Texas Auction Law

The saying that everything is bigger in Texas likely originated as a reference to the enormity of the state’s geographical area. In terms of square miles, Texas is second only to Alaska in size, and it is the largest of the contiguous 48 states. Texas is also home for various successful auction houses there in America, let’s take a look at their auction laws within the state.

License

A person may not act as an auctioneer or associate auctioneer in this state unless the person holds a license issued by the executive director. An individual is eligible for an auctioneer’s license if the individual is above 18 yrs. old, a citizen of the United States or a legal alien. They also need to pass a written or oral examination demonstrating knowledge of the auction business and of the laws of this state relating to the auction business or showing proof of employment by a licensed auctioneer for at least two years and participation in at least 10 auctions during that employment.

The applicant must complete at least 80 hours of classroom instruction at an auction school with a curriculum approved by the department in accordance with the standards and procedures established by rule. The department, as provided by rule, may charge an auction school a reasonable fee for approving the curriculum as required.

An individual who establishes that the individual is eligible for an auctioneer’s license may apply to the executive director to take the licensure examination. The application must be accompanied by the application fee. 

A person commits an offense if the person acts as an auctioneer without a license. An offense under this is a Class B misdemeanor.

Denial of License

The commission or executive director may deny an application for a license or suspend or revoke the license of any auctioneer for:

  • Obtaining a license through false or fraudulent representation.
  • Making a substantial misrepresentation in an application for an auctioneer’s license.
  • Engaging in a continued and flagrant course of misrepresentation or making false promises through an agent, advertising, or otherwise.
  • Failing to account for or remit, within a reasonable time, money belonging to another that is in the auctioneer’s possession and commingling funds of another with the auctioneer’s funds or failing to keep the funds of another in an escrow or trust account.
  •  Violating a provision of the Business & Commerce Code in conducting an auction.

Fees

The applicant entitled to receive a license must pay a fee before the executive director issues the license. If the balance in the fund on December 31 of a year is less than $350,000, each license holder at the next license renewal shall pay, in addition to the renewal fee, a fee that is equal to the greater of $50 or a pro rata share of the amount necessary to obtain a balance in the fund of $350,000. 

Consumer Claims

A person who deals with an auctioneer licensed under this chapter and who is aggrieved by an action of the auctioneer as a result of a violation of a contract made with the auctioneer may initiate a claim against the fund by filing with the department a complaint against the auctioneer.

The executive director may not pay a claim against an auctioneer who was not licensed at the time of the transaction on which the claim is based. The department shall investigate a complaint filed under this section and determine the amount owed to the aggrieved party.

If the executive director pays a claim against an auctioneer, the auctioneer shall  reimburse the fund immediately or agree in writing to reimburse the fund on a schedule to be determined by rule of the commission and  immediately pay the aggrieved party any amount due to that party or agree in writing to pay the party on a schedule to be determined by rule of the commission.

Investigation of Complaints

The executive director may, on the executive director’s motion, and shall, on the written complaint of a person aggrieved by the actions of an auctioneer in an auction, investigate an alleged violation by a licensed or unlicensed auctioneer or an applicant.

If the amount determined by the department is disputed by the auctioneer or the aggrieved party, the department shall refer the matter to the State Office of Administrative Hearings for a hearing on the disputed claim. A party may appeal a decision of the commission in the manner provided for a contested case

Revocation of Claims 

The commission may revoke a license issued if the executive director makes a payment from the fund as the result of an action of the license holder. The commission may probate an order revoking a license. An auctioneer is not eligible for a new license until the auctioneer has repaid in full the amount paid from the fund on the auctioneer’s account, including interest, unless a hearing is held; and the executive director issues a new probated license.

Before denying an application for a license, the commission or executive director shall set the matter for a hearing to be conducted by the State Office of Administrative Hearings; and before the hearing date, notify the applicant in writing of the charges alleged or the question to be determined at the hearing; and the date and location of the hearing.

At a hearing, the applicant may be present and be heard in person or by counsel; and have an opportunity to offer evidence by oral testimony, affidavit, or deposition. Written notice may be served by personal delivery to the applicant or by certified mail to the last known mailing address of the applicant.

If the executive director pays a claim against an auctioneer, the department is subrogated to all rights of the aggrieved party against the auctioneer to the extent of the amount paid to the aggrieved party.

The commission’s or executive director’s authority shall take disciplinary action against a license holder for a violation of this chapter or a rule adopted here. A license holder’s repayment of all amounts owed to the fund does not nullify or modify the effect of another disciplinary proceeding brought.

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