It’s always been prudent for auctioneers to disclose any latent and/or hazardous conditions about property they are putting up for auction. If, for example, a car was in an auction and didn’t have brakes — wouldn’t you as a buyer expect that to be disclosed?
There are those who say, “No, that doesn’t need to be disclosed” and would further argue that you as a buyer aren’t even entitled to check over or preview the car before you buy it. And if you don’t like those terms … don’t bid I suppose?
It’s called “disclaimer” of all responsibility — in this example, auctioneers are being advised to disclaim any duty to look to see if the car has brakes, check to see if the brakes work (sufficiently) and disclose to bidders/buyers the findings if there are material issues.
Further, auctioneers are encouraged to sell “as-is” and not allow any previews, so you the buyer can’t access the car prior to see if the brakes work. Apparently, even if the auctioneer knew the brakes were bad, he wouldn’t need to disclose.
What are the implications of such an appalling and dangerous policy? I’ll leave that question open for you to answer. Let’s rather propose an auctioneer discovers a home with personal property where the prior occupant died of Coronavirus (COVID-19) complications.
In this regard, our question today is: “Would the auctioneer have a duty to disclose this latent and potentially dangerous information?” Or, could the auctioneer simply say, “We’re selling all this property ‘as-is’ and ‘where-is’ without any guarantees nor warranties expressed nor implied … and there are no previews allowed.”
The question in my mind is two-fold: “What type of auctioneer do you want to be?” and “Are you trying to win (or lose) in court, or stay out of court?” Let me assure you, with no opportunity to preview and disclaiming any need to disclose, let’s say the buyer of that car without brakes has a bad follow-up accident …
We are not suggesting that auctioneers need to be experts on all they are putting up for auction, and rather auctioneers need to take prudent, reasonable steps to inspect such property and disclose any latent and dangerous issues. Further, previews allow bidders to possibly see for themselves, potentially lessening those auctioneers’ responsibilities.
So … you know the prior occupant died of Coronavirus (COVID-19) complications and you’re selling that subject personal property at auction. Do you disclose? Do you accommodate a requested preview, inspection or test? Or do you disclaim all your responsibility?
Finally, another resource to check is the HIPPA (Health Insurance Portability and Accountability Act) laws and exceptions (anonymous, in the interest of public health, etc.) here: publichealth.pdf.
Mike Brandly, Auctioneer, CAI, CAS, 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, Executive Director of The Ohio Auction School, an Instructor at the National Auctioneers Association’s Designation Academy and America’s Auction Academy. He is faculty at the Certified Auctioneers Institute held at Indiana University and is approved by the The Supreme Court of Ohio for attorney education.