Lawmaker seeks to regulate New Mexico’s auction houses
A proposed bill would make public sales in the state more transparent
By Julia Halperin. Web only
Published online: 19 February 2014
A bill introduced in New Mexico seeks to increase government oversight of auction houses in the state. The law would require businesses to disclose the reserve, or minimum acceptable price, on all works of art in a sale; reveal whether the auction house has a financial stake in any of the works it offers; and allow potential buyers to inspect works before a sale begins. The bill would also empower the state’s attorney to enforce the new regulations.
The bill’s sponsor, the state senator Tim Keller, has said he was driven to advocate for increased oversight of auction houses after receiving a spate of complains from gallery owners and private collectors. The auctioneers’ lack of transparency, they said, was distorting prices and hurting consumers. The art trade in Santa Fe, New Mexico’s capital, is worth an estimated $200m annually, according to the Santa Fe New Mexican.
“This is essentially an unregulated area in our economy that is very high-dollar in places like New York and Santa Fe,” Keller told the New Mexican. “Because there’s no statute, there’s no basis for a complaint. Unless these transactions constitute egregious fraud that would be covered under federal contract law, there’s nowhere for people to complain to.”
Some elements of the bill would serve to bring New Mexico’s auction houses in line with those in New York. There, auction houses, which trade billions of dollars’ worth of art each year, are already required to disclose whether they have a financial stake in a particular lot. But they do not need to specify the exact reserve on works for sale (though they are required to disclose whether a reserve exists).
Recent efforts to further regulate auction houses in New York State have been unsuccessful. The former lawmaker Richard Brodsky introduced a bill every year from 1998 to 2008 to ban chandelier bidding (the practice of an auctioneer shouting out a fictional bid during a live sale) and empower the state’s attorney general to enforce new regulations. The bill never passed.
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