BILL NUMBER: SB 109 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 22, 2009
AMENDED IN SENATE APRIL 13, 2009
INTRODUCED BY Senator Calderon
JANUARY 28, 2009
An act to amend Sections 1812.601 and 1812.607 of the Civil Code,
relating to auctioneers.
LEGISLATIVE COUNSEL'S DIGEST
SB 109, as amended, Calderon. Auctioneers: real estate.
(1) Existing law regulates the activities of auctioneers and
auction companies and requires that they maintain a bond issued by a
surety company admitted in this state or an equivalent deposit.
Existing law defines auction in this regard and excepts from this
definition a sale of real estate or a sale of real estate with
personal property or fixtures or both in a unified sale, as
specified. Existing law requires auctioneers and auction companies to
post or distribute to the audience the terms, conditions,
restrictions, and procedures under which goods will be sold at the
auction. A violation of certain of these provisions is punishable by
specified fines, and a violation of these provisions generally is a
misdemeanor.
This bill would remove the exception provided for real estate from
the definition of auction for the purposes described above, thereby
bringing real property auctions within those provisions. The bill
would require an auction company and auctioneer to post or distribute
to the audience a description of all fees, both refundable and
nonrefundable, that will be levied on bidders, as well as any changes
to those fees. With respect to auctions of real property auctioned
with reserve, the bill would require an auction company and
auctioneer to post or distribute to the audience a clear explanation
of the terms "auctioned with reserve" and "sale subject to seller
confirmation, approval, or acceptance," and the procedures and
timelines to be used in connection with sales that are subject to
these requirements. A violation of these provisions would be subject
to specified fines. The bill would require, for auctions of real
property auctioned subject to seller confirmation, approval, or
acceptance, that an auction company and auctioneer return
deposits and fees within 2 working days after the high
bidder's offer is rejected, or within 15 working days after the high
bidder's offer is made and the seller fails to respond to the offer.
By changing the definition of a crime, the bill would impose a
state-mandated local program.
(2) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1812.601 of the Civil Code is amended to read:
1812.601. (a) "Advertisement" means any of the following:
(1) Any written or printed communication for the purpose of
soliciting, describing, or offering to act as an auctioneer or
provide auction company services, including any brochure, pamphlet,
newspaper, periodical, or publication.
(2) A telephone or other directory listing caused or permitted by
an auctioneer or auction company to be published that indicates the
offer to practice auctioneering or auction company services.
(3) A radio, television, or similar airwave transmission that
solicits or offers the practice of auctioneering or auction company
services.
(b) "Auction" means a sale transaction conducted by means of oral
or written exchanges, which include exchanges made in person or
through electronic media, between an auctioneer and the members of
his or her audience, which exchanges consist of a series of
invitations for offers for the purchase of goods made by the
auctioneer and offers to purchase made by members of the audience and
culminate in the acceptance by the auctioneer of the highest or most
favorable offer made by a member of the participating audience.
However, auction does not include any of the following:
(1) A wholesale motor vehicle auction subject to regulation by
the Department of Motor Vehicles.
(2) A sale of real property pursuant to a nonjudicial foreclosure
governed by Article 1 (commencing with Section 2920) of Chapter 2 of
Title 14 of Part 4.
(3) A unified sale pursuant to subparagraph (B) of paragraph (1)
of subdivision (a) of Section 9604 of the Commercial Code.
(c) "Auction company" means any person who arranges, manages,
sponsors, advertises, accounts for the proceeds of, or carries out
auction sales at locations, including, but not limited to, any fixed
location, including an auction barn, gallery place of business, sale
barn, sale yard, sale pavilion, and the contiguous surroundings of
each.
(d) "Auctioneer" means any individual who is engaged in, or who by
advertising or otherwise holds himself or herself out as being
available to engage in, the calling for, the recognition of, and the
acceptance of, offers for the purchase of goods at an auction.
(e) "Employee" means an individual who works for an employer, is
listed on the employer's payroll records, and is under the employer's
control.
(f) "Employer" means a person who employs an individual for wages
or salary, lists the individual on the person's payroll records, and
withholds legally required deductions and contributions.
(g) "Goods" means any goods, wares, chattels, merchandise, or
other personal property, including domestic animals and farm
products, or real property.
(h) "Person" means an individual, corporation, partnership, trust,
including a business trust, firm, association, organization, or any
other form of business enterprise.
SEC. 2. Section 1812.607 of the Civil Code is amended to read:
1812.607. Every auction company and auctioneer shall do all of
the following:
(a) Disclose his or her name, trade or business name, telephone
number, and bond number in all advertising of auctions. A first
violation of this subdivision is an infraction subject to a fine of
fifty dollars ($50); a second violation is subject to a fine of
seventy-five dollars ($75); and a third or subsequent violation is
subject to a fine of one hundred dollars ($100). This section shall
not apply to business cards, business stationery, or to any
advertisement that does not specify an auction date.
(b) Post a sign, the dimensions of which shall be at least 18
inches by 24 inches, at the main entrance to each auction, stating
that the auction is being conducted in compliance with Section 2328
of the Commercial Code, Section 535 of the Penal Code, and the
provisions of the California Civil Code. A first violation of this
subdivision is an infraction subject to a fine of fifty dollars
($50); a second violation is subject to a fine of seventy-five
dollars ($75); and a third or subsequent violation is subject to a
fine of one hundred dollars ($100).
