21 NCAC Section .06 General Auctioneering PDF

**SECTION.0600 - GENERAL AUCTIONEERING** **21 NCAC 04B.0601 CHANGE OF ADDRESS OR BUSINESS NAME OR OWNERSHIP** a. All licensees shall notify the Board in writing of each change or addition of residence or business address, including mailing address, and change of trade name, assumed name,...

**SECTION.0600 - GENERAL AUCTIONEERING** **21 NCAC 04B.0601 CHANGE OF ADDRESS OR BUSINESS NAME OR OWNERSHIP** a. All licensees shall notify the Board in writing of each change or addition of residence or business address, including mailing address, and change of trade name, assumed name, or combination of names under which the licensee conducts business related to auctions. b. In the case of a corporate license, the licensee shall notify the Board of any change in the directors or officers of the corporation. The new director(s) or officer(s) shall comply with the provisions of 21 NCAC 04B.0201(d)(2)(A), (B), (D), (E), and (F). If the new directors or officers have a 51% or greater controlling interest in the corporation, the firm license shall be retired and the firm shall apply for a new license. c. In the case of a partnership license, the licensee shall notify the Board of any change in partners and such new partners shall comply with the provisions of 21 NCAC 04B.0201(d)(2)(A), (B), (D), (E), and (F). d. In the case of an auction firm license, the licensee shall notify the Board of any change in a designated person(s). If the designated person is a currently licensed auctioneer under G.S 85B, the designated person shall be required to comply with the provisions of 21 NCAC 04B.0201(d)(2)(A), (B), (D), (E), and (F). If the designated person is not a currently licensed auctioneer under G.S. 85B, the designated person shall be required to comply with the provisions of 21 NCAC 04B.0201(d)(2)(A), (B), (D), (E), and (F). e. Any changes of reported information required by this Rule shall be reported within 10 days of the occurrence of such change. *History Note: Authority G.S. 85B-3.1; Eff. November 1, 1984;* **21 NCAC 04B.0602 ADVERTISING** a. In all advertisements relating to an auction, the auctioneer\'s, apprentice auctioneer\'s, or auction firm\'s name and license number shall be given. If an auctioneer is working for or in conjunction with an auction firm, the relationship shall be disclosed and both license numbers shall be given. A general advertisement that does not concern a specific sale or specific sales and that does not list sale dates, times, or locations, referred to as \"trolling\" or \"holding\" advertisements, shall not be subject to any identification requirement. A licensee may advertise under a name, assumed name, trade name, or combination of names, only if written notice has been filed with the Board. b. Any licensee who advertises an \"Estate Sale\" shall disclose, in all advertisement materials, whether it is the estate of a living or deceased person. Before conducting an auction as an \"estate sale,\" the majority of items in the sale shall come from the estate of the living or deceased person(s). Other items not related to or in an estate may be sold with an estate if disclosed at or before the time of the auction. c. It shall be a violation of this Rule to advertise a \"Bankruptcy Sale\" unless the item(s) offered for sale, whether real or personal, are from an active bankruptcy action. Before conducting an auction as a \"bankruptcy sale,\" the majority of the items in the sale shall come from the bankruptcy of one or more parties. Other items not related to or from a bankruptcy action may be sold with items from a bankruptcy action if disclosed at or before the time of the auction. d. It shall be a violation of this Rule to advertise an item, either real or personal, as \"Absolute\" or \"Without Reserve\" if the item is subject to confirmation, minimum bid, or any other condition of sale. Before advertising an auction as absolute or without reserve, the majority of items in the sale shall be offered for sale absolute or without reserve. Items that are not absolute may be included in the auction provided they are designated as such in all announcements and advertisements. e. It shall be a violation of this Rule to advertise any auction using such descriptive words as \"Urgent,\" \"Emergency,\" \"Distress\" or any other word that connotes liquidation of assets or that the buyers will be in a position to reap some unusual bargain without disclosing, in the written advertisement in a print size equal to the descriptive word, the reason that the sale is \"urgent,\" the nature of the \"emergency,\" or the cause of the \"distress.