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charityauctionMany auctioneers conduct benefit auctions — auctions which often benefit some cause such as a family with medical bills, a local homeless shelter, a toy drive around the holidays, etc.

Similarly, charity auctions typically involve a charity as defined under IRS regulation section 501(c)(3). These auctions might be for Goodwill Industries, March of Dimes, American Red Cross, etc.

Currently in the United States, there are well over 1 million 501(c)(3) organizations. Many auctioneers focus on charity/benefit auctions, and far more conduct at least a few charity/benefit auctions each year.

Auctioneers who conduct charity/benefit auctions are typically not required to be licensed as auctioneers. For the approximate one-half of the United States, there is no such licensing, and for the approximate other one-half of the United States, license law largely exempts charity/benefit events.

Yet, there seems to be a significant misunderstanding regarding this exemption. While a license may not be required for the auctioneer, other laws make no distinction between a charity/benefit auction and any other auction.

For instance:

  • Vehicles and the like. Such typically require titles and in some states might require a dealer’s license of some sort to sell.
  • Real estate including fee simple, rental, time shares, etc. Most states dictate some sort of real estate license to sell (and to auction) real property interests.
  • Alcohol, wine and other spirits. Many states require the auctioneer and/or the 501(c)(3) to hold certain permits or licenses.
  • Taxidermy, Ivory and the like. Numerous Federal and state laws regulate the sale of these types of items.
  • Firearms. Federal law and many accompanying state laws dictate if the auctioneer must have a Federal Firearms License and if certain other restrictions are applicable.
  • UCC 2-328. Every state enforces the UCC 2-328 in a fashion, including “types of auctions,” and when the bid can be “reopened,” along with applicable contract law.
  • UCC 2-313. All states enforce the UCC 2-313 regarding expression of warranties and guarantees in product descriptions.

And there can be — and are — other applicable laws.

The point of this writing is that we’ve had 100’s of people tell us over the years, including other auctioneers, that, “It’s a benefit auction, so we can do this …” or “This is a charity auction, so we’re allowed to …” largely based upon the fact that there is no licensing requirement for the auctioneer.

The penalties for violating these laws, and other potential liability for that matter, would likely far exceed the penalties for even operating without a auctioneer’s license when one’s required.

Charity and benefit auctions are auctions, not some type of special event immune from all laws and regulations due to them being immune from one particular law.

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 serves as Adjunct Faculty at Columbus State Community College and is Executive Director of The Ohio Auction School.