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A01730 Summary:

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A01730 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         1730--D
                                                                Cal. No. 157
 
                               2009-2010 Regular Sessions
 
                   IN ASSEMBLY
 
                                     January 9, 2009
                                       ___________
 
        Introduced  by M. of A. BRODSKY -- read once and referred to the Commit-
          tee on Tourism, Arts and Sports Development -- reported  from  commit-
          tee,  advanced  to  a  third  reading,  amended and ordered reprinted,
          retaining its place on the order of third  reading  --  reported  from

          committee, advanced to a third reading, amended and ordered reprinted,
          retaining  its  place  on  the order of third reading -- reported from
          committee, advanced to a third reading, amended and ordered reprinted,
          retaining its place on the order of third  reading  --  reported  from
          committee, advanced to a third reading, amended and ordered reprinted,
          retaining its place on the order of third reading
 
        AN  ACT  to  amend  the  general  business  law,  in relation to auction
          requirements
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1.  Legislative  intent.  The  legislature  declares that the
     2  following provisions of law are in addition to other provisions  of  law
     3  and regulations applicable to auctions.

     4    § 2. The general business law is amended by adding a new section 29 to
     5  read as follows:
     6    §  29.  Requirements  for  auctions.  1.   The auctioneer will be held
     7  responsible for the truth of any statement contained in  any  catalogue,
     8  advertisement,  announcement,  press  release  or other public statement
     9  made by the auctioneer relating to any auction.
    10    2. a. No personal property may be auctioned except pursuant to a writ-
    11  ten contract between the consignor or his or  her  agent  or  authorized
    12  representative and the auctioneer, unless auctioned pursuant to an order
    13  of a court of competent jurisdiction.
    14    b. Every contract required pursuant to paragraph a of this subdivision
    15  must contain the following provisions:
 

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD04810-19-0
        A. 1730--D                          2
 
     1    (i)  All  fees, commissions and charges to be paid by the consignor to
     2  the auctioneer or his or her agents, principals, employees, employers or
     3  assigns shall:
     4    (1)  to the extent practicable, be itemized and specified as to amount
     5  (which may be stated as a percentage of the reserve price or  any  final
     6  bid), and
     7    (2)  if such itemization and specification as to amount is not practi-
     8  cable, be described with sufficient particularity to inform the  consig-

     9  nor  of  the nature of the services for which such fees, commissions and
    10  charges will be imposed.
    11    (ii) That as of the date of the auction the consignor warrants that he
    12  or she has complete and lawful right, title and interest in the property
    13  auctioned, and that the consignor shall indemnify the auctioneer, his or
    14  her agents, principals, employees, employers or assigns in the event  of
    15  any  defect  in title, and that an intended beneficiary of this warranty
    16  is the ultimate purchaser at auction.
    17    c. Where articles are referred to by  catalogue  or  advertisement  as
    18  having  been  obtained  from  any specific person, place or source, such
    19  articles must be separately enumerated and identified.

    20    d. If an auctioneer or auction house has any interest, direct or indi-
    21  rect, in an article, including a  guaranteed  minimum,  other  than  the
    22  selling  commission,  the fact such interest exists must be disclosed in
    23  connection with any description of the article or articles in the  cata-
    24  logue or any other printed material published or distributed in relation
    25  to  the sale. Such notice may be denoted by a prominent symbol or letter
    26  which will refer the reader to an  explanation  of  the  nature  of  the
    27  interest  the  symbol  or  letter  denotes.  In  addition,  prior to the
    28  commencement of the auction, the auctioneer shall orally  announce  that
    29  those  lots  in  which  the  auctioneer  has an interest covered by this

    30  subdivision have been designated in the auction catalogue and the symbol
    31  used to denote such interest.
    32    e. Where a consignor is to receive a rebate commission in whole or  in
    33  part,  or  where he or she will be permitted to bid upon and to buy back
    34  his or her own article at the sale, disclosure of such a condition  must
    35  be  made  in  connection  with  any  description of the item or items so
    36  affected in the catalogue or any other  printed  material  published  or
    37  distributed  in  relation to the sale. The existence of such a condition
    38  may be denoted by a symbol or letter which will refer the reader  to  an
    39  explanation of the nature of the interest the symbol or letter denotes.