\" f. It shall be a violation of this Rule to advertise any auction using such descriptive words as \"Seized,\" \"Confiscated,\" \"Forfeited,\" or any other word that connotes a governmental action whereby items are seized or taken by a government department, agency, or commission and released or sold or that the buyers will, for some governmental reason, be in a position to reap some unusual bargain without disclosing, in the written advertisement in a print size equal to the descriptive word, the exact nature of the government action. g. It shall be a violation of this Rule to advertise any items as being from an \"estate\" or a \"bankruptcy,\" or from an \"urgent,\" \"emergency,\" \"distress,\" \"seized,\" \"confiscated,\" \"forfeited,\" or similar sale, unless the consignor of the item(s) to be sold is the original owner of the item(s), the designated representative of the owner, or a federal, state, or local department, agency, or commission charged with disposing of the item(s), and consigned the item(s) directly to the advertised sale. h. It shall be a violation of this Rule to: 1. Reference the U.C.C. or any other uniform act or federal or state law in any advertisement unless the act or law is required, by law, to be referenced; 2. Reference or mention any federal, state, or local department, agency, or commission in any advertisement unless required by law to do so or unless prior written approval is received from such department, agency, or commission; or 3. Otherwise connote in any advertisement that the auction is under the auspices of, at the direction of, or required by federal or state law or act or a federal, state, or local department, agency, or commission and that the buyers will, for some legal or governmental reason, be in a position to reap some unusual bargain. i. It shall be a violation of this Rule to advertise for sale items that the auctioneer/firm does not intend to offer for sale at the advertised auction. j. It shall be a violation of this Rule for an auctioneer or auction firm to permit its name or license number to appear on any advertisement for an auction without reviewing the contents of the advertisement prior to its publication to ascertain its compliance with G.S. 85B and this Subchapter. k. It shall be a violation of this Rule to advertise any auction using such descriptive words as \"Contents,\" \"Stock,\" \"Inventory,\" \"Liquidation,\" or any other word that connotes that the items to be auctioned are present on the premises of a residence, business, building, or establishment unless the items were physically present without interruption for 30 days prior to the signing of the contract or written agreement. Before conducting an auction using any of the descriptive words, the majority of the items in the sale shall be from the premises. Other items not related to or from the contents of the residence or business may be included in the auction provided they are designated as such in all advertisements previous to the sale. The 30-day requirement shall not apply to items used in direct conjunction with the residence or business and brought to the site solely for the purpose of sale at auction. l. At all auctions that include a buyer\'s premium, the amount of the buyer\'s premium shall be announced at the beginning of the auction and a written notice of this information shall be displayed or distributed to the public at the auction site. *History Note: Authority G.S. 85B-1; 85B-3.1; 85B-8(a)(4);* **21 NCAC 04B.0603 SALE PROCEEDS, ACCOUNTING AND ESCROW ACCOUNTS** a. Each payment made payable to the auctioneer/firm of which any portion belongs to others, and not disbursed to the seller on auction day, shall be deposited in an escrow account for the benefit of the owner or seller of such property within three business days after receipt of same. b. Any licensee who disburses any funds on auction day shall 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). c. Every auctioneer/firm that does not disburse all funds to the seller on auction day shall establish and maintain a separate bank account designated as \"Custodial Account for Sellers Proceeds\" or some similar identifying designation, to disclose that the depositor is acting as a fiduciary and that the funds in the account are trust funds. (d) Custodial accounts created pursuant to Paragraph (c) of this Rule shall be established and maintained in banks, credit unions, or savings and loan associations located in North Carolina whose deposits are insured by the Federal Deposit Insurance Corporation, or comparable state or federal recognized insurance agency or program. e. The custodial account created pursuant to Paragraph (c) of this Rule shall be drawn on only for payment of: (1) the net proceeds to the seller, or to any person that the auctioneer/firm knows is entitled to payment; 2. to pay charges against the property that the auctioneer/firm in its agency capacity is required to pay; and 3. to obtain any sums due the auctioneer/firm as compensation for its services. f. In the event of a dispute between the seller and buyer of goods or property or between the licensee and any person in whose name trust or escrow funds are held, the licensee shall retain the monies in his or her trust or escrow account until he or she has obtained a written release from the parties consenting to its disposition or until disbursement is ordered by a court of competent jurisdiction. g. Each auctioneer/firm shall keep accounts and records that document the handling of funds in a custodial account created pursuant to Paragraph (c) of this Rule. Accounts and records shall disclose the names of buyers and the amount of purchase and payment from each, the names of the sellers, and the amount due and payable to each from funds in the custodial account created pursuant to Paragraph (c) of this Rule. The names of the buyers and amount of purchase and payment from each buyer related to an individual seller shall be delivered to the seller within 14 days of a written request made within 90 days of settlement of a specific auction. h. All trust