KRS 330.220: Lots or parcels subjects of separate sales -- When auction is complete --

Absolute auction -- Presumption of reserve auction -- Bids by seller --

Avoidance of sale -- Prohibitions.

(1) If real or personal property is offered in lots or parcels in a sale by auction, each lot

or parcel shall be the subject of a separate sale. This subsection shall not preclude

real or personal property from being offered for bidding individually or in some

form or combination.

(2) Unless otherwise provided in the conditions of sale for auctions regarding horses or

any interests therein, a sale by auction is complete when the auctioneer so

announces by the fall of the hammer, announcing the item sold, and the successful

bidder's identification or in other customary manner. If it becomes immediately

apparent at the close of the bidding that the auctioneer and a bid assistant or

ringman have acknowledged the same bid from different bidders, the auctioneer

may continue the bidding between the disputed bidders. When a bi d is made while

the auctioneer is in the process of completing the sale by auction, the auctioneer

may continue the bidding or declare the real or personal property sold under the bid

on which the hammer was falling.

(3) No auction shall be advertised as " absolute" nor shall any advertising contain the

words "absolute auction" or the word "absolute" or words with similar meaning nor

shall any licensee offer or sell any real or personal property at absolute auction

unless:

(a) There are no liens or encumbran ces on the real or personal property, except

property tax obligations, easements, or restrictions of record, in favor of any

person, firm, or corporation other than the seller, or unless each and every

holder of each and every lien and encumbrance, by exec ution of the auction

listing contract, or otherwise furnishing to the auctioneer written evidence of a

binding commitment therefor, shall have agreed to the unqualified acceptance

of the highest bid for the property, without regard to the amount of the hig hest

bid or the identity of the high bidder; or, alternatively, that a financially

responsible person, firm, or corporation, by execution of the auction listing

contract or by otherwise furnishing to the auctioneer written evidence of a

binding commitment therefor, shall have absolutely guaranteed the forthwith

and complete discharge and satisfaction of any and all liens and encumbrances

immediately after the sale or at the closing, without regard to the amount of

the highest bid received, or the identity of the high bidder; and

(b) There is the bona fide intention at the time of the advertising and at the time

of the auction to transfer ownership of the real or personal property, regardless

of the amount of the highest and last bid, to the high bidder, subj ect to the

provisions of subsection (5)(b) of this section, that intent existing without

reliance on any agreement that any particular bid or bid level must be made or

be reached, below which level the real or personal property would not be

transferred to the high bidder; and

(c) The auction listing contract contains a binding requirement that the auction be

conducted without reserve, and includes an acknowledgment that the seller, or

anyone acting upon behalf of the seller, shall not bid at the absolute au ction,

or otherwise participate in the bidding process.

(4) Compliance with subsection (3) of this section shall not prohibit:

(a) A secured party or other lienholder who is not the seller from bidding at an

absolute auction, providing that such bidding do es not constitute, nor is it

tantamount to the direct or indirect establishment or agreement to the

establishment of a reserve price on the real or personal property by the seller

or by the auctioneer, or by anyone aiding or assisting, or acting upon behalf of,

the seller or the auctioneer; or

(b) Any individual party to the dissolution of any marriage, partnership, trust,

limited liability company, or corporation from bidding as an individual entity

apart from the selling entity, on real or personal proper ty being sold at auction

pursuant to that dissolution; or

(c) Any individual party or heir of a deceased person's bona fide estate from

bidding as an individual entity, apart from the selling entity, on real or

personal property being offered at auction pursuant to that estate settlement; or

(d) The inclusion of nonmisleading advertising of certain real or personal

property to be sold at "absolute auction" and the nonmisleading advertising of

certain real or personal property to be offered at auction with r eserve, within

the same advertisement, or for sale at the same date and place, providing that

advertisement shall make clearly apparent through equal or appropriate

emphasis, which real or personal property is being offered by each method.

(5) (a) Any auct ion sale is, without requirement of announcement at any time,

presumed to be with reserve unless the real or personal property is in explicit

terms offered at absolute auction. An auction without reserve means an

absolute auction. An auction with reserve m eans the real or personal property

may be offered subject to the seller's confirmation or subject to a certain

reserve price. In an auction with reserve, the auctioneer may withdraw the real

or personal property at any time until he or she announces comple tion of the

sale. In an absolute auction, after the auctioneer calls for bids on an article, lot,

or parcel, that article, lot, or parcel shall not be withdrawn unless no bid is

made within a reasonable time.

(b) At both reserve auctions and without reserve auctions, the auctioneer may

establish reasonable minimum bid increments once an opening bid has been

offered.

(6) (a) The provisions of this chapter shall not prohibit any licensee from bidding on

his or her ow n behalf at any auction sale, whether absolute or with reserve, if

his or her option to do so has been fully disclosed, including disclosure to the

seller.

(b) Except as provided in subsection (4) of this section, the seller may not bid at

an absolute auct ion, nor may anyone bid upon his or her behalf. No licensee

shall knowingly receive a bid by or on behalf of the seller at an absolute

auction.

(c) Bids may be made by the seller, or upon the seller's behalf, at any auction with

reserve, provided that full disclosure has clearly been made that liberty for

bidding is retained. No licensee shall knowingly receive a bid in the absence

of full disclosure. If the auctioneer knowingly receives a bid on the seller's

behalf or the seller makes or procures a bid and notice has not been clearly

given that liberty for bidding is reserved, the buyer may avoid the sale or take

the real or personal property at the price of the last good faith bid prior to the

completion of the sale.

(d) There shall be no requirement that the reserve be announced when it is

attained.

(e) Nothing in this subsection shall be construed to alter or diminish the

provisions of KRS 330.210.

(7) (a) At any absolute auction, any advertisement or representation of a minimum or

suggested starting bid is prohibited.

(b) At any reserve auction, any advertisement or representation of a minimum or

suggested starting bid is prohibited unless:

1. The minimum or suggested starting bid advertised or represented is

sufficient to satisfy the auction listing cont ract stated reserve or

confirmation amount; and

2. The auction listing contract contains a binding acknowledgment by the

seller that permission has been granted for disclosure.