26. Auctioneer Rules, 1997

The Rules provide for licensing and identification of auctioneers, attachment and sale of properties during auctions and the general conduct of auctions.

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· Part II of the Rules provides for licensing and identification. Rule 3 provides for the application and issuance of a licence to an auctioneer and the issuance of an identification card to auctioneers by the Auctioneers Licensing Board.

· Part III provides for the manner of attachment and sale of property in an auction under warrants of court or under letters of instruction from third parties including distress for rent and repossession unless otherwise provided or ordered by the court. An auctioneer is required to keep a register of warrants and letters of instruction issued to them. Under Rule 10, an auctioneer may apply to court for an order that the property subject of an auction be valued by an independent valuer, at any time prior to the auction. With respect to sale of immovable property, rule 15 requires an auctioneer to record the court warrant or letter of instruction in the register; prepare a notification of sale in the statutory form indicating the value of the property to be sold; locate the property and serve the notification of sale on the registered owner or adult member of the family and where the recipient refuses to sign such notification the auctioneer should sign a certificate to such effect; give in writing to the owner of the property a notice of no less than 45 days within which the owner must redeem the property; upon expiry of the notice period without payment arrange for the sale of the property not earlier than 14 days after the first newspaper advertisement. This means that upon receipt of instructions from a bank or financial institution, an auctioneer takes at least 2 months before they can auction a property.

· The advertisement of auction or sale must contain: the date, time and place of proposed sale; conditions of sale or where the same may be obtained; time for viewing the property to be sold; in case of movable property, an accurate description of the goods to be sold and a statement as to whether or not they are to be sold subject to a reserve price; in case of immovable property all the information required to be contained in the court warrant or letter of instruction except the amount to be recovered and the exact amount of any reserve price. Except otherwise ordered by a court, an advertisement by an auctioneer of a sale by auction of any property, movable or immovable, is by way of an advertisement in a newspaper.

· Part IV of the rules on maintenance of accounts requires auctioneers to maintain a client account into which to pay all clients’ money and maintain proper books of accounts. Part V of the Rules provides for disciplinary mechanisms against a professional auctioneer engaged in misconduct. The Fourth Schedule sets out the auctioneers’ fee schedule. With respect to sale of immovable property (frequently used as collateral for loans in favour of banks/financial institutions), an auctioneer fee of 10% is charged for up to Ksh 600, 000 realized in case of sale; a fee of 5% for sales between Ksh 600, 001 to Ksh 3, 000, 000 and a fee of 2% for any amount above Ksh 3, 000, 000.