STATE OF NEW YORK
________________________________________________________________________
3668
2009-2010 Regular Sessions
IN SENATE
March 27, 2009
___________
Introduced by Sens. FLANAGAN, HANNON, VOLKER -- read twice and ordered
printed, and when printed to be committed to the Committee on Consumer
Protection
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. Auction requirements. 1. The auctioneer will be held responsi-
7 ble for the truth of any statement contained in any catalogue, adver-
8 tisement, announcement, press release or other public statement made by
9 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:
16 (i) All fees, commissions and charges to be paid by the consignor to
17 the auctioneer or his or her agents, principals, employees, employers or
18 assigns shall:
19 (1) to the extent practicable, be itemized and specified as to amount
20 (which may be stated as a percentage of the reserve price or any final
21 bid), and
22 (2) if such itemization and specification as to amount is not practi-
23 cable, be described with sufficient particularity to inform the consig-
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD04810-01-9
S. 3668 2
1 nor of the nature of the services for which such fees, commissions and
2 charges will be imposed.
3 (ii) That as of the date of the auction the consignor warrants that he
4 or she has complete and lawful right, title and interest in the property
5 auctioned, and that the consignor shall indemnify the auctioneer, his or
6 her agents, principals, employees, employers or assigns in the event of
7 any defect in title, and that an intended beneficiary of this warranty
8 is the ultimate purchaser at auction.
9 c. Where articles are referred to by catalogue or advertisement as
10 having been obtained from any specific person, place or source, such
11 articles must be separately enumerated and identified.
12 d. If an auctioneer or auction house has any interest, direct or indi-
13 rect, in an article, including a guaranteed minimum, other than the
14 selling commission, the fact such interest exists must be disclosed in
15 connection with any description of the article or articles in the cata-
16 logue or any other printed material published or distributed in relation
17 to the sale. Such notice may be denoted by a prominent symbol or letter
18 which will refer the reader to an explanation of the nature of the
19 interest the symbol or letter denotes. In addition, prior to the
20 commencement of the auction, the auctioneer shall orally announce that
21 those lots in which the auctioneer has an interest covered by this
22 subdivision have been designated in the auction catalogue and the symbol
23 used to denote such interest.
24 e. Where a consignor is to receive a rebate commission in whole or in
25 part, or where he or she will be permitted to bid upon and to buy back
26 his or her own article at the sale, disclosure of such a condition must
27 be made in connection with any description of the item or items so
28 affected in the catalogue or any other printed material published or
29 distributed in relation to the sale. The existence of such a condition
30 may be denoted by a symbol or letter which will refer the reader to an
31 explanation of the nature of the interest the symbol or letter denotes.
32 f. (i) If the consignor has fixed a price below which an article will
33 not be sold, the "reserve price", the fact that the lot is being sold
34 subject to reserve must be disclosed in connection with the description
35 of any lot so affected in the catalogue or any other printed material
36 published or distributed in relation to the sale. The existence of a
37 reserve price may be denoted by a symbol or letter which will refer the
38 reader to an explanation of reserve price. For the purpose of paragraphs
39 (d),(e) and (f) of this subdivision, advertisements in newspapers or
40 other periodicals shall not constitute printed material. Where no print-
41 ed material is provided in connection with the auction an auctioneer
42 shall have available during any advertised inspection period information
43 as to whether a particular lot is to be sold subject to reserve and
44 shall announce before he or she commences the auction that such informa-
45 tion is available upon request.
46 (ii) When a lot is not subject to a reserve price, the auctioneer
47 shall not indicate in any manner that the lot is subject to a reserve
48 price.
49 g. In the event an auctioneer extends a loan to a purchaser, the
50 auctioneer shall disclose in a general announcement at the commencement
51 of the auction that bidders may be participating in the sale who have
52 been offered a loan by the auctioneer. In addition, this disclosure must
53 also be made on signs prominently displayed in the auction room and at
54 the entrance thereto. Such signs shall include the following disclosure,
55 or convey substantially the same message:
S. 3668 3
1 "Bidders may be participating in the sale who have been offered a loan
2 by the auctioneer."
