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man-916498_1920Auctioneers who are licensed are licensed by their state, and in some cases locally within a state.

Likewise, real estate brokers are licensed by state and thus permitted to practice real estate in that state.

As large regional [real estate] auction companies have formed in the last 20-30 years, there has been a disturbing practice develop — “using” another auctioneer’s license to do business where they don’t have a license.

For example, BigAuctionCompany is a company based in Tennessee. A seller in Ohio calls BigAuctionCompany and inquires about selling some of his real/personal property in Ohio.

BigAuctionCompany does not have an Ohio auctioneer’s license nor an Ohio real estate license, so they find an Ohio licensed auctioneer/broker in hopes of “using his license” to conduct the auction in Ohio.

Yet, BigAuctionCompany has already illegally signed a contract with the Ohio seller/owner. Then, their thinking is all they need is an Ohio auctioneer/broker to be at the event to allow them to further market, bid-call, accept bids, close the deal …

However, that’s not how licensing works. If BigAuctionCompany is engaging in the business of conducting a real estate auction in Ohio (for example) then BigAuctionCompany needs all applicable licenses. Having an Ohio licensee present (in the room) doesn’t help.

Likewise, even by contracting with the Ohio licensee doesn’t mitigate the issue of BigAuctionCompany doing business in Ohio without required licenses — although in some states, there are commercial brokerage laws which allow in-state brokers to cooperate with out-of-state brokers to co-broke such assets. Yet, this is a narrow exception and not usually material to this “using another auctioneer’s license” illegal work-around.

The particular legal issues are “assignability” and “alterability.” A holder of an occupational license cannot assign that license to anyone else — as they are not assignable, and as well cannot alter that same license to give another person some or all of those rights.

Thus, a word of caution for auctioneers when approached by BigAuctionCompany or anyone else, asking to “use your license …,” that the answer should very likely be “No, thanks.” Such illegal partnerships jeopardize your license and your future in the auction industry.

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, RES Auction Services and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College of Business, Executive Director of The Ohio Auction School and Faculty at the Certified Auctioneers Institute held at Indiana University.