Extension Policy for Auction Houses
Extension Policy Requirements for Auction Houses
Auction houses are responsible for presenting a clear statement of their policy regarding buyer extension requests to buyers as well as to sellers. Policy statements should contain the following items of information:
1. The allowable time the buyer is permitted to request extension from the receipt of a lot(s) must be stated. It is recommended that this period not exceed fourteen days. The terms must be stated so buyers clearly understand their responsibilities.
2. The Cost of Certification should be explained under all conditions. If cost limitations are imposed on certification by the auction house in the event of a bad certificate, the minimum the house will repay the buyer will be the actual certificate costs to a maximum of $100.00, plus postage costs for the certification service and the return of the lots to the auction house.
3. A specific list of acceptable certification services must be stated Buyers must request and the house must approve the use of unlisted certifiers prior to the buyer requesting extension. Time involve here shall not be considered in the minimum time a buyer has to request extension.
4. A policy stating what conditions constitute a “bad” certificate must be included. For example, a fault, such as a thin mentioned in the lot write-up and also on the certificate, does not mean the auction house is responsible. Also, a stamp listed with “numerous faults” or simply “faults” cannot be returned by the buyer for statement of a specific fault/faults by the certifier. Conversely, in any one of the above examples, should an item be found to be counterfeit of not the correct stamp, the auction house would of course be liable since the description was inaccurate. The viewing of a stamp or stamps should not negate the buyer’s right of return if the certificate mentions an undescribed fault or counterfeit, unless such condition was previously announced prior to the sale of the lot.
5. The Buyer shall not have a return option on stamps indelibly marked by a certification service. Auction houses are to provide instruction/information to buyers regarding this forfeiture of their return privilege.
6. The auction house must maintain the complete records on extensions. In the event of a claim by the buyer or seller against the house, such records will be provided to the ASDA for review. The ASDA Auction Review Committee will consider the absence of adequate records and/or information provided to parties grounds for a negative opinion
7. The auction house is responsible for timely follow-up on extensions with buyers as well as with sellers. Such follow-up should include, but not be limited to, contacting the appropriate expertising service for a “status” report. It is suggested such follow-ups occur initially within (120) days of the sale date, with additional follow-ups every (30) days. Copies of all such correspondence should be maintained until each transaction has been completely accepted by both the buyer and seller.
8. The buyer must provide the auction house with Statement of Auction (copy of extension request). In the absence of receiving it, the buyer may forfeit his right to the benefit of extension requests. The auction house is responsible for the proper policing of customers to insure sellers. Are paid promptly and not necessarily delayed due to buyer inaction. Such instruction must be provided by the buyers prior to requesting extensions, preferably in the Conditions of sale. The buyer shall have thirty days from the certificate date to notify the auction house or forfeit right of return.
9. The auction house’s policy on the handling of funds received from the buyer pending certification must be stated. A statement should be included indicating whether or not interest is to be paid the seller, the specific time interval, and at exactly what interest rate or terms. For example, the Treasury bill rate of interest at the time funds are due and payable is an acceptable basis and is used by many houses. The rate of interest charged to delinquent accounts may vary according to the houses’ policy.
10. The auction house must inform both the buyer and the seller of their refund policy in the event of a negative opinion regarding such action. The time limit of complete settlement by the auction house to the buyer providing funds in advance of certification is (30) days. Thereafter, the auction house will be considered in default. The auction house should endeavor to have submitter provide information relative to 1) expert committee used; 2) date of submission; 3) certificate # (can be obtained through use of a return postcard to auction house).
11. Items sent for “reconsideration” will be considered as if the original opinion has not yet been received by submitter/buyer. Items receiving “No Opinion” certificates will be considered as a “No Sale” at the option of the buyer.
It is the intent of these policies to assure that ASDA Qualified Public Auctioneers maintain adequate follow-up and accounting extensions, as well as a definitive statement of policy to both buyer and seller. Auction houses failing to maintain adequate records risk loss of their QPA status as well as violating the ASDA Code of Ethics. Conversely, lots said to have been submitted by buyer but not done so will result in forfeiture of the buyer’s return privileges, at the option of the QPA.
It is suggested that the addresses of acceptable Authentication Services be listed in the auction catalog for easy reference along with the auction houses’ explanation of their procedures and policies. It is also suggested that auction houses list their status as Qualified Public Auctioneer and their compliance with QPA Policy, as well as the address of the ASDA.
It is not the intent of the ASDA or the Auction Committee to deter the normal function and speed of business. Many cases of abuse and confusion in this area indicate that a clear policy statement by the ASDA Qualified Public Auctioneers is necessary. Adequate records are required, not voluntary. QPA status is intended to virtually guarantee buyers and sellers straightforward and fair dealing.