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The gun market (demand) is high these days. In fact, it’s hard to think back to when there wasn’t a strong market for guns. Auctioneers often find themselves in situations where clients have guns to sell, and wish the auctioneer’s help. Auctioneers need to be careful, and thus this guide.
Being careful is paramount. Only one case need be talked about to remind all auctioneers that selling guns at auction requires strict adherence to all applicable laws. Thus, we have the Burkheimer case:
- Auctioneer R.C. Burkheimer, of North East, M.D., tried to do everything right for a gun auction he had in 1978, but he ended up going to jail.
- He sold the inventory of a small gun shop owned by a licensed gun dealer who was also a member of the Maryland State Police. Because the shop was small, Burkheimer suggested they bring the guns to his auction gallery where they would have ample parking, seating and restroom facilities.
- The Auctioneer did almost everything right-the dealer stayed on site with the guns at all times and filled out all the paperwork. But the Auctioneer missed one detail: the dealer transferred ownership of the firearms at the auction gallery. Federal law says that transfer of ownership must occur at the place where the Federal Firearms License is issued, which would have been the dealer’s shop.
- Because Burkheimer didn’t personally hold a FFL and he conducted the transfer of firearms on his premises, he was convicted of a felony. He spent 18 months in a federal penitentiary and sustained $250,000 in fines and legal fees.
Do we have your attention?
The sale of guns is regulated, first, by the federal government in the United States. Then, states can have (and do have) additional laws that regulate the sale and/or transfer of guns. Too, some local laws have been enacted by cities, counties, townships, etc. Auctioneers need to be attentive to Brall the laws that are applicable for any sale or transfer of guns.
First, most notably, there are four federal gun acts to consider:
- The Gun Control Act of 1968, Pub. L. No. 90-618, 82 Stat. 1213 (also known as GCA or GCA68, and codified as Chapter 44 of Title 18, United States Code) is a federal law in the United States that broadly regulates the firearms industry and firearms owners. It primarily focuses on regulating interstate commerce in firearms by generally prohibiting interstate firearms transfers except among licensed manufacturers, dealers and importers.
- The Firearm Owners’ Protection Act (FOPA), Pub. L. No. 99-308, 100 Stat. 449 (May 19, 1986), codified at 18 U.S.C. § 921 et seq., is a United States federal law that revised many statutes in the Gun Control Act of 1968.
- The Brady Handgun Violence Prevention Act (Pub.L. 103-159, 107 Stat. 1536) was an Act of the United States Congress that, for the first time, instituted federal background checks on firearm purchasers in the United States. It was signed into law by President Bill Clinton on November 30, 1993, and went into effect on February 28, 1994. The Act was named after James Brady, who was shot by John Hinckley, Jr. during an attempted assassination of President Ronald Reagan on March 30, 1981.
- The Federal Assault Weapons Ban (AWB) (or Public Safety and Recreational Firearms Use Protection Act) was a subtitle of the Violent Crime Control and Law Enforcement Act of 1994, a federal law in the United States that included a prohibition on the sale to civilians of certain semi-automatic firearms, so called “assault weapons.” There was no legal definition of “assault weapons” in the U.S. prior to the law’s enactment. The ten-year ban was passed by Congress on September 13, 1994 and was signed into law by President Bill Clinton the same day. The ban only applied to weapons manufactured after the date of the ban’s enactment. The Federal Assault Weapons Ban expired September 13, 2004, as part of the law’s sunset provision. It is important only here because there are recent efforts to reenact similar AWB laws.
Now, here is the exact text of Title 18 § 923 and Rule 96-2 of the United States Code:
18 U.S.C. § 923 (a): ENGAGING IN THE BUSINESS OF DEALING IN FIREARMS (Auctioneers)
Auctioneers who regularly conduct consignment-type auctions of firearms, for example, held every 1-2 months, on behalf of firearms owners where the auctioneer takes possession of the firearms pursuant to a consignment contract with the owner of the firearms giving the auctioneer authority to sell the firearms and providing for a commission to be paid by the owner upon sale of the firearms are required to obtain a license as a dealer in firearms.
ATF Rul. 96-2
An association of auctioneers has asked the Bureau of Alcohol, Tobacco and Firearms (ATF) for a ruling concerning the auctions conducted by their members and whether the sale of firearms at such auctions requires a Federal firearms license as a dealer in firearms.
