Auctions - Buying & Selling
This Alberta Government Service's tipsheet is intended to provide general
information and is not a substitute for legal advice. (Also available in
downloadable PDF version.)
Consumer Tips - Fair Trading Act
If you buy or sell goods through a public auction
in Alberta, it is important to know that the
business holding the auction must be licensed
by the province and post security.
The Fair Trading Act, the Public Auctions
Regulation and Section 57 of the Sale of Goods
Act regulate public auction businesses in
Alberta. Goods sold at Internet auctions are not
covered by the public auction legislation. Only a
qualified auctioneer (as defined in the
regulation) can conduct the bidding at a public
The following are exempt from licensing
requirements but must use a qualified
auctions held by religious, charitable, or
livestock auctions held by a livestock dealer
licensed by Livestock Identification
auctions to which the Civil Enforcement Act
sales held because of a court order; and
goods taken in distress for the recovery of
tax or other legislated levies.
Sales of real estate by public auction usually
combine the services of a real estate broker and
an auctioneer. The Real Estate Act regulates
this type of sale. For more information you may
contact the Real Estate Council of Alberta.
Responsibilities of the Business
Every public auction sales business must give
the best possible service to its consignors and
all persons attending a sale by public auction.
The business is solely responsible for all the
money received or payable for goods sold at
auction. Its fees must be reasonable and
comparable to those set by the industry. The
business is responsible for the actions of its
employees and agents.
Section 6 of the Fair Trading Act deals with
unfair practices against consumers. This section
applies to consumer transactions in public
No auctioneer or auction sales business may
make statements in their advertising or when
conducting an auction that misrepresent the:
quality, quantity, use, size origin, content or
value of any goods intended for sale at the
terms of the sale; or
policies or services of the auctioneer or the
auction sales business.
Conditions of the Sale
Before a sale begins the auctioneer, or another
person, must read to those present, the
conditions of the sale, the name of the auction
sales business conducting the sale and its
licence number. The conditions of the sale must
be posted in a prominent place at the auction
and on the bid cards. If a bidder is not attending
the sale in person, the business must provide
him/her with information on the conditions of the
There may be liens on goods for which you plan
to bid. Before the auction sale is held the auction
sales business is required to take a statutory
declaration from people who consign an item
valued at over $1,000. The statutory declaration
must identify all liens and encumbrances on the
goods. If known, the lien holder will be notified
about the sale and will be paid before the
An auction sales business tries to check the
validity of a statutory declaration. However, if
you buy something that is found to have an
undeclared lien against it, you may have a legal
dispute with the consignor, the auction sales
business or both. In that case you should seek
If possible, before bidding on a large-ticket item
such as a vehicle, ask a Registry Agent to do a
search of the Personal Property Registry to see
if there are any liens or encumbrances on the
goods you plan to bid on. If there are and you
decide to buy the item specify that anyone with
an interest in the goods be paid before the
consignor. Be aware that checking the Personal
Property Registry will not reveal liens registered
outside the province. There will be a charge to
do a lien search.
Registry Agents can be found on the Web site
; or by calling (780) 427-7103 or toll free 310-0000.
Removal of Goods Purchased at the Sale
You may not remove the goods you purchased
at a public auction sale until you have paid the
purchase price to the auction sales business or
you have made other arrangements for
Information for Buyers
You can pick up a bargain at an auction
but you need to know what you are doing .
go as a spectator first and see what
Before the auction do your homework. Make
sure you know what you are buying.
Preview the items offered for sale. All the
items in the sale will be available for public
viewing sometime before the auction. It is
wise to take this opportunity to closely
examine items of interest.
Check the condition of goods before the sale.
If the auctioneer makes a claim about an
item, it must be true.
Comparison shop before an auction to
determine the appropriate value of goods
offered for sale.
Decide the maximum you can afford to
spend and stick to it.
Before bidding, find out what methods of
payment the business accepts. Make sure
you read, and be certain that you understand
the terms and conditions of sale and any
special conditions that apply to certain
Auction sales business must tell the public
before the sale starts that some of the goods
are subject to a reserve bid.
An employee of an auction sales business
conducting the auction is allowed to bid on
items but only if he/she intends to buy those
items they have bid on.
An auctioneer must announce the way in
which the sale of an item is completed. It
could be by the fall of a hammer or the word
Until the sale of an item is completed, you
can retract your bid. However, once the
auctioneer indicates the item is sold, you are
responsible to pay for the item. Bid carefully.
Normally no refunds or exchanges are
allowed at an auction. Under contract law,
the sales agreement is binding on both
Once an unreserved item has been offered
for sale and a bid has been made, the
auctioneer cannot withdraw that item from
Check to see if you will be charged a
.buyer.s premium. as part of the total cost of
the item you purchased.
