21 NCAC 04B .0603. SALE PROCEEDS, ACCOUNTING AND ESCROW ACCOUNTS

(a)  Each payment made payable to the auctioneer/firm in which any portion belongs to others, and which are not disbursed to the seller on auction day, must be deposited in an escrow account for the benefit of the owner or seller of such property within three business days after receipt of same.

(b)  Any licensee who disburses any funds on auction day shall prepare a receipt or settlement statement in compliance with G.S. 85B-7.1(a) and maintain records in compliance with G.S. 85B-7.1(b).

(c)  Every auctioneer/firm that does not disburse all funds to the seller on auction day shall establish and maintain a separate bank account designated as "Custodial Account for Sellers Proceeds" or some similar identifying designation, to disclose that the depositor is acting as a fiduciary and that the funds in the account are trust funds.

(d)  Such custodial accounts for sellers proceeds must be established and maintained in banks or savings and loan associations located in the State of North Carolina whose deposits are insured by the Federal Deposit Insurance Corporation, or comparable state recognized insurance agency or program.

(e)  The Custodial Account for Sellers shall be drawn on only for payment of:

(1)           the net proceeds to the seller, or to any person that the auctioneer/firm knows is entitled to payment;

(2)           to pay lawful charges against the property which the auctioneer/firm shall in its capacity as agent, be required to pay; and

(3)           to obtain any sums due the auctioneer/firm as compensation for its services.

(f)  In the event of a dispute between the seller and buyer of goods or property or between the licensee and any person in whose name trust or escrow funds are held, the licensee shall retain said monies in his trust or escrow account until he has obtained a written release from the parties consenting to its disposition or until disbursement is ordered by a court of competent jurisdiction.

(g)  Each auctioneer/firm shall keep such accounts and records as will disclose at all times the handling of funds in such Custodial Accounts for Sellers Proceeds.  Accounts and records must at all times disclose the names of buyers and the amount of purchase and payment from each, also, the names of the sellers and the amount due and payable to each from funds in the Custodial Account for Sellers Proceeds.  The names of the buyers and amount of purchase and payment from each related to an individual seller shall be delivered to the seller within 14 days of a written request made within 90 days of settlement of a specific auction.

(h)  All trust or escrow account records and records of disbursement shall be available for inspection by the Commission or its designated agent, without advance notice, and copies shall be provided to the Commission upon request.

 

History Note:        Authority G.S. 85B-3(f); 85B-7.1; 85B-8(a);

Eff. June 1, 1991;

Amended Eff. April 1, 2003; January 1, 1995.