The auctioneers’ association stated that their members generally conduct two types of auctions: estate-type auctions and consignment auctions. In estate-type auctions, articles to be auctioned, including firearms, are sold by the executor of the estate of an individual. In these cases the firearms belong to and are possessed by the executor. The auctioneer acts as an agent of the executor and assists the executor in finding buyers for the firearms. The firearms are possessed by the estate and their sale to third parties is controlled by the estate. The auctioneer is paid a commission on the sale of each firearm by the estate at the conclusion of the auction.
The association states that, in consignment-type auctions, an auctioneer may take possession of firearms in advance of the auction. The firearms are inventoried, evaluated, and tagged for identification. The firearms belong to individuals or businesses who have entered into a consignment agreement with the auctioneer giving the auctioneer authority to sell the firearms. The agreement states that the auctioneer has the exclusive right to sell the items listed on the contract at a location, time, and date to be selected by the auctioneer. The consignment-type auctions generally involve accepting firearms for auction from more than one owner. Also, these auctions are held on a regular basis, for example, every 1-2 months.
Section 923(a), Title 18, U.S.C., provides that no person shall engage in the business of dealing in firearms until he has filed an application and received a license to do so. Section 922(a)(1), Title 18, U.S.C., provides that it is unlawful for any person, other than a licensee, to engage in the business of dealing in firearms. Licensees generally may not conduct business away from their licensed premises.
The term “dealer” is defined at 18 U.S.C. § 921(a)(11)(A) to include any person engaged in the business of selling firearms at wholesale or retail. The term “engaged in the business” as applied to a dealer in firearms means a person who devotes time, attention, and labor to dealing in firearms as a regular course of trade or business with the principal objective of livelihood and profit through the repetitive purchase and resale of firearms. A dealer can be engaged in the business” without taking title to the firearms that are sold. However, the term does not include a person who makes occasional sales, exchanges, or purchases of firearms for the enhancement of a personal collection or for a hobby, or who sells all or part of his personal collection of firearms. 18 U.S.C. § 921(a)(21)(C).
In the case of estate-type auctions, the auctioneer acts as an agent of the executor and assists the executor in finding buyers for the estate’s firearms. The firearms are possessed by the estate, and the sales of firearms are made by the estate. In these cases, the auctioneer does not meet the definition of “engaging in the business” as a dealer in firearms and would not require a license. An auctioneer engaged in estate-type auctions, whether licensed or not, may perform this function, including delivery of the firearms, away from the business premises.
In the case of consignment-type auctions held on a regular basis, for example, every 1-2 months, where persons consign their firearms to the auctioneer for sale pursuant to an agreement as described above, the auctioneer would be “engaging in the business” and would require a license. The auctioneer would be disposing of firearms as a regular course of trade or business within the definition of a “dealer” under §_921(a)(11)(A) and must comply with the licensing requirements of the law.
As previously stated, licensed auctioneers generally must engage in the business from their licensed premises. However, an auctioneer may conduct an auction at a location other than his licensed premises by displaying the firearms at the auction site, agreeing to the terms of sale of the firearms, then returning the firearms to the licensed premises for delivery to the purchaser.
Held:
Persons who conduct estate-type auctions at which the auctioneer assists the estate in selling the estate’s firearms, and the firearms are possessed and transferred by the estate, do not require a Federal firearms license.
Held further:
Persons who regularly conduct consignment-type auctions, for example, held every 1-2 months, where the auctioneer takes possession of the firearms pursuant to a consignment contract giving the auctioneer the exclusive right and authority to sell the firearms at a location, time and date to be selected by the auctioneer and providing for a commission to be paid upon sale are required to obtain a license as a dealer in firearms pursuant to 18 U.S.C. § 923(a). [ATFB 96-2 101]
What does all this mean?
Here’s some rules auctioneers can remember:
- For auctioneers without an FFL
- OR
- For auctioneers with an FFL acting as auctioneers without an FFL:
- Don’t sell a short gun (i.e. pistol or revolver) to anyone under the age of 21.
- Don’t sell a long gun (i.e. rifle or shotgun) to anyone under the age of 18.
- Only sell guns, or facilitate such sales, to in-state buyers (unless the buyer is an FFL.)
- Only assist someone with the sale of their guns (and not repeatedly assist someone with the sale of their guns), without taking possession of them, with the seller maintaining possession of the guns until they are transferred to the buyers.
- Secure buyer information such as age, positive ID, address, phone, etc. and use the ATF form 4473 (or similar form) to have the purchaser answer questions about if they are a convicted felon, illegal alien, under indictment, etc. This lessens the risk of the auctioneer being held responsible for selling a gun to someone who cannot legally take possession.
