The voluntary sale of furniture by public auction is a procedure that allows an owner to sell his or her property to the highest bidder, without any legal constraints. This procedure, which is governed by a specific legal framework, offers a structured alternative to private treaty sales, but is radically different from forced sales, which are part of enforcement procedures. This article provides an overview of this mechanism, from its legal foundations to its practical effects, by skimming over the various aspects that will be explored in greater detail in more detailed guides. Whether you are a private individual wishing to sell a work of art or a company director liquidating equipment, understanding this framework is essential. Our firm offers you its expertise in enforcement and sales procedures to support you.
Definition and distinction: voluntary sales vs. forced sales
To understand the rules governing public auctions, it is essential to distinguish between those that are the result of a choice and those that are imposed by a court decision. This difference in nature conditions all the applicable rules and the rights of the parties involved.
Legal definition of voluntary sales of furniture by public auction
A sale is said to be "voluntary" when the owner of a movable asset decides of his own accord to offer it for sale by public auction. This approach is based exclusively on the consent of the seller, who mandates a professional to organise competition between potential buyers. The aim is to obtain the best possible price through competition between bidders, with the item going to the highest bidder.
Distinction from forced (judicial) sales
In contrast, a forced sale (or judicial sale) does not depend on the owner's will. It takes place within the restrictive framework of the civil enforcement proceduresThe property is seized and then sold so that the creditor can be paid from the proceeds. The property is then seized and sold so that the creditor can be paid from the proceeds. Another major difference lies in the possession of an enforceable titleThis is a sine qua non condition for a forced sale, but is totally absent from a voluntary sale, which is based solely on the owner's consent and act of will.
Voluntary judicial sales: a delicate boundary
There are hybrid situations that can lead to confusion. A sale can be described as "voluntary judicial" when it is authorised by a judge but is not a compulsory execution measure. This is the case, for example, in the context of a succession or the management of the property of an incapable person. Although the seller consents, judicial intervention means that the sale falls into the category of judicial sales, thus subjecting the transaction to specific rules that are different from those for purely voluntary sales.
Legal framework and developments in voluntary sales: laws of 2000 and 2011
The voluntary sales market was radically modernised at the beginning of the 21st century, moving from a monopolistic system to an open and competitive market, under the impetus of European Union law. This liberalisation has redefined the landscape of the profession.
The law of 10 July 2000: modernising and opening up the market
The law of 10 July 2000 marked a break with the past by abolishing the auctioneers' monopoly on voluntary sales. By creating the status of voluntary sales operator (OVV), accessible to commercial companies, the law opened up the market to new players and sought to strengthen the competitiveness of the French art market against its international competitors in France.
The Act of 20 July 2011: liberalisation and European harmonisation
Following on from the first reform, the Act of 20 July 2011 amended and supplemented this framework by transposing the European Services Directive. It simplified the conditions for admission to the profession of sales operator, replacing the system of prior authorisation with a simple declaration system. This law completed the liberalisation of the sector by harmonising French practices with the standards of the European Economic Area.
Scope: new or used furniture by nature
The system of voluntary sales, as defined in this chapter of the French Commercial Code, applies exclusively to "movables by nature", i.e. goods that can be moved, which excludes intangible goods. Initially reserved for second-hand goods, successive laws have extended the scope of application to new goods, whether sold retail, wholesale or in lots.
The key players in voluntary sales: operators, the Conseil des ventes and experts
The liberalisation of the market has been accompanied by the establishment of an ecosystem of players with clearly defined roles, ensuring both the dynamism and the security of transactions.
Voluntary sales operators: status, entry requirements and obligations
Voluntary sales operators (VSOs) are the main players on the market. They may be individuals or companies. In order to operate, they must register with the regulatory authority and provide proof of financial guarantees, professional liability insurance and the presence of at least one member of staff authorised to conduct sales. This authorisation is often the result of demanding professional training, including an internship and a final aptitude test. Acting as the seller's agents, they are responsible for ensuring that the sale of each item entrusted to them is carried out correctly.
The Conseil des maisons de vente (formerly the Conseil des ventes volontaires): role and missions after the 2022 and 2023 decrees
Created by the law of 2000 under the name of Conseil des ventes volontaires (CVV), the Conseil des maisons de vente is the sector's regulatory authority. It registers operators' declarations of activity, approves experts and exercises disciplinary powers. Its remit includes monitoring the auction economy, in particular through an annual report, and promoting best practice through the publication on its website of a compendium of the profession's ethical obligations, subject to approval by the Minister of Justice. Its chairman is appointed from among its members, and a government commissioner liaises with the government.
The ancillary role of notaries and bailiffs
Notaries and judicial commissioners (the successors to judicial officers) may organise voluntary sales, but only on an ancillary basis and in municipalities where no judicial auctioneer's office has been established. This activity, which makes them a public official, is subject to specific training and internship conditions and is carried out within the framework of the rules specific to their office. Although their involvement here is incidental, it is useful to be aware of all the rules that apply to them. powers of the commissioner of justiceparticularly in its principal role in enforcement.