    40    f.  (i) If the consignor has fixed a price below which an article will
    41  not be sold, the "reserve price", the fact that the lot  is  being  sold
    42  subject  to reserve must be disclosed in connection with the description
    43  of any lot so affected in the catalogue or any  other  printed  material
    44  published  or  distributed  in  relation to the sale. The existence of a
    45  reserve price may be denoted by a symbol or letter which will refer  the
    46  reader to an explanation of reserve price. For the purpose of this para-
    47  graph  and  paragraphs  d  and  e of this subdivision, advertisements in
    48  newspapers or other periodicals shall not constitute  printed  material.
    49  Where  no printed material is provided in connection with the auction an

    50  auctioneer shall have available during any advertised inspection  period
    51  information  as  to  whether  a  particular lot is to be sold subject to
    52  reserve and shall announce before he or she commences the  auction  that
    53  such information is available upon request.
    54    (ii)  When  a  lot  is  not subject to a reserve price, the auctioneer
    55  shall not indicate in any manner that the lot is subject  to  a  reserve
    56  price.
        A. 1730--D                          3
 
     1    g.  In  the  event  an  auctioneer  extends a loan to a purchaser, the
     2  auctioneer shall disclose in a general announcement at the  commencement
     3  of  the  auction  that bidders may be participating in the sale who have

     4  been offered a loan by the auctioneer. In addition, this disclosure must
     5  also  be  made on signs prominently displayed in the auction room and at
     6  the entrance thereto. Such signs shall include the following disclosure,
     7  or convey substantially the same message:
     8    "Bidders may be participating in the sale who have been offered a loan
     9  by the auctioneer."
    10    h. The auctioneer shall:
    11    (i) Provide information as to the number of jewels, approximate number
    12  of carats, number of points  (diamond),  principal  metal  content,  and
    13  manufacturer's  name,  if  known, for all articles of jewelry, including
    14  watches. The information required by this paragraph  shall  be  provided

    15  either  in  the  catalogue descriptions of such items or by attaching to
    16  each such item a tag or marking containing the information.
    17    (ii) Issue or cause to be issued to each purchaser  an  invoice  which
    18  shall contain all the following information:
    19    (1) The auctioneer's name, business address and license number;
    20    (2) The name and address of the auctioneer's employer or principal;
    21    (3) The date of sale;
    22    (4)  The  lot  number, description, quantity and selling price of each
    23  lot;
    24    (5) The total amount of purchase with a separate  statement  of  sales
    25  tax;
    26    (6) All deposits made against the purchase price.
    27    (iii) Advertise each auction sale at least once in the seven day peri-

    28  od immediately preceding the auction.
    29    (iv)  Notify  the  person  whose  property is being auctioned (and any
    30  other person entitled to be notified according to law) as to  the  date,
    31  place and time of sale.
    32    (v)  Permit (prior to the start of the auction) prospective purchasers
    33  to inspect each and every article to be offered for sale.
    34    (vi) Furnish to any buyer, consignor or  owner  of  an  article,  upon
    35  request,  information  as  to the whereabouts of that article that comes
    36  into his or her possession or that is sold or offered for sale by him or
    37  her.
    38    (vii) Send checks for the net amount received on all sales to  persons
    39  entitled  to  the  proceeds thereof within fourteen days of date of sale

    40  (except as otherwise agreed in writing or  otherwise  provided  by  law)
    41  together  with a complete detailed statement including lot number, quan-
    42  tity, description and selling price of each lot; total  amount  received
    43  on  sale;  and  disbursements listing commission, cost of advertisement,
    44  labor, charges and allowances, and sundry expenses.
    45    (viii) When an auctioneer has a number of the same kind of articles to
    46  be sold and intends to dispose of each of them at the  amount  at  which
    47  the  first  is sold, he or she shall make an announcement to that effect
    48  prior to opening the sale of the first article.
    49    i. If an auctioneer makes loans or advances  money  to  consignors  or
    50  prospective purchasers, this fact must be conspicuously disclosed in the