- Be sure all guns are unloaded, and secured so they cannot be loaded by someone else.
- Have gun locks available to buyers.
- Be alert to “straw purchasers,” where a person is bidding for someone else, such as an illegal act of purchasing for an out-of-state buyer, or convicted felon, etc.
- Auctioneers with an FFL, acting as an FFL:
- Don’t sell a short gun (i.e. pistol or revolver) to anyone under the age of 21.
- Don’t sell a long gun (i.e. rifle or shotgun) to anyone under the age of 18.
- Only transfer guns from their licensed location. Guns could be “sold” at another location, but would have to be moved back to the licensed location for ultimate transfer by the licensee.
- Use the ATF form 4473 to have a background check initiated for a pending gun transfer. The ATF will respond with a “proceed,” “delay” or “deny.”
- Use the ATF form 3310 “Report of Multiple Sale or Other Disposition of Pistols or Revolvers” when selling two or more hand guns to one buyer within five business days.
- Transfer long guns to in-state buyers or out-of-state buyers either directly or via another FFL, so long as state and local law involved (the state/local laws where the gun is sold, and the state/local laws where the gun is going) doesn’t prohibit such a transfer.
- Transfer short guns directly to in-state buyers, or via another FFL for out-of-state buyers, so long as state and local law involved (the state/local laws where the gun is sold, and the state/local laws where the gun is going) doesn’t prohibit such a transfer.
- Maintain a gun dealer log book noting all transfers.
- Make sure all guns are unloaded, and secured so they cannot be loaded by someone else.
- Have gun locks available to buyers (at no charge.)
- Be alert to “straw purchasers,” where a person is bidding for someone else, such as an illegal act of purchasing for an out-of-state buyer, or convicted felon, etc.
- Auctioneers with an FFL may (and auctioneers without an FFL may not):
- Engage in the business of selling firearms
- Possess firearms belonging to others
- Buy and sell firearms, as a business
- Hold oneself out as a dealer in firearms
- Make a living in dealing in firearms
- Repeatedly assist the same seller with the sale of their firearms
- Conduct a firearm consignment auction, or take firearm consignments
One area not covered in the federal code is antique firearms. Auctioneers can sell to out-of-state buyers without a license, as long as the firearm meets the federal definition. An antique is described in the U.S. Firearms Code as any firearm with a matchlock, flintlock or percussion cap manufactured in or before 1898, or a replica of such item. Auctioneers can also sell a firearm without a license if it uses a ring-fire or conventional center-fire fixed ammunition that is no longer manufactured in the United States or is not readily available in the ordinary channels of commercial trade.
Another somewhat confusing issue for auctioneers is when a court issues a court order to sell guns — and the order is not in compliance with federal law. Customarily, court orders override and supersede law. However, if the court is a state court or local court, they would not have the authority to override federal law per Article IV of the United States Constitution. A federal court order would likely suffice as an exception to federal laws regarding the sale or transfer of guns.
In almost all cases, it would be advisable for auctioneers to secure competent legal counsel if they find they are ordered by any court to sell guns, and especially if that court order is contrary to any federal, state or local gun laws.
Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, Keller Williams Auctions and Goodwill Columbus Car Auction. His Facebook page is: www.face book.com/mbauctioneer. He is Executive Director of The Ohio Auction School.
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Question, as a Auctioneer without a FFL, can I hold a one time consignment gun auction at a fairgrounds and have a FFL dealer there on site to do background checks ect or do I personally have to have the FFL?
Just trying to cover all my bases.
Based on your question specifically, the answer is, “Yes.” Although there are issues:
No guns would be able to be distributed to any purchasers at the fairgrounds. FFL’s may only distribute guns from their licensed location.
All guns would have to remain in the possession of the owners and/or the FFL at all times. If they dropped the guns off the night before, and the FFL didn’t stay the night, you might well be deemed acting as an FFL without a license.
Even if you had an FFL, you couldn’t distribute guns at the fairgrounds since that probably wouldn’t be your licensed location either.
Best solution? Get an FFL and hold the auction at your licensed location. If not, find an auctioneer with an FFL and refer the guns to him or her.
Hi Mike-
Thank you for this valuable information. On a matter unrelated to auctions, I have attended “Gun Shows” where FFLs routinely sell all types of weapons from a “Trade Show” type of environment. The FFLs conduct the required FBI instant background check and filled out the necessary forms on site. Many lawful holders of MA firearms licenses purchase and take delivery firearms, new & used, at these shows. Are there special allowances for gun shows, or are the FFLs who routinely participate operating in violation of the law? Thank you for your assistance.