(c) (1) Post or distribute to the audience the terms, conditions,
restrictions, and procedures whereby goods will be sold at the
auction, and a description of all fees, both refundable and
nonrefundable, that will be levied as a condition of bidding, and
announce any changes to those terms, conditions, restrictions,
procedures, and fees prior to the beginning of the auction sale.
(2) With respect to auctions of real property, during which one or
more properties will be auctioned with reserve, post or distribute
to the audience a clear explanation of the terms "auctioned with
reserve" and "sale subject to seller confirmation, approval, or
acceptance," and the procedures and timelines to be used in
connection with sales that are subject to these requirements.
(3) A first violation of this subdivision is an infraction subject
to a fine of fifty dollars ($50); a second violation is subject to a
fine of one hundred dollars ($100); and a third or subsequent
violation is subject to a fine of two hundred fifty dollars ($250).
(d) Notify the Secretary of State of any change in address of
record within 30 days of the change. A violation of this subdivision
is an infraction subject to a fine of fifty dollars ($50).
(e) Notify the Secretary of State of any change in the officers of
a corporate license within 30 days of the change. A violation of
this subdivision is an infraction subject to a fine of fifty dollars
($50).
(f) Notify the Secretary of State of any change in the business or
trade name of the auctioneer or auction company within 30 days of
the change. A violation of this subdivision is an infraction subject
to a fine of fifty dollars ($50).
(g) Keep and maintain, at the auctioneer's or auction company's
address of record, complete and correct records and accounts
pertaining to the auctioneer's or auction company's activity for a
period of not less than two years. The records shall include the name
and address of the owner or consignor and of any buyer of goods at
any auction sale engaged in or conducted by the auctioneer or auction
company, a description of the goods, the terms and conditions of the
acceptance and sale of the goods, all written contracts with owners
and consignors, and accounts of all moneys received and paid out,
whether on the auctioneer's or auction company's own behalf or as
agent, as a result of those activities. A first violation of this
subdivision is a misdemeanor subject to a fine of five hundred
dollars ($500); and a second or subsequent violation is subject to a
fine of one thousand dollars ($1,000).
(h) Within 30 working days after the sale transaction, provide, or
cause to be provided, an account to the owner or consignor of all
goods that are the subject of an auction engaged in or conducted by
the auctioneer or auction company. A first violation of this
subdivision is a misdemeanor subject to a fine of five hundred
dollars ($500); and a second or subsequent violation is subject to a
fine of one thousand dollars ($1,000).
(i) Within 30 working days after a sale transaction of goods, pay
or cause to be paid all moneys and proceeds due to the owner or the
consignor of all goods that were the subject of an auction engaged in
or conducted by the auctioneer or auction company, unless delay is
compelled by legal proceedings or the inability of the auctioneer or
auction company, through no fault of his or her own, to transfer
title to the goods or to comply with any provision of this chapter,
the Commercial Code, or the Code of Civil Procedure, or with any
other applicable provision of law. A first violation of this
subdivision is a misdemeanor subject to a fine of one thousand
dollars ($1,000); a second violation is subject to a fine of one
thousand five hundred dollars ($1,500); and a third or subsequent
violation is subject to a fine of two thousand dollars ($2,000).
(j) Maintain the funds of all owners, consignors, buyers, and
other clients and customers separate from his or her personal funds
and accounts. A violation of this subdivision is an infraction
subject to a fine of two hundred fifty dollars ($250).
(k) Immediately prior to offering any item for sale, disclose to
the audience the existence and amount of any liens or other
encumbrances on the item, unless the item is sold as free and clear.
For the purposes of this subdivision, an item is "free and clear" if
all liens and encumbrances on the item are to be paid prior to the
transfer of title. A violation of this subdivision is an infraction
subject to a fine of two hundred fifty dollars ($250) in addition to
the requirement that the buyer be refunded, upon demand, the amount
paid for any item that is the subject of the violation.
(l) (1) Within two working days after an auction sale, return the
blank check or deposit of each buyer who did not purchase goods at
the sale.
(2) After an auction sale of real property sold subject to seller
confirmation, approval, or acceptance, within two
working days after the high bidder's offer is rejected, or
within 15 working days after the high bidder's offer is made and the
seller fails to respond to the offer, return all deposits and fees
collected from the bidder in connection with the auction.
(3) A first violation of this subdivision is an infraction subject
to a fine of one hundred dollars ($100); and a second or subsequent
violation is subject to a fine of two hundred fifty dollars ($250).
(m) Within 30 working days of any auction sale, refund that
portion of the deposit of each buyer that exceeds the cost of the
goods purchased, unless delay is compelled by legal proceedings or
the inability of the auctioneer or auction company, through no fault
of his or her own, to transfer title to the goods or to comply with
any provision of this chapter, the Commercial Code, or the Code of
Civil Procedure, or with other applicable provisions of law, or
unless the buyer violated the terms of a written agreement that he or
she take possession of purchased goods within a specified period of
time. A first violation of this subdivision is an infraction subject
to a fine of one hundred dollars ($100); and a second or subsequent
violation is subject to a fine of two hundred fifty dollars ($250).
SEC. 3. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.