    51  auctioneer's  catalogue  or printed material. If the auctioneer does not
    52  provide any such printed material, he or she shall make the  disclosure,
    53  either by conspicuously posting a sign, or in another similarly conspic-
    54  uous  manner,  at the time of any advertised inspection periods prior to
    55  the auctions. For the purpose of this paragraph advertisements in  news-
    56  papers or other periodicals shall not constitute printed material.
        A. 1730--D                          4
 
     1    j.  Except  to  implement a reserve price, and subject to the require-
     2  ments of paragraph b of subdivision three of this  section,  no  auctio-
     3  neer,  his  or  her consignor, employee, employer, assignee or agent for

     4  any of them may bid for his or her own account at any auction if any  of
     5  them  shall  have  access  to information not otherwise available to the
     6  public regarding reserves, value or other material facts relating to the
     7  articles which are the subject of the auction, unless their status as  a
     8  person  with  inside information and intended participation is disclosed
     9  in the auctioneer's catalogue and any  printed  material  and  on  signs
    10  posted at the auction.
    11    k.  Wherever  an  estimate  or  estimated  value  of an item or lot is
    12  published in a catalogue or any  other  printed  material  published  or
    13  distributed in relation to an auction sale, a general description of the
    14  estimate  and  its meaning and function must be included in such printed

    15  material. For the purpose of this paragraph, advertisements  in  newspa-
    16  pers  or  other periodicals shall not constitute printed material. Where
    17  no printed material is provided, and an estimate or estimated  value  is
    18  announced  or  disseminated  in any manner, a general description of the
    19  estimate and its meaning and function must be available for distribution
    20  and its availability must  be  announced  at  the  commencement  of  the
    21  auction.
    22    l.  In any advertisement indicating an auction sale due to a business'
    23  loss of lease or liquidation, the auctioneer must include  the  name  of
    24  the  consignor  or  business authorizing the auction. In any sale adver-
    25  tised as pursuant to a security agreement, the name of the debtor  shall

    26  be indicated conspicuously.
    27    3.  a.  If the reserve price is not bid, the auctioneer may withdraw a
    28  lot from sale. At the time of such withdrawal,  and  before  bidding  on
    29  another lot begins, the auctioneer shall announce that the withdrawn lot
    30  has been "passed", "withdrawn", "returned to owner" or "bought-in".
    31    b.  Before bidding on any lot has reached its reserve price no auctio-
    32  neer may make or place consecutive or successive bids, or place bids  in
    33  response  to  bids  from  others, on behalf of the consignor, unless the
    34  fact that the auctioneer will or may bid in such a manner is clearly and
    35  conspicuously disclosed in any catalogue and any other printed  material
    36  published  or  distributed in connection with the sale. For the purposes

    37  of this paragraph advertisements  in  newspapers  or  other  periodicals
    38  shall not constitute printed material. This disclosure must also be made
    39  on  signs  prominently displayed in the auction room and at the entrance
    40  thereto, and must be announced by the auctioneer  immediately  prior  to
    41  the commencement of any auction.
    42    The  sign required by this paragraph must be at least twelve inches by
    43  eighteen inches in dimension with letters at least one  inch  high,  and
    44  must read as follows, or convey a substantially similar disclosure:
    45    The  auctioneer may open bidding on any lot by placing a bid on behalf
    46  of the seller. The auctioneer may further bid on behalf of  the  seller,
    47  up  to  the  amount of the reserve, by placing successive or consecutive

    48  bids for a lot, or by placing bids in response to other bidders.
    49    c. After bidding has reached the reserve price of a lot:
    50    (i) the auctioneer may not bid on  behalf  of  the  consignor  or  the
    51  auction house; and
    52    (ii)  the  auctioneer may only accept bids from persons other than the
    53  consignor or the auction house except absentee telephone, order or other
    54  agent's bids;
    55    (iii) this paragraph shall not apply to auction sales conducted pursu-
    56  ant to an order of a court of competent jurisdiction, including an order
        A. 1730--D                          5
 
     1  of a bankruptcy judge or trustee, or a sale of secured property pursuant
     2  to the uniform commercial code, or the sale of property which is subject