Great Q Tom. Here’s the ATF’s view on this http://www.atf.gov/training/firearms/ffl-educational-seminars/transcript-gun-show-dos-and-donts.html
That’s excellent information. Thank you for responding so quickly. It’s good to know there are situations where the ATF considers a given “environment” an extension of the “Place of business” within certain parameters. Back to the subject of auctions, my firm was recently approached by an FFL who has a relationship with a MA municipal police department that would like to conduct a sale of confiscated weapons. Our responsibility as an auction firm would be to register the bidders, collect earnest deposits, call/ clerk the sale, then cash out the winning bidders. The FFL would handle the inventory in/ out, descriptions, paperwork, FBI checks, biometric scans and delivery to the winning bidders. The municipal police department would like to conduct the auction at their facility. Would the FFL need to complete the paperwork and deliver the firearms from the facility for which they are licensed following the sale, or are there special circumstances for the sale of police confiscated firearms at auction? Given the description of our responsibilities, are we proposing to perform any functions that should be handled by the FFL? Thank you again for your assistance.
Tom,
From my understanding, the FFL would have to distribute from his/her licensed location. I think the “Gun show” exemption is just that.
Mike
I’ll double check with the ATF and Firearms Record bureau as the auction draws closer, but I do believe you are correct. Your time and expertise is much appreciated. Thanks again.
Mike, I am sorry if this question seems redundant but we have an auction house where he hold bi-weekly consignment auctions of collectibles, antiques and household items. My partner is wanting to have a gun and ammo auction. But if I’m reading this correctly we can’t have a consignment gun auction because we don’t have a FFL. Is that correct. Is there any way we can have a gun auction without getting a FFL? I don’t anticipate us doing another one any time this year. Thanks for all of your help.
Jamey
Hi Jamey,
I assume your auction house is in the United States? If so, then yes, you must have an FFL to have a “consignment gun auction” as this constitutes engaging in the business. I would suggest the risks of going ahead and having it without an FFL are clearly outweighed by the possibility of a substantial fine and/or prison time.
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If I have a consignment auction (not in an auction house) with hundreds of other items and 4 people want to have me sell some guns for them, they bring it to the auction, they maintain possession at all times, before, during and after the sale until they transfer it to a buyer, AND if I or any of my auction crew never touch the gun AND the consignment contract is a non-exclusive contract (they could sell the gun prior to the auction), can you see any violation of Federal Firearms laws? As I understand it, I am merely assisting the seller in obtaining the highest price for their guns.
As I have read all of your earlier responses, I don’t see any violations by doing the auction in this manner. I plan on doing just that this weekend and would appreciate a fast response to my email address..
Thank you
Steve
Steve,
I would be careful. Even though you would not be taking possession of the guns, you could be perceived as “engaged in the business” due to your consignment auction.
The ATF regularily uses the words “consignment auction” to signal a requirement of an FFL. Becasuse such events are well publisized, it’s difficult to argue that you wouldn’t be “holding youself out” as a gun dealer.
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Great blog keep writing more blogs in the future!
Mike,
I was recently approached by a local attorney to contact a client of his and sell about 30 hand and long guns. No destructive type, mostly collector and ” everyday” pieces. The property is in a trust and the trustee would be hiring me. Since I have an auction gallery, the trustee would prefer to offer the guns here, (parking and security issues at the residence), along with the other articles from the trust. As long as I do not have any other consignors in this auction, could I offer the guns at my gallery?
One issue I see, is that; if this is not considered an “estate” auction, I could not take possession of the guns and therefore would have to ask the seller to bring them in the day of the auction, stay with them the entire time, and deliver them personally to the buyer.
The trustee is a woman (the original deceased trustee’s wife), and she does not want to be present for the auction. She wants her sons to handle it. I believe they’ll need a power of attorney, so I’m checking with the attorney.
I plan to make a log of each gun (model, make, serial #, buyer, etc) and keep it on file so I can show the process used.
Does this sound like it would be in compliance with the law?
Thanks, Steve
Almost all sounds reasonable, considering you aren’t an FFL.
The only issue that concerns me is that the “owner” can’t (or refuses to) be with the guns the entire time, which means you … by virtue of your facility … would be in possession.
Designating someone such as with a POA or even a transfer of ownership so the “owner” is with the guns the entire time may be viewed similar to a “fraudulent transfer” type maneuver — especially if the net proceeds go back to the trust, demonstrating the transfer or POA was done merely to avoid the law.
