Tags

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

I was recently reviewing an auctioneer’s terms and conditions, and noted the following:

    The Buyer has no right of abandonment whatsoever. The Buyer agrees to remove all purchased property from the Auction Site within the specified time announced or posted in the auction catalog.

We’ll address these four questions in this article:

  • Do buyers abandon property they purchase?
  • Is this a widespread problem in the personal property auction business?
  • Why would this be a necessary part of an auctioneer’s terms and conditions?
  • What is the legal standing in situations such as this?

First, do buyers abandon property they purchase? All the time. Buyers may purchase something as small as a boxed lot of various kitchen utensils, but only take home the older ice cream scoop, leaving the balance of the kitchen utensils, and maybe even the box, behind. Or, even in a more major purchase, where a buyer buys an entire walk-in cooler but takes only the compressor and leaves the remainder of the cooler behind.

The issue of buyers doing this lies in the fact that auctioneers sell personal property in lots in order to maximize proceeds, but this lotting may not be how some buyers prefer. For instance, if we sold that ice cream scoop separate, that same buyer would have become the owner; however, the auctioneer sold the entire box, more or less forcing that buyer to buy all those kitchen items, even though he only wanted the one item.

Second, is this a widespread problem in the personal property auction business? I would suggest it is indeed widespread, but is only potentially a problem. Every day in the United States, personal property is sold at auction in groups or lots, and items are left behind (abandoned) by those buyers.

If the auctioneer and seller have considered this possibility prior to the auction, provisions can be in place for discarding whatever is left, or otherwise disposing of any abandoned items. Even a large item such as a walk-in cooler could suggest to an auctioneer that a potential buyer might leave behind parts he didn’t want, and it would be prudent to discuss this possibility with his client.

Third, why would this be a necessary part of an auctioneer’s terms and conditions? In some cases, it is not in the seller’s best interest to have items left over or abandoned following an auction.

Storage lien auctions sometimes require the buyers take all items in the storage unit, leaving the unit “broom clean;” this is done so the unit is ready to lease right away, and without additional expense. Or, maybe a seller needs to have his home, business or other space completely empty following the auction, and therefore there is not time to discard any abandoned items.

Lastly, the expense of relocating and/or discarding left-over items may exceed the price realized — in some cases, it might be better for a walk-in cooler that must be removed completely to sell for $1.00 to someone who will take it all, rather than sell to someone for $200 who only takes the compressor …

Fourth, what is the legal standing in situations such as this? Clearly, when an auctioneer says, “You’re buying this box of kitchen utensils,” and then receives a bid, the bidder is acquiescing that their bid is for that entire box. Further, when the auctioneer says, “Sold!” a contract is formed ultimately providing title to the buyer for the entire box of kitchen utensils. Then, if the buyer abandons any part of that purchase, he is leaving personal property of his on the real property of others, and probably without authority. Therefore, if a case of this type went to court, a court would likely rule that the buyer had to take possession of his entire purchase and remove it, almost independent of the auctioneer’s terms and conditions, unless those terms expressly permitted abandonment.

Auctioneers who use the phrase “The buyer has no right of abandonment whatsoever,” or the like, in their terms and conditions, must be careful to note that prices may be depressed by the amount the buyers perceive the cost of removing purchased — but unwanted — items, thus lowering seller’s net proceeds accordingly. Or, it may be that the actual cost of removal exceeds those buyer’s perceived costs, so such declaration in the terms and conditions is judicious.

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.