I viewed an auction where in the terms and conditions regarding a firearm noted: “Failure to pass the background check will result in the buyer consigning the item to an upcoming auction.”
I would offer that is not the result. If a buyer is denied, that buyer has neither possession nor title, so there’s no way for that buyer to be the consignor.
When a firearm is consigned to an auctioneer and the high bidder is denied, the seller (still) has title and the auctioneer (still) has possession. A denial results in no change in that status.
We previously wrote about this issue here: https://mikebrandlyauctioneer.wordpress.com/2015/06/22/gun-buyer-at-auction-is-denied/ and it seemed like a good time to revisit this circumstance.
If the seller desired to repossess, he would have to pass a background check, or if the auctioneer maintained possession, the firearm could be sold again in an upcoming auction.
Additionally, a buyer of a firearm who is denied has a right to appeal the denial. It would be prudent for any auctioneer to maintain possession of the subject firearm until all appeals are exhausted.
Firearm laws are commonly misunderstood. This is not an area any auctioneer should unnecessarily risk liability with penalties up to $500,000 in damages and 10 years in prison. Competent attorney counsel would also be prudent.
As of this date, we’ve written dozens of times about firearms laws for auctioneers including here:
- Auctioneers and a pandemic: https://mikebrandlyauctioneer.wordpress.com/2020/04/13/auctioneers-firearms-a-pandemic/
- Marbury v. Madison: https://mikebrandlyauctioneer.wordpress.com/2020/01/29/marbury-v-madison-and-firearms/
- Dating a firearm: https://mikebrandlyauctioneer.wordpress.com/2020/01/09/dating-a-firearm-and-is-it-important/
- The Second Amendment Sanctuary Regulations: https://mikebrandlyauctioneer.wordpress.com/2019/12/26/auctioneers-and-second-amendment-sanctuary-regulations/
- There must be a way: https://mikebrandlyauctioneer.wordpress.com/2019/11/08/auctioneers-firearms-and-there-must-be-a-way/
- What is an “Estate-type” auction?https://mikebrandlyauctioneer.wordpress.com/2019/10/25/firearms-and-what-exactly-is-the-atf-implying/
- Overview of licensing for auctioneers: https://mikebrandlyauctioneer.wordpress.com/2019/10/16/firearm-laws-for-auctioneers/
- Infringement of your Second Amendment rights: https://mikebrandlyauctioneer.wordpress.com/2018/03/22/firearms-guaranteed-and-not-infringed/
- Minimum age to buy a firearm: https://mikebrandlyauctioneer.wordpress.com/2018/03/05/minimum-age-to-buy-a-firearm/
- Engaging in the business: https://mikebrandlyauctioneer.wordpress.com/2017/08/28/auctioneers-engaging-in-the-business-of-selling-firearms/
- FFL’s acting as if they are not FFL’s: https://mikebrandlyauctioneer.wordpress.com/2017/08/16/auctioneers-with-ffls-acting-as-if-they-arent-indeed-they-can/
- When does an auctioneer need to be an FFL?https://mikebrandlyauctioneer.wordpress.com/2016/09/29/when-does-an-ffl-need-to-be-an-auctioneer/
- What is an “Estate” in regard to firearms? https://mikebrandlyauctioneer.wordpress.com/2016/09/09/what-is-an-estate-in-regard-to-firearms/
- How does Federal Firearm Licensing work?https://mikebrandlyauctioneer.wordpress.com/2016/08/27/how-does-auctioneer-ffl-licensing-work/
- 15 things to know about auctioneers and guns: https://mikebrandlyauctioneer.wordpress.com/2016/01/11/15-things-about-auctioneers-and-guns/
- Auctioneer working with an FFL: https://mikebrandlyauctioneer.wordpress.com/2015/08/17/auctioneer-with-the-help-of-an-ffl/
- ATF Rule 96-2 confusion: https://mikebrandlyauctioneer.wordpress.com/2014/10/21/the-atf-rul-96-2-confusion/
- We are an FFL and not an FFL: https://mikebrandlyauctioneer.wordpress.com/2014/09/29/we-are-and-we-arent-acting-as-an-ffl/
- Importing and Exporting firearms: https://mikebrandlyauctioneer.wordpress.com/2012/03/04/importing-and-exporting-guns-tofrom-the-united-states/
- A guide for auctioneers selling firearms: https://mikebrandlyauctioneer.wordpress.com/2010/01/17/a-guide-for-auctioneers-selling-guns/
Generally, only Federal Firearms Licensees may engage in the business of selling firearms, and the only way a non-licensee auctioneer may sell firearms is via the Estate-type exemption, which means an onsite single seller auction where the firearms are sold to residents of that same state.
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 Supreme Court of Ohio for attorney education.