     3  to a lien or assignment pursuant to the laws of the state of New York.
     4    d.  In no event shall the reserve price for any lot exceed the minimum
     5  estimated value of the lot as published in any catalogue or other print-
     6  ed material distributed by the auctioneer.
     7    4. a. An auctioneer may not disclaim warranty of  title  of  any  item
     8  sold  at  auction.  The  auctioneer  shall reimburse any purchaser in an
     9  amount equal to the successful bid at auction plus any  buyer's  commis-
    10  sion  paid  in  the  event  it  is determined that the purchaser has not
    11  acquired transferable title to the item.
    12    b. At the auction sale premises only exterior signs may  be  displayed
    13  advertising  the  auction  sale  but  the same shall not be excessive in

    14  size.
    15    c. An auctioneer may not:
    16    (i) offer more than one article for sale at any one  time  unless  the
    17  combining of articles or lots is so indicated prior to the initial bid.
    18    (ii)  represent an article to be guaranteed by the manufacturer or the
    19  owner unless a manufacturer's or owner's guarantee accompanies the arti-
    20  cle.
    21    (iii) offer an  article  contained  in  a  carton,  package  or  other
    22  container commonly known as a blind article unless prior to the offer it
    23  is  announced  that  the  highest  bidder  may reject the article if not
    24  satisfactory to him or her. This provision does not refer to an  auction
    25  of  articles in bulk where a sample is displayed and balance of articles

    26  are represented to conform to the sample.
    27    (iv) accept as payment or exchange any article previously knocked down
    28  or sold to a successful bidder. The article knocked down or sold must be
    29  delivered to the bidder or, if the auctioneer  is  willing  and  at  the
    30  bidder's election, the purchase price refunded in full. No other article
    31  may  be  offered  to  said  bidder  as a substitute or replacement. Such
    32  refund shall take place within a reasonable time or may  be  applied  as
    33  part  payment  or  payment for any other article purchased at auction by
    34  the same bidder.
    35    5. The provisions of this section shall  be  enforced  by  the  county
    36  officer  charged  with  enforcement  of  consumer protection within such

    37  county, except that in the city of New  York,  by  the  commissioner  of
    38  consumer affairs of such city.
    39    6.  The provisions of this section shall not be applicable to auctions
    40  held as part of a fundraising event by an entity created for  charitable
    41  purposes  within  the  meaning  of  paragraph four of subdivision (a) of
    42  section eleven hundred sixteen of the tax law where the proceeds of such
    43  fundraising event benefit such organization.
    44    7. Notwithstanding the foregoing, and  unless  otherwise  required  by
    45  law, in any county with a population of two hundred thousand or less, no
    46  written  contract shall be required where the reasonably estimated value
    47  of the property to be  auctioned  is  less  than  one  hundred  thousand

    48  dollars.
    49    8. The provisions of this section shall not be applicable to:
    50    a. motor vehicle auctions conducted under section twenty-three of this
    51  article and the vehicle and traffic law;
    52    b. auctions of poultry and livestock;
    53    c. auctions of farm supplies, farm equipment, and farm real-estate; or
    54    d.  auction  sales conducted pursuant to an order of a court of compe-
    55  tent jurisdiction, including an order of a bankruptcy judge or  trustee,
    56  or  a  sale of secured property pursuant to the uniform commercial code,
        A. 1730--D                          6
 
     1  or the sale of property which is subject to a lien or assignment  pursu-
     2  ant to the laws of the state of New York.

     3    e.  the  provisions  of subdivision one of this section, subparagraphs
     4  (i) and (ii) of paragraph f of subdivision two of this  section  and  of
     5  paragraph  a  of  subdivision  three  of this section shall not apply to
     6  auctions of thoroughbred horses,  provided  that  the  results  of  such
     7  auction, including whether or not a reserve price was met, are published
     8  within twenty-four hours.
     9    §  3.  Subdivision  3  of  section  23  of the general business law is
    10  amended by adding a new paragraph f to read as follows:
    11    f.  In the event an auctioneer, auction or affiliate offers floor plan
    12  financing or extends  a  loan  to  a  purchaser,  the  auctioneer  shall
    13  disclose  in  a  general announcement at the commencement of the auction

    14  that bidders may be participating in the  sale  who  have  been  offered
    15  floor  plan  financing or a loan by the auctioneer, auction or affiliate
    16  or words that convey substantially the same message.
    17    § 4. This act shall take effect on the sixtieth  day  after  it  shall
    18  have become a law.