Before the auction is held, the auction sales business is required to take a statutory declaration from people who consign an item valued at more than $1,000. The statutory declaration must identify the owner of the goods and all liens and encumbrances on the goods.
An auction sales business will try 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 business or both. In that case, you should seek legal advice.
The goods you plan to bid for may have been pledged as the security for a loan or other debt. In other words, there may be a lien on the item. If known, the lien holder will be notified about the sale and will be paid before the consignor.
If possible, before bidding on an expensive item such as a vehicle, ask a registry agent to search the Personal Property Registry to see if there are any liens or encumbrances on the goods. If there are and you buy the item, specify that the lien holder is 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 Alberta government website at https://www.alberta.ca/registry-agents.aspx
- in the Yellow Pages under Licence and Registry Services
- by calling 780-427-7103 in Edmonton or toll free at 1-877-427-4088.
Mechanical Fitness Assessments
The Vehicle Inspection Regulation was amended to exempt auction sales businesses from having to make a Mechanical Fitness Assessment to all potential purchasers of the vehicle. Buyers should be aware that a vehicle bought at auction has no guarantee of being mechanically sound.
Removal of Goods Purchased at the Sale
You may not remove goods purchased at a public auction until you have paid the auction business or have made other arrangements for payment
Before you buy
- It is possible to pick up a bargain at an auction, but you need to know what you are doing. Go to an auction as a spectator first and see what happens.
- Do your homework before the auction. Make sure you know what you are buying.
- Preview the items offered for sale. All items for sale will be available for public viewing before the auction. Take this opportunity to 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 understand the terms and conditions of sale and any special conditions that apply to certain goods.
Bid carefully. Usually, no refunds or exchanges are allowed at an auction. Under contract law, the sales agreement is binding on both parties.
Check to see if you will be charged a “buyer’s premium” as part of the total cost of the item you purchase.
You have to pay GST on most auctioned items.
Make sure you know what currency the bidding is in for that particular sale.