3 h. The auctioneer shall:
4 (i) Provide information as to the number of jewels, approximate number
5 of carats, number of points (diamond), principal metal content, and
6 manufacturer's name, if known, for all articles of jewelry, including
7 watches. The information required by this paragraph shall be provided
8 either in the catalogue descriptions of such items or by attaching to
9 each such item a tag or marking containing the information.
10 (ii) Issue or cause to be issued to each purchaser an invoice which
11 shall contain all the following information:
12 (1) The auctioneer's name, business address and license number;
13 (2) The name and address of the auctioneer's employer or principal;
14 (3) The date of sale;
15 (4) The lot number, description, quantity and selling price of each
16 lot;
17 (5) The total amount of purchase with a separate statement of sales
18 tax;
19 (6) All deposits made against the purchase price.
20 (iii) Advertise each auction sale at least once in the seven day peri-
21 od immediately preceding the auction.
22 (iv) Notify the person whose property is being auctioned (and any
23 other person entitled to be notified according to law) as to the date,
24 place and time of sale.
25 (v) Permit (prior to the start of the auction) prospective purchasers
26 to inspect each and every article to be offered for sale.
27 (vi) Furnish to any buyer, consignor or owner of an article, upon
28 request, information as to the whereabouts of that article that comes
29 into his or her possession or that is sold or offered for sale by him or
30 her.
31 (vii) Send checks for the net amount received on all sales to persons
32 entitled to the proceeds thereof within fourteen days of date of sale
33 (except as otherwise agreed in writing or otherwise provided by law)
34 together with a complete detailed statement including lot number, quan-
35 tity, description and selling price of each lot; total amount received
36 on sale; and disbursements listing commission, cost of advertisement,
37 labor, charges and allowances, and sundry expenses.
38 (viii) When an auctioneer has a number of the same kind of articles to
39 be sold and intends to dispose of each of them at the amount at which
40 the first is sold, he or she shall make an announcement to that effect
41 prior to opening the sale of the first article.
42 i. If an auctioneer makes loans or advances money to consignors or
43 prospective purchasers, this fact must be conspicuously disclosed in the
44 auctioneer's catalogue or printed material. If the auctioneer does not
45 provide any such printed material, he or she shall make the disclosure,
46 either by conspicuously posting a sign, or in another similarly conspic-
47 uous manner, at the time of any advertised inspection periods prior to
48 the auctions. For the purpose of this paragraph advertisements in news-
49 papers or other periodicals shall not constitute printed material.
50 j. Except to implement a reserve price, and subject the requirements
51 of paragraph b of subdivision three of this section, no auctioneer, his
52 or her consignor, employee, employer, assignee or agent for any of them
53 may bid for his or her own account at any auction if any of them shall
54 have access to information not otherwise available to the public regard-
55 ing reserves, value or other material facts relating to the articles
56 which are the subject of the auction, unless their status as a person
S. 3668 4
1 with inside information and intended participation is disclosed in the
2 auctioneer's catalogue and any printed material and on signs posted at
3 the auction.
4 k. Wherever an estimate or estimated value of an item or lot is
5 published in a catalogue or any other printed material published or
6 distributed in relation to an auction sale, a general description of the
7 estimate and its meaning and function must be included in such printed
8 material. For the purpose of this paragraph, advertisements in newspa-
9 pers or other periodicals shall not constitute printed material. Where
10 no printed material is provided, and an estimate or estimated value is
11 announced or disseminated in any manner, a general description of the
12 estimate and its meaning and function must be available for distribution
13 and its availability must be announced at the commencement of the
14 auction.
15 l. In any advertisement indicating an auction sale due to a business'
16 loss of lease or liquidation, the auctioneer must include the name of
17 the consignor or business authorizing the auction. In any sale adver-
18 tised as pursuant to a security agreement, the name of the debtor shall
19 be indicated conspicuously.
