North Dakota Auction Law

North Dakota is home to Theodore Roosevelt National Park, known for its scenic beauty and natural wildlife.This state also holds the lowest rate of unemployment in the United States, this means that it is a very progressive area and promising for business. The auction laws here are listed below.

License

The initial and renewal application for an annual auctioneer’s or clerk’s license must be submitted on forms designated by the commission, and must show the name, residence, and address of the applicant. The fee for the annual license or renewal is fifty dollars and must accompany the application. The name and license number must appear on all advertising of sales conducted by an auctioneer or clerk. Renewals that are not received by December thirty-first must be assessed an additional twenty-five dollar fee. 

Before a license is issued to an auctioneer or clerk, the applicant must file a corporate surety bond with the commission. This bond must provide annual coverage of not less than five thousand dollars for an auctioneer or ten thousand dollars for a clerk, must run to the state of North Dakota, and must be for the benefit of any person injured by the licensee’s improper conduct. Bonds may not be canceled on less than sixty days’ written notice to the commission. 

When notice of cancellation is received by the commission, the commission, without hearing, shall revoke the license for which the bond was issued effective with the effective date of the cancellation, unless the licensee files a new bond or evidence that the bond will be reinstated before the effective date of the cancellation. The size of the licensee’s bond must be clearly and prominently stated in all contracts with sellers.

Licenses may be granted only to persons who bear a good reputation for honesty, truthfulness, and fair dealing and who are competent to transact the business of an auctioneer or a clerk. An applicant for a license must be at least eighteen years of age. Every applicant for a license as an auctioneer have been actively engaged as a licensed auctioneer for a period of at least one year preceding the date of application. Furnish proof of satisfactory completion of an approved course of study relating to auctioneers. The commission may request a first-time applicant for a license to pass a criminal background check. An applicant shall pay the costs associated with the performance of a criminal background check. 

Grounds for Refusal, Suspension, or Revocation of License

The public service commission upon its own motion may, and upon the verified complaint in writing of any person shall, investigate the activities of any licensee or any person who shall assume to act in such capacity within the state and shall have the power to suspend or revoke a license when the licensee, in performing or attempting to perform any of the acts included within the scope of this chapter, has performed one or more of the following: 

  • Made a material false statement in the licensee’s application for a license or in any information furnished to the commission. 
  • Made a substantial and willful misrepresentation relating to an auction sale which injures the party for which the licensee acts as agent.
  • Made any false promise of a character such as to influence, persuade, or induce a party to an auction sale to that party’s injury or damage.
  • Failed to account for or to remit, within a reasonable time, not exceeding thirty days, any moneys coming into the licensee’s possession belonging to another, commingled funds of others with the licensee’s own, failed to keep such funds or others in an escrow or trust account with a bank or other recognized depository in this state, or failed to keep records relative to the deposits, which must contain such information as prescribed by the rules of the commission.
  • Pled guilty or nolo contendere before, or been convicted by, any federal court or a court of competent jurisdiction in this or any other state of an offense determined by the commission to have a direct bearing upon a person’s ability to serve the public as an auctioneer, or the board determines, following conviction of any offense.
  • Failed or refused upon demand to produce any document, book, or records in the licensee’s possession or under the licensee’s control, concerning any auction sale under investigation by the commission.
  • Failed to deliver to the seller in every auction sale a complete, detailed closing statement showing all the receipts and disbursements handled by such licensee for the seller and to retain true copies of such statements in the licensee’s files for two years.

Written Contracts

An auctioneer may not sell the property of another at auction without a prior written contract with the seller which sets forth the terms and conditions upon which the auctioneer will sell the property. A similar contract governing the activities of the auction clerk is required between the auction clerk and the seller. The licensee must retain a copy of each contract for at least two years after the auction. This section does not apply to consignment sales when the value of the seller’s property is less than five hundred dollars or to livestock markets. The contract must contain:

  • The licensee’s name, trade or business name, state license number, business address, and business telephone number.
  • A general description of the property to be sold at auction, any restrictions, and a statement identifying whether or not the licensee is authorized to purchase at the auction.
  • A description of the services to be provided and the consideration for the services. The description must state which party is responsible for advertising and other expenses. 
  • The date or dates when the items will be sold at auction.
  • A disclosure of the amount of bond that the licensee has on file with the commission and the commission’s address and telephone number.

Buyer’s Premium

A successful bidder may not be required to pay an amount in excess of the successful bid and governmental fees and taxes, unless before bidding the bidder has signed a statement which clearly describes the additional amount and states how the actual amount due will be determined.

Fund Handling

Separate trust account designated as such in a federally insured bank or other federally insured depository in this state in which the clerk immediately shall deposit all funds not the clerk’s own, including funds in which the clerk may have some future interest or claim. A federally insured depository located outside the state but licensed as a clerk in this state is not required to deposit funds in a depository in this state if auction sale funds are deposited in a separate trust account designated as such in the licensee’s depository. A clerk may not commingle the clerk’s personal funds or other funds in a trust account except that a clerk may deposit and keep a sum of one thousand dollars in such an account from the clerk’s personal funds, which sum must be specifically identified and deposited to cover service charges related to the trust account. In conjunction with such an account, the clerk shall maintain at the clerk’s usual place of business books, records, and other documents so that the adequacy of such an account may be determined at any time. Trust accounts and other records must be open to inspection by the public service commission and its duly authorized agents at all times during regular business hours at the clerk’s usual place of business.

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