They should be advertised as unrelated to the premises. Signup and view all the answers

What actions must an auctioneer take regarding buyer's premiums?

It must be displayed publicly at the auction site. Signup and view all the answers

What is required for funds received by the auctioneer that belong to others?

They should be deposited in an escrow account within three business days. Signup and view all the answers

What must an auctioneer who disburses funds on auction day prepare?

A receipt or settlement statement in compliance with G.S. 85B-7.1(a). Signup and view all the answers

What type of account must an auctioneer maintain if they do not disburse all funds to the seller on auction day?

Custodial Account for Sellers Proceeds Signup and view all the answers

Which of the following is NOT a requirement for advertising auctions?

All items must come from the same residence. Signup and view all the answers

What happens if an auction includes a buyer's premium?

It must be disclosed at the beginning of the auction. Signup and view all the answers

Study Notes

### Auction Agreements

Auction houses can enter into written agreements with repeat dealers or sellers for up to one year.
Auctioneers must keep consignment and sales records for two years from the auction date.
Bidder registration records must include names, addresses, phone numbers, and email addresses.
Bidder registration records must be kept for two years from the auction date.
All records must be available for inspection by the Board or its designated agent.

Bidding

Auctioneers cannot bid on items in a sale they are conducting unless they intend to purchase the item.
In sales with a reserve, auctioneers can bid on the reserve item up to the reserve price without intent to purchase.
The auctioneer must announce any bidding by themselves in advance of the auction.

Auction Firm Requirements

Advertisements cannot use wording like “Contents,” “Stock,” “Inventory,” “Liquidation,” unless the items were physically present without interruption for 30 days prior to signing a contract or written agreement.
If using descriptive words, the majority of the items in the sale must be from the premises.
Other items not related to the contents of a residence or business can be included, but they must be designated as such in all advertisements.
The 30-day rule does not apply to items used in direct conjunction with a residence or business that are brought to the site solely for the purpose of sale at auction.
The buyer's premium must be announced at the beginning of the auction and displayed or distributed to attendees.

Sales Proceeds, Accounting, and Escrow Accounts

All payments made payable to the auctioneer/firm, where a portion belongs to others and is not disbursed to the seller on the auction day, must be deposited in an escrow account within three business days.
Auction houses must prepare a receipt or settlement statement in compliance with G.S. 85B-7.1(a) and maintain records in compliance with G.S. 85B-7.1(b).
Auction houses must establish and maintain a separate bank account designated for seller's proceeds that discloses the depositor is acting as a fiduciary and that funds in the account are trust funds.

Auction Advertising Requirements

Auctioneers cannot advertise auctions using words like "Seized," "Confiscated," "Forfeited" without disclosing the nature of the government action.
Advertisements cannot use terms like “estate,” “bankruptcy,” “urgent,” “emergency,” “distress,” “seized,” “confiscated,” “forfeited” unless the consignor is the original owner or their designated representative.
The U.C.C. or any other uniform act or federal or state law cannot be referenced in advertisements unless required by law.
References to federal, state, or local departments, agencies, or commissions cannot be made unless required by law or with approval from the agency.
Auctions cannot be advertised as under the auspices of, or required by, a government agency or department unless required by law.
Items cannot be advertised for sale if they are not intended to be offered at the advertised auction.
Auctioneers and auction firms must review the contents of the advertisement prior to publication to ensure it is compliant with G.S. 85B.

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Description

This quiz covers key regulations related to auction agreements, bidder registration, and bidding practices for auctioneers. It highlights the requirements for record-keeping and the responsibilities of auctioneers during sales. Test your understanding of the legal framework that governs auction activities.