Tags

, , , , , , , , , , , , , , ,

This is my sixth “aberrant auction law” find, and numbered as such. When I find more, I’ll attempt to number sequentially, although I hope my searching is generally unsuccessful.

Aberrant auction law refers to auctioneer licensing law (or other auction related law) that is abnormal, odd, bizarre, or otherwise unusual. The basis for determining if an auction law is aberrant is all the other auction law that is out there, which collectively is widely considered normal.

This is two in a row for Ohio; Ohio has a long history of regulating auctioneers. There were auctioneer regulations as far back as the 1800’s, and today’s statutes stem from an overhaul of that preceding law, in 1963.

If we look at Ohio Revised Code Chapter 4707.024 (C) we find the following statute:

(C) Except for the payment of money to the owner or consignee immediately after the end of the auction, a person licensed under this chapter shall pay the owner or consignee with money from the client’s trust or escrow account. In addition, the licensee may pay expenses, including commission and advertisement fees, that are specifically delineated in the auction contract with money from the trust or escrow account. Money in the trust or escrow account shall not be disbursed for any purpose that is inconsistent with this section.

In addition, the money shall not be commingled with the licensee’s personal or business money.

In administering the trust or escrow account, the licensee shall keep detailed records that show deposits, withdrawals, and interest accrued, if applicable. Unless otherwise agreed to by the parties in the auction contract or by the direction of a court of law, all money deposited into a trust or escrow account shall be disbursed to the seller not later than fifteen days after the auction.

Ohio goes on to say in Ohio Revised Code Section 4707.15 and Ohio Administrative Code 901:8-2-08 that auctioneers may be disciplined for “commingling.” In other words, auctioneers in Ohio may not mix personal or business funds with client monies in their trust account.

That seems pretty clear.

However, how does an auctioneer open a trust (checking) account without an initial deposit of his own money? How is an auctioneer expected to maintain a trust (checking) account without paying a monthly bank fee, check printing fee, and the like?

In other words, it is virtually impossible to maintain any type of checking account without depositing at least nominal amounts to open and maintain the account — although auctioneers in Ohio can’t commingle personal funds with client monies without risking disciplinary action.

Further, Ohio requires that an auctioneer have a trust (checking) account open before they are issued an auctioneer license — so it is impossible for any Ohio auctioneer to have client monies from an auction ready to open a trust account, as the account has to be open before those client monies could be available.

We find Ohio Revised Code Chapter 4707.024 (C) and related statutes aberrant.

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.