Tags
auction, auctioneer, auctioneers, auctions, court ordered, forced sale, foreclosure, partition action, repossession, seller bidding, tax lien, UCC 2-328, with reserve, without reserve
Auctions in the United States are of two types: with reserve and without reserve per the adoption of the UCC 2-328 by 49 of the 50 states. Our topic today regards when the auction is a forced sale, and if that changes the general rules of how auctions work?
In a forced sale, the property is being sold involuntarily. In other words, the property is selling at auction because of a court-order or other such authority, without the consent of the seller. Common forced sales in the United States include:
- Foreclosure auctions
- Repossession car auctions
- Tax lien auctions
- Partition-by-sale court orders
- Other court-ordered auctions
What is important about a forced sale auction, versus other types of auctions, regards if the seller is able to legally bid at the auction. At auctions which are not forced sales:
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- With reserve auction
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- The seller may bid only if that right is disclosed to the other bidders to avoid buyer recourse
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- Without reserve auction
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- The seller may not bid
However, at a forced sale auction, these rules change:
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- The seller may bid regardless of the auction type; no disclosure required
In the forced sale auction, the legal presumption is that since the seller is selling involuntarily, the seller has the right to protect his interest(s) by bidding.
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.facebook.com/mbauctioneer. He is Executive Director of The Ohio Auction School.
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What happens if there are two owners of the property (2/3 and 1/3 ownership)? Can either of the owners bid? I have a situation where one owner wants to force the sale in order to get out of the property (other owner lives at the property). The property is paid off completely and the 2/3 owner wants to cash out. 2/3 owner may even have paid almost 100% of the funds for the property (1/3 owner was only put on deed). Im trying to figure out how 2/3 owner will get the most out of the property.
I suspect either owner can bid legally. Neither are the “seller” in that they are bidding as individuals, but joint-owners in title. However, to be safe, have a “with reserve” auction and notice that the seller has the right to bid — then they can for sure as they desire.
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At a forced auction does the seller have a right to get from the auctioneer a list of who bought what items And a what they paid for them.. Also if the auction eer has hired individuals to assist buyers in removal of property are the auctioneers responsible for their actions if they steal items at that time?
Generally speaking, the seller has a right to know who purchased what and the sale prices. However, to your second question — if the auctioneer’s “people” are stealing property, it would likely be the auctioneer’s responsibility (liability.)