20 3. a. If the reserve price is not bid, the auctioneer may withdraw a
21 lot from sale. At the time of such withdrawal, and before bidding on
22 another lot begins, the auctioneer shall announce that the withdrawn lot
23 has been "passed", "withdrawn", "returned to owner" or "bought-in".
24 b. Before bidding on any lot has reached its reserve price no auctio-
25 neer may make or place consecutive or successive bids, or place bids in
26 response to bids from others, on behalf of the consignor, unless the
27 fact that the auctioneer will or may bid in such a manner is clearly and
28 conspicuously disclosed in any catalogue and any other printed material
29 published or distributed in connection with the sale. For the purposes
30 of this paragraph advertisements in newspapers or other periodicals
31 shall not constitute printed material. This disclosure must also be made
32 on signs prominently displayed in the auction room and at the entrance
33 thereto, and must be announced by the auctioneer immediately prior to
34 the commencement of any auction.
35 The sign required by this paragraph must be at least twelve inches by
36 eighteen inches in dimension with letters at least one inch high, and
37 must read as follows, or convey a substantially similar disclosure:
38 The auctioneer may open bidding on any lot by placing a bid on behalf
39 of the seller. The auctioneer may further bid on behalf of the seller,
40 up to the amount of the reserve, by placing successive or consecutive
41 bids for a lot, or by placing bids in response to other bidders.
42 c. After bidding has reached the reserve price of a lot:
43 (i) the auctioneer may not bid on behalf of the consignor or the
44 auction house; and
45 (ii) the auctioneer may only accept bids from persons other than the
46 consignor or the auction house except absentee telephone, order or other
47 agent's bids;
48 (iii) this paragraph shall not apply to auction sales conducted pursu-
49 ant to an order of a court of competent jurisdiction, including an order
50 of a bankruptcy judge or trustee, or a sale of secured property pursuant
51 to the Uniform Commercial Code, or the sale of property which is subject
52 to a lien or assignment pursuant to the laws of the state of New York.
53 d. In no event shall the reserve price for any lot exceed the minimum
54 estimated value of the lot as published in any catalogue or other print-
55 ed material distributed by the auctioneer.
S. 3668 5
1 4. a. An auctioneer may not disclaim warranty of title of any item
2 sold at auction. The auctioneer shall reimburse any purchaser in an
3 amount equal to the successful bid at auction plus any buyer's commis-
4 sion paid in the event it is determined that the purchaser has not
5 acquired transferable title to the item.
6 b. At the auction sale premises only exterior signs may be displayed
7 advertising the auction sale but the same shall not be excessive in
8 size.
9 c. An auctioneer may not:
10 (i) offer more than one article for sale at any one time unless the
11 combining of articles or lots is so indicated prior to the initial bid.
12 (ii) represent an article to be guaranteed by the manufacturer or the
13 owner unless a manufacturer's or owner's guarantee accompanies the arti-
14 cle.
15 (iii) offer an article contained in a carton, package or other
16 container commonly known as a blind article unless prior to the offer it
17 is announced that the highest bidder may reject the article if not
18 satisfactory to him or her. This provision does not refer to an auction
19 of articles in bulk where a sample is displayed and balance of articles
20 are represented to conform to the sample.
21 (iv) accept as payment or exchange any article previously knocked down
22 or sold to a successful bidder. The article knocked down or sold must be
23 delivered to the bidder or, if the auctioneer is willing and at the
24 bidder's election, the purchase price refunded in full. No other article
25 may be offered to said bidder as a substitute or replacement. Such
26 refund shall take place within a reasonable time or may be applied as
27 part payment or payment for any other article purchased at auction by
28 the same bidder.
29 5. The provisions of this section shall be enforced by the county
30 officer charged with enforcement of consumer protection within such
31 county, except that in the city of New York, by the commissioner of
32 consumer affairs of such city.
33 § 3. This act shall take effect on the sixtieth day after it shall
34 have become a law.