I recently testified in yet another auction case. The issue was basically a “title issue” which wasn’t adequately disclosed (in my opinion.) In the trial, I was presented a preposterous claim — that if bidders couldn’t read the disclosures or terms, they would know to enlarge the print on their computers.
In other words, terms and conditions or disclosures in 1-pt size (0.0138889″) are fine because bidders would know to enlarge the print to assess what the text actually said. And what if this small print constitutes the most material in any real property transaction — title status — is that okay?
It’s not okay. Auctioneers shouldn’t be putting material information in 1-pt size (or otherwise concealing) material information because they don’t want bidders to have knowledge of it, while at the same time wanting to hold these bidders to these “concealed” terms and disclosures.
We previously wrote about “fine” or “small” print here: https://mikebrandlyauctioneer.wordpress.com/2020/12/08/auctioneers-and-fine-print/. As we noted prior, it’s largely enforceable on any party consenting to the small print.
This case involved what was probably the most egregious violation of agency duties along with a lack of disclosure to bidders. These auctioneers didn’t maximize price nor adequately inform bidders of material information. I’ve rarely seen such malpractice.
I informed all the attorneys and the judge present (maybe 8 people?) that bidders don’t read anything (haven’t auctioneers told me that? I think I’ve seen that on Facebook?) and that day-of-auction oral disclosures are very important. That is if all material information is included in those announcements; in this case, they weren’t.
Auctioneers can and should do better. Disclose all (latent) material information we’re privy to … and of course brag about the property without crossing the line from sales talk and/or puffing — to misrepresentation. It’s not difficult to do, but apparently, some think it’s a terrible idea.
Oh, and worse yet, disclose a whole bunch of other information about the property … suggesting that all the material information has been disseminated when it hasn’t. In other words, it’s important you know about the light bulbs in the janitor’s closet, but not that the transaction has a material defect in the property line?
If it’s really important information — such as a title problem — such should be disclosed in point size easily readable as well as announced in clear language. Anything less is unconscionable behavior. Is there any better way to discourage future auction bidders than treating them in this fashion?
Further, if you as a real estate auctioneer have a seller with a title problem — have the seller solve that problem before the auction rather than [possibly] after. Aren’t we bound to maximize the seller’s position? Don’t we have a fiduciary duty to both give our seller good advice and provide bidders a reason to keep bidding …?
If you are selling personal property at auction, clear title is expected. If you are selling real property at auction, clear title is expected unless you clearly announce/disclose otherwise. Any other behavior is unreasonable and likely (and rightly) actionable by both bidders/buyers and sellers.
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, and an Instructor at the National Auctioneers Association’s Designation Academy and Western College of Auctioneering. He is faculty at the Certified Auctioneers Institute held at Indiana University and is approved by The Supreme Court of Ohio for attorney education.