Possibly the son could be designated in the trust as a co-trustee? Or, maybe the trustee could reconsider not wanting to be at the auction?
Lastly, you will undoubtedly have buyers from out of state, concealed carry people and FFL’s wanting to buy or buying, all with their particular view on the law. Careful!
Thanks Mike. I think I will try to get the trustee to attend, stay with the guns, and distribute them to the new owners. I also plan to advertise that buyers must be from Ohio and/or have an FFL. (and of course meet all state and federal requirements)
I and a business partner are considering forming an LLC for the purpose of creating a gun/ammo/outdoor gear auction site specifically for people within our state borders. This will conceivably make the transfer of long guns easier between our buyers and sellers, as an FFL transfer only has to be done when a long gun is mailed or transfered out of state. Of course, pistols must always be FFL transferred.
As the host of the online auctions, are we required to have an FFL? I was thinking we did not, but wanted to check with you to make sure. Thanks very much for the excellent and thorough writeup.
Looking forward to your response.
Vaughn Blaylock
msoutdoorauctions.com
In regard to you needing to have an FFL, much of that would depend on if (1) you possess — at any time — any of these guns which are intended for resale and (2) if you hold yourself out as a, “gun dealer.”
There are already online models in business similar to what you describe, and I believe they act as a “broker” for the guns, and do not have an FFL?
That was my thought as well, Mike, but as I read your blog, I knew quickly that you knew more than I, so I thought it best to defer to you.
Many thanks for the quick response. Have a great week.
Best Regards,
Vaughn Blaylock
In a situation where an auctioneer sells at auction a storage unit and the buyer finds a rifle in the unit, what are the auctioneers responsibilities. Would the ATF have any issues with this transaction
Great question, Russ. It would appear to me that you, the auctioneer, never took possession of the gun(s), and therefore the transaction is basically between the owner of the contents of the unit (sold through a forced sale situation) and the buyer of the contents. This would as such constitute a private sale in respect to guns, which is legal (at this moment) without any requirement for an FFL’s involvement nor background check.
Yes Mike that my be true but I dont think an auctioneer should be braging about a buyer who found 12 guns in a unit that they sold in order to bring more people to an auction. I do believe that local authorites my have a different opinion. All those guns should be checked out by the proper channels and the buyer better have the proper paper work in order to be able to receive and transport guns .
With storage auctions you always have buyers from other states going across state lines. I also believe that an auctioneer should not brag about he or she sold a unit for 400.00 with 12 guns in side even though it was after the fact just to attract buyers. Allow Russ to tell you the whole story.
Thanks for your follow-up. If the story is fabricated, or the auctioneer “placed” the guns in the unit to attract attention, then it’s not about guns, but about unethical practice.
The guns laws in the United States (Federal) do not require any checking of the guns, nor paperwork from the buyer, for private sales. Of course, if it is an FFL transfer, then the 4473 is required, but the actual firearm(s) are still not “checked.”
There are a few states and/or cities that register the guns themselves, or verify serial numbers, etc., but those are the exceptions.
Hi Mike-
As a professional auctioneer who has sold more than 15,000 storage units in the Northeast and who is aware of the exact events that have transpired and sparked Paul’s response, I concur with Paul. The issue at hand is the auctioneer utilized a prior sale where a buyer reportedly found 12 rifles in a storage unit, then used that as a marketing tool, by touting a buyer had found 12 rifles in a unit, to attract buyers to future auctions. Advertising 12 rifles had been found in a storage unit is falsely setting hopes that the same will occur at a subsequent sales when the auctioneer has no knowledge, or ability to make such a representation.
Here in New England, we have states with extremely tight gun control laws. If a buyer in ME who was not licensed in MA had taken the rifles across the MA state line as an end user, for example, they would be subject to a one year mandatory jail sentence in MA. The issues are not only federal, they are regional and should be handled as such. I hold a class A, unrestricted high capacity license to carry in MA, as well as concealed carry licenses in NH and RI. I’m a licensed auctioneer in MA, NH, RI, VT and ME and am a NRA certified Pistol Instructor, as well as a MA Police certified firearms instructor.
Now I have a clearer picture as to what happened. Yes, as I noted, there are some states with laws on gun registration and the like …
Is this auctioneer saying, “you will find the same?” or “you might find the same?” Unless the “12 rifles” was staged or just fabricated, then saying to people that it happened, and “you too might get lucky” isn’t illegal nor unethical.
