California is a city that flourish, this progressive place is a promising spot for auctions. Both for auction companies and auction enthusiasts, California has a lot to offer. Let’s take a look at the fine prints of auction business in the State of California.
There is a security bond law for every auction company that plans to open in the state of California which is in favor of the people of the State of California and shall be for the benefit of any person or persons damaged by any fraud, dishonesty, misstatement, misrepresentation, deceit, unlawful acts or omissions, or failure to provide the services of the auctioneer or auction company in performance of the auction by the auctioneer or auction company or its agents, representatives, or employees while acting within the scope of their employment. The bond is amounting $20,000.00 and payable to the Secretary of State. Operating without securing the bond is strictly not allowed.
Bond cancellation must be submitted in formal writing to the Secretary of State thirty days prior to the termination of the surety bond. A new surety bond needs to be filed in case the auctioneer or an auction company needs to reinstate their license.
Advertisement includes any written or printed out ad used to promote an auction activity or any items or property to the public such as newspaper print out and other materials alike. This also includes the advertisement on the media platform such as the radio and television advertisement to always have the company name on it for further verification of the public.
Disclose his or her name, trade or business name, telephone number, and bond number in all advertising of auctions. A first violation of this subdivision is an infraction subject to a fine of fifty dollars ($50); a second violation is subject to a fine of seventy-five dollars ($75); and a third or subsequent violation is subject to a fine of one hundred dollars ($100). This section shall not apply to business cards, business stationery, or to any advertisement that does not specify an auction date.
Rules and Violation
Signage – Every auctioneer is required to post a sign, the dimensions of which shall be at least 18 inches by 24 inches, at the main entrance to each auction. First offense is a fine of $50, $75 for the second and a $100 for the third offense.
Terms & Condition – Make sure to provide every participating public bidder a hand outs, print out of the auction’s clear terms and condition, restrictions, and procedures whereby goods will be sold at the auction, and announce any changes to those terms, conditions, restrictions, and procedures prior to the beginning of the auction sale. First offense is a fine of $50, $75 for the second and a $100 for the third offense.
Notification for Changes – Any change with the location, changes in the board of directors and other vital changes needs to be notified to the Secretary of States 30 days prior to execution of change.
Records – Keep and maintain, at the auctioneer’s or auction company’s address of record, complete and correct records and accounts pertaining to the auctioneer’s or auction company’s activity for a period of not less than two years. The records shall include the name and address of the owner or consignor and of any buyer of goods at any auction sale engaged in or conducted by the auctioneer or auction company, a description of the goods, the terms and conditions of the acceptance and sale of the goods, all written contracts with owners and consignors, and accounts of all moneys received and paid out, whether on the auctioneer’s or auction company’s own behalf or as agent, as a result of those activities. A first violation of this subdivision is a misdemeanor subject to a fine of five hundred dollars ($500); and a second or subsequent violation is subject to a fine of one thousand dollars ($1,000).
Completion – Within 30 working days after a sale transaction of goods, pay or cause to be paid all moneys and proceeds due to the owner or the consignor of all goods that were the subject of an auction engaged in or conducted by the auctioneer or auction company, unless delay is compelled by legal proceedings or the inability of the auctioneer or auction company, through no fault of his or her own, to transfer title to the goods or to comply with any provision of this chapter, the Commercial Code, or the Code of Civil Procedure, or with any other applicable provision of law. A first violation of this subdivision is a misdemeanor subject to a fine of one thousand dollars ($1,000); a second violation is subject to a fine of one thousand five hundred dollars ($1,500); and a third or subsequent violation is subject to a fine of two thousand dollars ($2,000).
Basic Rules in an Auction
- Auction company must follow any given request (so long as it is reasonable and legal) of the consignor or the owner of the item or property that is being sold in the auction.
- Auctioneers must perform their duties so that the highest or most favorable offer made by a member of his or her audience is accepted, except to the extent that any item or sale is offered with reserve or subject to confirmation.
- Honest or truthful representation of every goods or products being sold at the auction company.
- Perform all the duties involved in accordance with the law of California State.
Every auctioneer who operates his or her own auction company as a sole proprietor, and every auction company, together with its owners, partners, and officers, that employs an auctioneer, shall be responsible for all violations committed by the auctioneer or by any company employee in the conduct of auction business. An auctioneer who is employed by an auctioneer or auction company shall be responsible for all violations committed by him or her in the conduct of auction business.
It is a violation of this title for any auctioneer or auction company, or the company’s owners, partners, and officers, to direct or knowingly permit any violation of this title by any auctioneer employed by or under contract with that auctioneer or auction company, or by any owner, partner, officer, agent, or employee of the auction company.