Below is part of my thesis I wrote for the ASEL (American Society of Estate Liquidators). Companies looking to obtain the title of Accredited Estate Liquidator must submit their thesis to the board of directors. Only 2 companies in Michigan hold this title.
Regulation is not a new concept for American business. The United States government and local state entities have been pressing regulations on business for hundreds of years. This can be a good thing, and also a burden for business to bear. Although many businesses believe the amount of regulations that they have to follow is overwhelming, a vast majority of them would agree that it is overall helpful to their said industry. One of the industries that have slipped through the regulation cracks is estate liquidation. The government barely recognizes estate liquidators as business, let alone have any regulations or standards for them to follow. This lack of recognition and regulation has really hurt the industry as a whole, and has grouped unethical and ethical business into the same group. Although there are many regulations that need to be in place for the estate liquidation industry, the main areas are in business formation, general business practices, and customer/client satisfaction reporting.
Unlike many other industries, it doesn’t take much to become an estate liquidator. In fact, it literally takes nothing to manage an estate sale. Any person can start at anytime with no experience, expertise, or general knowledge. This is unbelievably scary because a liquidator has their client’s assets in their hand. They could potentially cost their client tens of thousands of dollars. Today, there are many estate liquidation “companies” who manage sales daily, and do not even have an LLC, or are bonded, insured, and keep accurate accounting for their clients. The government needs to step up and start holding these people accountable. Today, there are no entry restraints that will hinder someone from becoming an estate liquidator. This has to be changed if the government wants to protect its people. If there was a regulator agency in effect that can help weed out people, the industry would be more respected and potential clients of ethical companies would not need to worry if a company was going to steal or lie to them.
The major reason why regulation of this kind needs to be placed into the liquidation industry is because the shear volume of people going into this business daily. For every 1 legitimate business out there, there are 5 that the state doesn’t know about. With the entry regulation and restrictions, the government will know about each business, monitor the actions of these companies, and thus building up the credibility of ethical estate liquidators who’s passion are to give outstanding customer service.
Along with adding entry barriers, the government needs to add regulation to general business practices. As of today, there is no regulation when it comes to estate liquidation. Any person can run their business any way he or she wants, with zero to little repercussions for said actions.
The best way for the government to place business regulations on estate liquidators is by creating a general list of rules each company must abide by. There also can be an agency in change of making sure companies follow said regulations.
Lastly, and quote importantly, the government needs to have an agency set up to take customer and client complaints for unethical behavior. Today, there is not a place where this can happen. There are many times where someone will say to a staff member “I went into another company’s sale and they are doing….who can I tell this to?” The correct answer is no one. These “companies” are not listed anywhere, and are unable to be found anywhere online. Essentially, they are ghosts and without proper regulation problems will go will unseen and unchanged.
Regulation in any industry is very important. It sets rules and standards for all to follow. Without this semblance of order to follow, business and their clients will suffer. As it sits today, there is zero regulation in the estate liquidation, and the industry, as a whole, is suffering for it. The estate liquidation industry is in need of some fashion of regulation. Clients, business, and customers will be much better off, and will lead to a completely new estate liquidation industry.
ASEL Thesis by Justin Coughlin
Author: Justin Coughlin