Understanding Chattels & Moveable Asset Auctions
An 'everything but house auction' is the perfect solution for liquidating personal property, business inventory, vehicles, and machinery. In professional terms, this is known as a 'chattels auction' or a 'moveable assets auction'. Whether you're a business closing down, a creditor executing a court order, or an individual downsizing, this type of auction offers a quick and effective way to convert goods into cash. Unlike real estate auctions, the process is faster and governed by different legal considerations. Swipe Recoveries Experts Ltd is a leader in conducting these specialized auctions. From our base in Nairobi, we handle the entire process, including inventory management, valuation, marketing, and the final sale, ensuring maximum returns for our clients with unmatched dedication and professionalism.
Legal Basis for Chattels (Moveable Asset) Auctions
The legal authority to conduct an 'everything but house auction' primarily stems from the Auctioneers Act (Cap 526) and its rules, which empower licensed auctioneers to sell moveable goods by public auction. These auctions commonly arise from several scenarios. The most frequent is the execution of court orders, where a court issues a warrant of attachment and sale to recover a judgment debt. Another common trigger is 'distress for rent', a legal remedy allowing a landlord to seize a tenant's goods for non-payment of rent, governed by the Distress for Rent Act (Cap 293).
Furthermore, the Moveable Property Security Rights Act, 2017, provides a modern framework for creditors to enforce security rights over assets like vehicles, equipment, and inventory. This act has streamlined the process for lenders to recover defaulted loans by taking possession of and selling the secured moveable assets. In every case, the auctioneer must follow strict procedures, including proper proclamation (notification to the debtor) and public advertisement before the sale can proceed. At Swipe Recoveries, we ensure every auction is underpinned by the correct legal authority, protecting both the creditor/seller and the buyer from future legal challenges.
The Chattels Auction Process: From Inventory to Sale
The process for an auction of moveable goods is distinct from a property auction and is designed for speed and efficiency.
1. Instruction & Seizure/Collection: The process begins when a client (e.g., a bank, landlord, or court bailiff) instructs the auctioneer. The auctioneer then, under legal authority, takes possession of the goods. This can involve seizing assets from a debtor's premises or collecting items from a willing seller.
2. Inventory & Valuation: A detailed inventory of all items is created. Each item, from office furniture and electronics to heavy machinery and motor vehicles, is catalogued and given an estimated value. This valuation helps in setting realistic expectations and a marketing strategy.
3. Advertisement: As per the Auctioneers Rules, the auction must be advertised in a newspaper of wide circulation. The advertisement lists the key items for sale, the location (which could be at the debtor's premises or the auctioneer's yard), and the date and time of the auction.
4. Viewing & Auction Day: A viewing period is typically allowed before the auction, where potential buyers can inspect the goods. On auction day, items are sold to the highest bidder. For vehicles, the auctioneer will announce details like the year of manufacture and transferability of the logbook. Payment is usually immediate, and goods must be collected by the buyer within a short timeframe.
Auction Fees, Costs, and Practical Tips (KES)
The costs associated with a chattels auction are primarily borne by the proceeds of the sale. The auctioneer's commission on moveable goods is set by the Auctioneers Rules and is generally higher than for real estate due to the increased labor involved. The commission is typically 10% on the first KES 100,000, 5% on the next KES 900,000, and scales down thereafter. Other costs that may be deducted from the sale proceeds include:
- Advertising Costs: Newspaper ads can range from KES 15,000 to KES 60,000.
- Storage & Security: If goods are moved to the auctioneer's yard, storage fees apply.
- Transportation: The cost of moving the goods to a secure location.
For buyers, the winning bid price is the main cost. It's crucial to note if Value Added Tax (VAT) is applicable, which the auctioneer will clarify. A buyer's premium may sometimes be charged. For high-value items like vehicles, ensure you factor in potential costs for transfer of ownership with the NTSA and any necessary repairs. Always inspect goods thoroughly during the viewing period, as they are typically sold 'as-is, where-is'.