You have to pay GST on most auctioned
Make sure you know what currency the
bidding is in for that particular sale.
Information for Consignors
When you consign your goods for sale by an
auction sales business you are entering into
a contractual agreement. The business
agrees to take your goods and sell them; you
agree to pay for the service. Fees may vary
between auction sales businesses.
You can check the reputation of an auction
sales business by gathering information from
personal contacts, the Auctioneers.
Association of Alberta, the Auctioneers
Association of Canada and the Better
Alberta Government Services can tell you if
an auction sales business is licensed and
has provided the security required by
legislation. Information on licensed
businesses may be found on the department
Web site at www.gov.ab.ca/gs under .Search
for a Licensed Business.. You can also
contact the Consumer Information Centre in
Edmonton: (780) 427-4088 or toll free in
The minimum security for an auction sale
business is $25,000. If the claims against a
security are greater than its value, the
security amount is prorated among the
You can ask the auction sales business to
arrange for special performance security to
cover the consignment of expensive goods.
Expect to pay the cost yourself.
If you want to get an amount close to the
price you want for your goods you can talk to
the auction sales business about setting a
Unless your goods are offered as reserve bid
items, a minimum selling price cannot be
guaranteed no matter what you are
promised. The goods must be sold to the
highest bidder once bidding has begun.
It is an offence for you or your agent to bid
on your own goods.
All terms and conditions of your consignment
agreement should be in writing. Include
details of pricing arrangements; the
commission rate; the administration charges
for things like storage, insurance, cleaning
and repair. Ask if you will be charged a fee
for goods that do not sell. Keep a description
of your consigned goods and a copy of the
contract for future reference.
Check to see if your goods are covered by
the auction sales business. insurance or if
you have to carry your own insurance until
the time the item is sold or picked up by the
When your goods are sold, the auction sales
business must deposit all money received
into a trust account. Within 21 days of the
sale, the business must pay you the selling
price less the agreed upon costs and any
amounts owed to lien holders. The business
must send you and any lien holders an
itemized statement showing the amount
received for the goods.
An auction sales business is responsible for
getting payment before releasing your goods
to the buyer. If the auction business doesn.t
get paid, it.s still required to pay you.
Keep a copy of your statutory declaration for
any goods valued over $1,000.
- Conditions Of Sale - The legal terms that
govern the conduct of the auction including
the acceptable methods of payment, terms,
buyer.s premium, reserve bids or any other
limiting factors of an auction.
- Caveat Emptor - A Latin term meaning "let
the buyer beware". This means that the
buyer takes the risk regarding the quality or
condition of the property purchased unless it
is protected by warranty.
- "As Is" - Selling the property without
warranties as to the condition and/or the
fitness of the property for a particular use.
- Bidder Number - The number issued to each
person who registers at an auction.
- Bid - A prospective buyer.s indication or offer
of a price he or she will pay to purchase
property at an auction. Bids are usually in
standardized increments established by an
- Reserve Bid - The minimum price that a
seller is willing to accept for property to be
sold at auction. If no one bids that amount or
more the item will not be sold.
- Opening Bid - An auctioneer may open the
bidding on an item stating a certain dollar
amount. This does not mean you have to bid
- Minimum Bid - This is the lowest acceptable
amount at which bidding must start.
- Absentee Bid - A procedure that allows a
buyer to participate in the bidding process
without being physically present. The person
submits in advance a written or oral bid that
is the top price they are willing to pay for any
given item. The rules and procedures for
absentee bids are unique to each auction
- Lots - The auctioneer will tell you when the
items are being sold in lots. For example
there may be 10 items in one lot and they will
be auctioned together for one price.
- Inspection/Viewing/Preview - Specified date,
time and place property is available for
prospective buyer viewing and evaluation.
- Buyer's Premium - The percentage of the
high bid, or a flat fee added to the high bid to
determine the total contract price to be paid
by the buyer.
For more information
For information about the Public Auctions
Regulation or if you have concerns about an
auction sale or an auction sale business, call the
Alberta Government Services.
Edmonton: (780) 427-4088
Toll free in Alberta: 1-877-427-4088
The Public Auctions Regulation is available on
the Queen's Printer Web site at
For more information about auctions you can
Auctioneer's Association of Alberta at
www.albertaauctioneers.com or phone:
Real Estate Council of Albertaat
Phone: (403) 228-2954
or (toll free in Alberta)
Check the Better Business Bureaus' business
Better Business Bureau of Central and Northern
Edmonton: (780) 482-2341
Toll free: 1-800-232-7298
Better Business Bureau of Southern Alberta
Calgary: (403) 517-4222
Toll free: 1-800-661-4464
A current version of this tipsheet and other
tipsheets are available at the Alberta
Government Services' website at