Approved and non-approved experts: status and responsibilities
Auctioneers may call on experts to estimate the value of the goods entrusted to them and to describe them, thereby incurring liability in the event of error or forgery. There are two categories of experts: those approved by the Conseil des Maisons de Vente, who are registered on an official list, and those who are not. Whatever their category, all experts involved in a sale are required to take out professional liability insurance and are jointly and severally liable with the sale organiser.
Organisation and conduct of auctions: advertising and electronic auctions
An auction is a formalised process that must guarantee transparency, equal access for buyers and free price formation, often in an auction house.
Conditions for public auctions: presence of auctions and public access
A sale is only "public" if all interested parties have free and unrestricted access to it in order to bid. The auction, i.e. the awarding of the item, must go to the "highest bidder", i.e. the person who makes the highest bid and becomes the last bidder. This process of open competition is the very definition of a public auction.
Sales advertising and compulsory information
Operators are free to choose their advertising media (sale catalogues, press, internet). However, all advertising must include compulsory information, such as the name of the operator, the date and location of the exhibition and sale, and the name of the authorised person in charge of the sale. If an expert is involved, his presence must also be mentioned.
Electronic auctions: operation and legal framework
The law has formalised the practice of remote auctions by electronic means. These constitute a public auction in their own right, conducted and subject to the same rules as indoor sales. The French Commercial Code carefully distinguishes them from simple online brokerage transactions, where there is no auction to the highest bidder and the service provider is not involved in concluding the sale.
Legal effects of the sale: transfer of ownership, obligations and liabilities
The adjudication that closes the sale produces immediate legal effects and creates reciprocal obligations between the seller, the buyer and the professionals involved.
Transfer of ownership and the seller's obligations
The "blow of the hammer" by the person running the sale formalises the auction and instantly transfers ownership of the property to the successful bidder, recorded in a report. The seller's main obligation is to deliver the item, which is done by the auction operator. Unlike judicial sales, the seller remains liable for hidden defects.
Obligations of the successful bidder: payment and removal of the property
The main obligation of the successful bidder is to pay the price "in cash" to the operator, plus the selling costs. They must then take possession of the property. In the event of non-payment, after formal notice has been served, the item may be reoffered for sale at a new auction, known as an "folle enchère", especially if it has not reached the reserve price. The defaulting buyer is obliged to pay the difference between his price and the new hammer price. In the event of difficulties, it may be necessary to refer the matter to the Enforcement Judgewhich retains jurisdiction over any disputes relating to the auction.
Liability and remedies in the event of default
The auction operator is responsible to the seller and the buyer for the correct delivery of the goods and the representation of the price. He is also, together with the expert, responsible for the information provided on the characteristics of the item, in particular its authenticity. Any clause intended to limit this responsibility is deemed unwritten. Once the sale price has been paid, the cash distribution procedure can be used to distribute the funds.
Sale of pledged movable property: procedures and reforms for 2021
The sale of pledged assets is a complex situation governed by the securities law. Since a 2021 reform, when the pledge secures a business debt, the unpaid creditor can use a simplified public sale procedure. After simply notifying the debtor, the creditor can proceed with the sale of the property by a notary, a court commissioner or a sworn goods broker, without first having to obtain a writ of execution, which considerably speeds up the realisation of its security.
Impact on the legal status of specific movable assets: fungible, fixed assets by destination
The system of voluntary sales is adapted to the nature of the goods. In the case of fungible (interchangeable, such as raw materials) goods, the pledgor may be authorised to dispose of them, provided that they are replaced by goods of the same quantity and quality. The 2021 reform clarified the fate of movable assets that are fixed by destination (such as industrial equipment attached to a building) in the event of an auction sale, by providing for the mortgagee of the building to be informed and to intervene, thereby ensuring that rights in the asset sold are purged.
Navigating the legal framework of voluntary sales, whether as seller, buyer or creditor, requires a detailed understanding of the rules and the balance of power involved. If you are faced with a question relating to an auction or the realisation of guarantees, do not hesitate to contact our law firm for a tailor-made study and a strategy adapted to your situation.
Frequently asked questions
What is a voluntary sale of furniture by public auction?
This is a procedure whereby an owner freely decides to sell an item of personal property by offering it to the highest bidder in a public competition organised by an authorised professional.
What is the main difference between a voluntary sale and a forced sale?
A voluntary sale is initiated by the consent of the owner of the property. A forced (or judicial) sale is a coercive enforcement measure, ordered by the courts at the request of a creditor to recover a debt, and which requires a writ of execution.
Who can organise a voluntary auction?
These are mainly voluntary sales operators (OVV), which are specialised commercial companies. On a secondary basis, notaries and auctioneers may also organise auctions, subject to certain geographical and training conditions.
What happens if the buyer does not pay for the property?
In the event of non-payment, the property may be put up for sale again under a procedure known as "folle enchère" or "réitération des enchères". The defaulting buyer is required to pay the difference if the new sale price is lower than theirs, in addition to any costs incurred.
Is it possible to sell a pledged asset at auction?
Yes, a pledged asset can be sold. Security law governs the pledgee's rights over the sale price. Since 2021, if the pledge secures a business debt, the creditor benefits from a simplified and rapid public sale procedure.
What is the role of the Conseil des maisons de vente?
It is the regulatory authority for the voluntary sales sector. It registers operators, approves experts, lays down ethical rules and exercises disciplinary powers to guarantee the security and transparency of the market.
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