Mike, I own a auction house in Alabama and do not have a FFL. I have asked a pawn shop that is next door to me to handle all of the transactions at their location. My plan is auction the guns at my place of business, after the auction I will take the guns to the pawn shop (FFL) , the winning bidders will pick up the guns there where the transaction will take place. Let me know if you see any legal issues with the idea.
Thanks,
Anthony.
I think your plan is fairly good. However, have the FFL at your location, and have him or her take the guns back to his location next door to complete the transaction.
If you take them, or have them at your auction, you are technically in possession and may need an FFL if he or she isn’t there with those guns.
Of course, if you have an FFL, then you don’t need to take them anywhere.
Dear Mike, first off, thank you for your article. I have found it to be very much informative and easy to follow.
I am an auctioneer in upstate New York and do not have an FFL. I have sold firearms in the past at auction acting as an agent or third party for an executor of an estate. Here’s my predicament – my father passed away last year and my mother would like for me to auction off a few of his rifles. I won’t be charging her a commission. I’m assuming she automatically becomes the executor of my father’s estate because they were married at the time of his death. With this being said, if she retains possession of the rifles and personally hands the firearms to the successful bidders at auction’s end, do you consider this a conflict of interest or more importantly, a scenario that I could potentially be breaking any laws.
Any input would be greatly appreciated! Thanks!
Christopher,
Thank you for your kind words. I think as you described, you never take possession of the firearms, so you are fine without an FFL — that is so long as you don’t accept further consignments of firearms from others in this same auction, thus making this a consignment auction.
Secondly, I don’t see any conflict of interest whatsoever. In fact, I see concert of interest; you have your mother’s (and deceased father’s) interests in mind, and so does your mother.
Thank you for your quick response Mr. Brandly. You have been of great service to myself and our fellow auctioneers.
Hi Mike,
Great stuff. If an FFL created a website to advertise guns that were to be sold at a live auction conducted by that same FFL, would they have to be deemed as “consignment” and therefore be subject to the 30 day waiting period imposed on consigned firearms by California DOJ, or could they be auctioned off and transferred as a private party sale between the buyer and seller using the FFL? Could the FFL charge a fee for posting the proposed auction items on the website, and auctioning them off at the live auction that was an additional charge outside of the standard transfer fees?
Thank you.
This site seems to address the 30 day, or private party sale issue in California: http://wiki.calgunsfoundation.org/Buying_and_selling_firearms_in_California#Buying_from_a_Private_Party_-_PPT
So far as the fees and charges, I see nothing that prohibits one from charging, essentially, whatever one wants to …
Hello Mike, I have been contacted as an auctioneer to put together a proposal for a sale. THe Lady that called me is a recent widow and has acquired her husbands possessions. Some of those possessions is a collection of guns, not sure the exact number. She would like to have an on site auction at her home and sell the firearms. I attend sales on a regular basis where they sale 3-4 guns and take no comsignments. Since she is selling these as her own possesions, acquired form her late husband, what is the proper way to handle selling these guns. I understood most of what has been said previously, but this is technically not an “estate” she owns them now, and she is 5 ft 1 and 67 years of age and it would nearly be impossible for us not to touch the firearms while we sell them. Appreciate your help. By the way, your remedial class offered to help pass the auctioneer exam is the best money ever spent by me.
Thanks, Seth. The ATF uses the word, ‘estate” meaning onsite, not dead. So, as far as they are concerned, this would be an estate auction. It’s not that you can’t touch them, but more that she has to be there the entire time, maintaining actual (or constructive) possession.
Hi Mike, Do you have the exact definition of “Estate” from the ATF?
See https://mikebrandlyauctioneer.wordpress.com/2010/01/17/a-guide-for-auctioneers-selling-guns/ and there is a paragraph that starts out: “In the case of estate-type auctions …
Hi Mike! Just wanted to thank you for your blog. It’s great! Nice job! I have a question for you. I understand the difference about “consignment” and “estate” auctions and what needs to be done, but I am not finding clarification if this is the same rules for online “consignment” or “estate” auctions. All our auctions are done online and it is general consignments from the public or estates. No guns are ever on our premises and remain part of the estate. Can a gun be auctioned online as part of estate and indicated as so? NO shipping is allowed and the buyer picks up the gun from the “estate”, not at our location. Just wondering because they do not clarify between auctions and online auctions or if it is the same rules.