or escrow account records and records of disbursement shall be available for inspection by the Board staff without advance notice, and copies shall be provided to the Board upon request. *History Note: Authority G.S. 85B-7.1; 85B-8(a);* **21 NCAC 04B.0604 CONTRACTS, CONSIGNMENT RECORDS, SALES RECORDS, AND BIDDER REGISTRATION RECORDS** a. All written agreements for auctions and registration, sales, and accounting records shall be maintained at the site during the conduct of the auction and, upon request, shall be made available to the Board or its staff. b. An auction house, auction barn, or auction gallery business may enter into a written agreement with repeat dealers or sellers for an extended period of time, not to exceed one year. c. The consignment records and sales records shall be kept by the licensee for a period of two years from the date of the auction. d. At an auction house, auction barn, or auction gallery, when consignments are brought to the location by the public during that specific auction sale, the sales records and the consignment records may be the same. e. The bidder registration records shall contain the bidders\' names, addresses, telephone numbers, and email addresses. The bidder registration records shall be kept by the licensee for a period of two years from the date of the auction. f. All required records shall be open for inspection by the Board or its designated agent at reasonable times, or copies of the same shall be provided to the Board or its designated agent upon written request. g. In auctions of consigned property, any buyer\'s premium shall be calculated, collected, and distributed according to terms authorized by the consignor in a written auction contract. *History Note: Authority G.S. 85B-7; 85B-7.1; 85B-8;* **21 NCAC 04B.0605 BIDDING** a. No auctioneer/auction firm shall bid on items in a sale he or she is conducting or procure the bid without the intent to purchase the item. However, in a sale with reserve, the auctioneer/auction firm may bid on the reserve item up to, and including, the amount of the reserve price without the intent to purchase the item. In any auction where the auctioneer/auction firm bids or such auctioneer/auction firm procures such a bid, the auctioneer shall announce such bidding in advance of the auction. b. A minimum opening bid shall not be required in an absolute auction. Following an opening bid, the auctioneer may set reasonable minimum bid increments. Such a policy shall be disclosed in the auctioneer\'s/auction firm\'s spoken, posted, and written terms and conditions of the sale. In this Paragraph \"reasonable minimum bid increments\" shall be determined by the auctioneer or auction firm, based on the type and value of the property being offered at an auction. *History Note: Authority G.S. 25-2-328(4); 85B-1; 85B-3.1; Eff. January 1, 1995;* **21 NCAC 04B.0606 AUCTION FIRMS** a. All licensed auction firms shall have at least one Board-approved designated person as defined by G.S. 85B1(10). If a licensed auction firm does not have at least one Board-approved designated person, it shall not engage in auctioneering activity. b. Only Board-approved designated person(s) for an auction firm shall have the authority to transact business under the firm license. This includes arranging, managing, soliciting, and contracting auctions; the supervision of the auction staff; the supervision of the acceptance of consignments of items for sale at auction; the supervision of the advertising of an auction; and the supervision of the acceptance of payment and disbursement of monies for items sold at auction. c. At least one designated person shall be on the premises of an auction firm\'s auction sale location while the auction sale is conducted. d. Any auctioneer licensed under G.S. 85B may call bids for a licensed auction firm without being a designated person. e. Any apprentice auctioneer licensed under G.S. 85B and supervised by his or her supervising auctioneer may call bids for a licensed auction firm without being a designated person. f. Individuals that hold a currently valid real estate broker license shall be exempt from the auction firm examination. Their authority to transact business as a designated person under the auction firm license is limited to real estate sales at auction. *History Note: Authority G.S. 85B-1; 85B-3.1; 85B-4;* **21 NCAC 04B.0607 SOLE PROPRIETOR AUCTION BUSINESSES** a. A licensed auctioneer who owns and operates a sole proprietor auction business has the responsibility for arranging, managing, soliciting, and contracting auctions; the supervision of the auction staff; the supervision of the acceptance of consignments of items for sale at auction; the supervision of the advertising of an auction; and the supervision of the acceptance of payment and disbursement of monies for items sold at auction. b. A licensed auctioneer or an apprentice auctioneer who is employed or contracted by another licensed auctioneer who owns and operates a sole proprietor auction business shall only be responsible for calling bids and performing duties that a non-auctioneer is allowed to perform. c. A licensed auctioneer who owns and operates a sole proprietor auction business shall be on the premises of his or her businesses\' auction sale location while the auction sale is conducted. *History Note: Authority G.S. 85B-1; 85B-3.1;*