We did pose that the UCC 2-328 has been applied to real estate and we should probably say, “real property” instead, as real estate is only the land and actual and/or constructive attachments.
However we’ll use “real estate” here as this is typically how this question is posed.
The UCC 2-328 was finally firmed as to language about 1952. Since then, all states have adopted the UCC 2-328 into their state law except for Louisiana. Louisiana courts rule as if it was adopted, interestingly enough, so one might fairly perceive the UCC 2-328 applies in all 50 of the states in the United States.
In the 1940’s when the UCC was being written, it was thought that the UCC would only apply to movable property, which might cross state lines. The theory was that the United States needed “uniform commercial codes” — a.k.a. UCC — for such transactions so that states would maintain the same rules concerning such.
We first wrote about the UCC 2-328 being applied to real estate auction cases here: Does the UCC 2-328 apply to real estate?
Further, noted here, it has been applied over and over in prominent (and precedent-forming) cases (namely in Illinois [1981,] Maine [1984 & 1973,] Massachusetts [1975], Kansas [2007], and Virginia [1972]):
Well v. Schoeneweis, 101 Ill. App. 3d 254, 257-58, 427 N.E.2d 1343 (1981); (holding that although U.C.C. 2-328 does not apply to auctions of real estate, the same laws apply to real and personal property.)
Chevalier v. Sanford, 475 A.2d 1148, 1149 (Me. 1984) (applying U.C.C. 2-328 by analogy.)
Forbes v. Wells Beach Casino, Inc., 307 A.2d 210, 219 (Me. 1973) (applying U.C.C. 2-328 and finding no significant difference between real and personal property law.)
Outpost Café, Inc. v. Fairhaven Savings Bank, 3 Mass. App. 1, 3, 322 N.E.2d 183 (1975) (applying U.C.C. 2-328 same as to the sale of real property.)
Young v. Hefton, Court of Appeals of Kansas, Dec 21, 2007, 38 Kan. App. 2 (Kan. Ct. App. 2007) (applying the U.C.C. 2-328 as “instructive” in real property auctions.)
Hoffman v. Horton, 212 Va. 565, 567, 186 S.E.2d 79 (1972) (applying U.C.C. 2-328 same as to the sale of real property.)
Virtually every time a real estate auction case comes before a judge in a court in the United States, and there is a question regarding the type of auction (with or without reserve), reopening the bid, seller bidding, finality of the word, “Sold!” or other related matter, the UCC 2-328 is applied via one of these above cases.
For auctioneers who sell real estate (real property, rather) at auction, abiding by the rules of the UCC 2-328 is paramount — in direct conflict with the longstanding anecdotal theory held by many auctioneers that the UCC 2-328 only applies to personal property.
Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, Keller Williams Auctions and Goodwill Columbus Car Auction. His Facebook page is: www.facebook.com/mbauctioneer. He serves as Adjunct Faculty at Columbus State Community College and is Executive Director of The Ohio Auction School.
Comments