Great question. No real difference between a live auction and online so far as guns — thus no clarification in the law. So long as the “estate” retains possession, and the gun goes from the “estate” to the new owner, no FFL needed. That is, unless you hold yourself out as a “gun auctioneer” or “make a substantial living selling guns” or the like.
Now, since you are selling online, you would likely have the issue of out-of-state buyers. Some out-of-state transactions are prohibited by state law. That might limit some buyers from participating, unless the gun went through an FFL.
Thanks Mike! That is another stipulation for us…no out of state bidders allowed on guns. We do not do many and it is just every now and then we have a gun or two as part of an estate, and of course, we refuse to get involved with handguns and assault rifles.
Another thing that we did not find real clear is about payments. Can we collect the payment from the buyer on behalf of the estate even though the buyer picks up directly from the estate or do payments absolutely have to go directly to the estate by the buyer? On normal auction or estate items we collect payments because we offer more payment options for buyers and seller protection. Not sure if we can do that on guns though and if it is best to stay clear of that with such items. Thanks for you tips!
Another good Q. I think accepting payment would likely not constitute “engaging in the business,” and therefore be okay without an FFL. If it did then maybe PayPal, or a bank would need an FFL?
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Mike,
Thank you so much for all of this valuable information! The language in most laws can be very confusing to say the least and your clarification is priceless. The way I see it, it’s pretty simple:
A: If you want to ‘sell’ guns of any kind on a regular basis as part of your auction business then get and FFL
B: If you don’t have or don’t want to get an FFL don’t sell firearms at all unless it’s an on-site estate auction with the estate owner present.
Keep it simple, keep it legal.
Gina Hamilton, Auctioneer
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Question: I am having a living estate auction (property & contents). I have a long gun that belongs to me and am thinking about selling it. Can I take it to this on site estate auction and sell it without having or bringing in a FFL?
Debbie,
Prevailing interpretation of the laws says that by adding a gun from another seller, you are now having a consignment-type auction. In that case, you would need to have an FFL or utilize an FFL.
Mike, thanks for all the info on your blog. I am a licensed auctioneer through the State of Texas and I do mostly benefit auctions for 501 (c)(3) entities. People will donate shotguns to the entity for sale in their fundraiser auction. Is the best way for me to handle this is to have the donor be present at the auction, maintain possession and deliver the firearm to the buyer at the conclusion of the auction? Would that constitute a “private sale” and I would not be violating the law? Seems like it would be similar to the Storage Auction scenario. Thanks, Randy
Yes, sounds like the best approach is for the seller to be there and maintain possession until sold, then providing the gun to the buyer.
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Great Blog. I am a licensed auctioneer in Alabama and just we just got our FFL last week. Actually my wife and I are both listed on the FFL. We plan on selling s few guns in one of our upcoming auctions within a couple of months. My question is, where is a good place to purchase the cable locks in quantity? Also, will the cable locks be OK for long guns and hand guns?
We are about to order all the forms we need from the ATF and get everything in order. We are both a little nervous. The AFT agent that met with us during the application process went over the fines/prison time for not following procedure so that has got us nervous. I think after our first auction we will feel more comfortable about selling firearms. Wish us luck!!!
Mike-
I do not have a license. I have an upcoming benefit auction where the client wants to sell some firearms. They say they will have the county Sheriff there plus a dealer. They just need a bid caller. I get the whole Federal part-that I don’t need one(not taking possession/consignment & one time gig etc), but what about in NYS? anything you know of that could get me in a fix?
Thanks
Herb
Herb,
Without an FFl, don’t take possession of any guys, nor hold yourself out as “in the gun business.” Have the FFL possess the gun and then distribute from his/her licensed location to the buyer.
Mike
Hi Mike,
An excellent article and a must read for anyone selling guns at auctions. I just have a couple questions. Is it OK for an auctioneer who mostly has on site auctions and one or two general consignments a year without an FFL to sell a living married couple’s guns and other items belonging to the couple at an auction held at a rented facility due to space and parking. Also to clarify should the auctioneer, the setup people, cashier, clerk, and especially the ringman never touch these guns even when selling them and need to be held up to show the audience? Should all this be done by the couple including passing the guns out at the end of the auction. Also can the auction staff do the registration and background checks? Lastly do pistols have to be taken back to the couple’s home and given to the buyer after the waiting period?
It’s my opinion the consignment auctions — even if infrequent — would require an FFL.
The seller could be the only one “touching” the guns but an equal argument would be made that those guns are in your possession nonetheless.
Staff can certainly conduct background checks; there is essentially no waiting period in the United States at this point.
