It is now law that any Pennsylvania (PA) self storage
operator who chooses to hold lien sales online, must use a licensed auction company.
Most of the companies providing an “online portal” for self storage lien sales
do not carry auctioneer licenses or auction company licenses. Citing the eBay
model of business, they claim online auctions are not “auctions”; they are
simply a web portal or a social sharing site where people can list things for
sale. The state of Pennsylvania
just answered that argument. On July 20, 2016, PA Governor, Tom Wolf, signed
into law PA House Bill 325 regarding the licensing of auctioneers and the
definition of an auction. In the law, the definition of an auction has been
modified to include any online auctions. The natural response of the “online
web portals” would likely be “we don’t conduct auctions, we are a simply a web
portal.” Pennsylvania
law makers must have anticipated this response because they took the definition
of an auction a few steps further. They define “auction” or “sale at auction”
as the following.
A method for the sale or lease of property,
or any interest in property by means of
verbal exchange, regular mail,
telecommunications, the internet, an electronic
transmission or a physical
gesture…in the form of bids, in an effort to advance
the amount of the bids to obtain the
highest or most favorable offer.
This includes: live auctions, online
auctions, real time auctions, and any similar
such events as may be devised with
the development of technology.
If your sale is on the internet and involves bidding, it is
considered an auction in the State of Pennsylvania
and must be licensed by the PA Auctioneer Association. It is true that
individual owners or their agents can still conduct their own auctions without
the use of a licensed auctioneer. However, if you utilize an auctioneer and
auction company that engages in the aforementioned activities, they must carry
auction licenses. The company providing you with the technology to hold your
sales is not an agent of you. Do you employee them? Do your various insurance
policies cover them? Are you actually overseeing any of the actual sales? They
are not afforded the same protections you are.
The online web portals or website marketplaces might try to
claim since storage auctions do not require a license, they are not required to
have one either. This is not true. If you use an auctioneer to come to your
facility and conduct auctions, they absolutely must be licensed in accordance
with the law. The law in PA now states that any company using technology to
promote bids through electronic means is in fact engaging in auctioneering and must
be licensed in accordance with the law.
While it might be easy for an online web portal or website
marketplace to hire an auctioneer, that will not suffice to satisfy the
requirement. The law also now requires the company to have an auction company license.
This will require registering as a business with the PA Secretary of State,
obtaining insurance bonds only issued to auction companies, obtaining a trust
bank account for auctioneers, and then finally obtaining the auction company
license from the PA Auctioneer Association.
What does this have to do with you? Why do you care? It is
very likely the State of PA
is planning to pursue action against companies who do not comply. The language
of the law is very direct and the wording is strong. Not complying could result
in termination of operations and even punitive damages. That means your sale
you have worked so hard to get into place would disappear from the internet and
you will not have fulfilled your legal obligations as a storage operator. That
would open you to liability on a wide scale.
(1) the person, corporation, limited liability company,
partnership, or other entity providing the Internet auction listing service is
located in the State of Illinois;
(2) the prospective seller or seller, prospective lessor or lessor, or prospective purchaser or purchaser is located in the State of Illinois and is required to agree to terms with the person, corporation, limited liability company, partnership, or other entity providing the Internet auction listing service, no matter where that person, corporation, limited liability company, partnership, or other entity is located; or
(3) the personal property or services offered for sale or lease are located or will be provided in the State of Illinois.
(2) the prospective seller or seller, prospective lessor or lessor, or prospective purchaser or purchaser is located in the State of Illinois and is required to agree to terms with the person, corporation, limited liability company, partnership, or other entity providing the Internet auction listing service, no matter where that person, corporation, limited liability company, partnership, or other entity is located; or
(3) the personal property or services offered for sale or lease are located or will be provided in the State of Illinois.
These changes are not surprising. State laws are going to
continue to evolve with technology. The reason auctioneer associations exist is
because there is a need to regulate the professionals in the industry and hold
them accountable for how they handle your business dealings. There is no reason
to think this would not be extended to online practices. It is imperative for
storage operators to know about these changes and ask the right questions about
the people they are doing business with. The laws in Georgia
and Illinois
are already in effect. The law in PA becomes effective on September 20, 2016.
Is your auction provider in compliance?
About the Author - Cheli Rosa - Director of Marketing, Auctioneer, Company Administrator, Social Media Manager, Mom, Kite Flyer, Pinterest Addict and Amateur Scrapbooker.
Looking for Backblaze? Backblaze is favorite online backup service. Backing up your files to an off-site cloud server is an easy, affordable, and safe way to make sure that your most important files are safe.
ReplyDeleteIf you want to know more, Please check out here: backblaze
This is one of the best blogs on the internet. Really informational and amazing content.Independence Day Speech in Telugu
ReplyDelete