Given your questions, I believe you would be far safer as an FFL than without.
Hi Mike,
Just a follow up to a previous post, what are the rules regarding an auctioneer without a FFL selling ammo, both new and reloads, at an auction? Are there any limits on caliber, quantity, or how it is packaged?
Thank You
I know of no regulations at the federal level concerning ammunition if it is to be used with Class 1 (most) guns.
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Having a sale on a court ordered bankruptcy sale that has 12 guns. Based on the the current selling of gun environment I’ve engaged a FFL to to handle the transfer. However, does a court ordered sale change any of the requirements? Also on another note. I had an individual offer several guns for collateral on a personal loan that I made to him. He didn’t pay and has forfeited the guns. Can I sell those guns without a FFL involved since technically they are owned by me?
Joel, I suspect with the court-order you’ll be fine, but I would ensure that order notes the use of the FFL, location, who and how the guns are handled, stored, possessed …
Otherwise, the guns forfeited probably are fine also. That sounds like a private sale situation.
We are looking into getting our FFL. But does the owner of our auction business fill out the application form or can our operations manager?
Application to obtain the license? Anyone can actually fill out the application, but the prospective licensee must sign.
is online software legal to use in Texas? We are a 501(c)4 organization.
We are toying with the idea of an online auction of a shotgun, all the proceeds to go to help a victim of a natural disaster.
You can sell guns online or live — but the rules are largely no different. Who has title to the shotgun? If the 501(C)(4) owns it, then it can sell it more/less as a private transaction. If the gun belongs to someone else, the 501(C)4 would have to have an FFL to engage in selling this gun.
WOW! I did not expect any reply at all, much less with-in a very few minutes.
Thanks Mike, this gives us a direction for our planning.
Hello Mr.Mike Brandly ~
Thank you for your useful and highly researched work concerning fire arms auctioneering.
I am seeking information on how to become a fine fire arms auctioneer primarily in California but in other US states as well.
My husband is currently a fire arms appraiser and historian. His goal is to become a certified fire arms auctioneer. We would appreciate your experienced recommendations.
Thank you kindly,
Nancy Hakala
https://www.atf.gov/resource-center/how-become-federal-firearms-licensee-10-easy-steps
Hi Mike, appreciated your article! I have a specific question – my Dad was a licensed FFL dealer in Virginia and recently passed away. He was married at the time of his death, and my Mom is trying to figure out how to proceed with liquidating his inventory. My Dad left instructions that he would like for us to auction the guns, but we don’t know how to proceed with an auctioneer (unless we can find one with an FFL) since the guns were a part of my Dad’s licensed inventory. Any thoughts? Is there any way for my Mom to claim the guns as personal property and then auction them off? Would background checks be necessary? Thanks in advance for your advice!
Was your father personally the FFL, or a business entity? I take it from your question it was him personally?
If personally, I think this ATF guide may be some help? https://www.atf.gov/file/58186/download
Also, I would contact the local ATF office to discuss within 30 days if possible.
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Hi Mike – We have used this article and others you have written in the past to guide our auctions of firearms. We don’t often sell firearms and I am wondering if there have been any updates since this was written 8 years ago. I am located in Northwest Ohio and we get Michigan and Indiana buyers on a regular basis for all types of auctions. Some of them ask why they can’t buy firearms and then give numerous examples of such & such and so & so did it. I usually tell those bidders they may have broken the law. Thanks for the information.
This is my most recent article concerning general firearms at auction: https://mikebrandlyauctioneer.wordpress.com/2016/01/11/15-things-about-auctioneers-and-guns/
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Mike, We are selling a small collection of firearms (13) at auction this weekend, May 26. Along with the Remington rifles and shotguns, there are two Smith and Wesson 357 magnum pistols, a Thompson Center arms pistol and three pistols of undetermined manufacturer. We have the serial numbers on all those that have serial numbers. Is it necessary for us to have purchasers of these guns fill out the ATF 3477 form? It is long and involved and we anticipate backlash from the gun purchasers if we require them to take the time to fill out this form. Is there another
way that we can get the necessary information
Jeff,
Are you an FFL? Are you not an FFL? Are you referring to a 4473 form? What necessary information are you wishing to obtain?
Mike
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I like that you mentioned that it’s important for auctioneers when selling firearms at auction to adhere to all applicable laws. I’ve been to a couple of auctions that there’s been some trouble for not paying attention to the finer details. I also like that you mentioned that the sale of guns is regulated by the federal government in the united states and then the state has additional laws.
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very interesting thread!