Chapter 5.20
CLOSING-OUT SALES*
Sections:
5.20.020 Permit Applications and Requirements.
5.20.030 Permit Approvals and Conditions.
* For statutory provisions exempting closing-out sales from certain otherwise unfair trade practices, see Business and Professions Code § 17050.
5.20.010 Permit Required.
All closing-out sales require a permit issued by the City consistent with this chapter. Until such permit is issued, it is unlawful for any person, firm or corporation to sell, offer for sale or expose for sale any stock of merchandise where any such person, firm or corporation represents to the public that they are engaged in closing out the owner’s business. (Ord. 2005-02 § 1 (Exh. A), 2005; Ord. 88-2 § 3 (Exh. C), 1988).
5.20.020 Permit Applications and Requirements.
A. The City Administrator or her/his designated agent shall issue permits authorizing closing-out sales only when the following requirements are met:
1. The proposed activity will be a bona fide sale of a stock of merchandise where the owner thereof or the creditors of the owner are engaged in a legitimate and final closing-out of the business;
2. Such sale is on the premises where the business has been carried on for not less than one year immediately preceding such sale. If the business has occupied the current business premises for less than one year, the permit may still be issued if the business has continuously conducted the same business at multiple locations within the City for a period of not less than one year immediately preceding the sale; and
3. No stock of merchandise will be offered for sale or sold at the closing-out sale that has not been part of the existing stock.
B. A complete application shall include any fees established by resolution of the City Council and a cover letter identifying the business, the owner and describing the reason for the sale, its location and duration. Applications shall also include a written statement from the business owner, signed under penalty of perjury, that:
1. The inventory to be sold has been located on the premises for not less than 60 days immediately preceding the filing of the application;
2. That no additional stock will be added to the business during the sale and that there will be no deliveries ordered nor accepted by the business for the purpose of adding to the inventory, replenishing stock or for any other purposes;
3. That the proposed sale is a bona fide closing out of the business; and
4. Should the sale be found to violate any of the minimum conditions established in CMC 5.20.030, the owner agrees to terminate the sale and to cease and remove all public representations of the sale consistent with CMC 5.20.030(A)(4). (Ord. 2005-02 § 1 (Exh. A), 2005; Ord. 88-2 § 3 (Exh. C), 1988).
5.20.030 Permit Approvals and Conditions.
A. Permits approved by the City Administrator or his/her designee shall be subject to the following minimum conditions. Additional conditions may be established as determined to be appropriate to the specific circumstances:
1. No off-premises signs shall be installed, displayed or otherwise established. All signage shall be maintained within the business interior and shall comply with sign standards established in CMC Title 17.
2. The sale authorized by the permit granted under this chapter shall not commence until the permit has been approved and written notification has been transmitted to the business owner.
3. No delivery of additional merchandise or inventory to the business location shall take place during the sale.
4. Violation of any condition of approval shall constitute grounds for immediate revocation of the permit by the City Administrator. If such action is taken, the closing-out sale shall be terminated and all signs, advertising and other representations conveying to the public that the business is conducting a closing-out sale shall immediately cease and/or be removed from public view.
B. The City Administrator or her/his designated agent may designate the number of days that the closing-out sale may be conducted but in no case shall the sale be advertised and/or represented as a closing-out sale for a period longer than 30 calendar days at any time.
C. Any applicant may appeal the decision of the City Administrator or her/his designated agent to the City Council. (Ord. 2005-02 § 1 (Exh. A), 2005; Ord. 88-2 § 3 (Exh. C), 1988).
5.20.040 Exemptions.
A. Sale of Stock in Bulk to Single Purchaser. The provisions of CMC 5.20.010 through 5.20.030 shall not apply to the sale of a stock of merchandise in bulk by an assignee or trustee acting under a bona fide assignment for the benefit of creditors. For the purposes of this section, a sale “in bulk” means a sale of all or a substantial part of stock or merchandise to a single purchaser.
B. Exempted Persons. The provisions of CMC 5.20.010 through 5.20.030 shall not apply to:
1. Persons acting pursuant to an order or process of a court of competent jurisdiction.
2. Any publisher of a newspaper, magazine or other publication who publishes any advertisement in good faith, without knowledge of its false, deceptive or misleading character, or without knowledge that the provisions of this chapter have not been complied with. (Ord. 2005-02 § 1 (Exh. A), 2005; Ord. 88-2 § 3 (Exh. C), 1988).
5.20.050 Definitions.
A. “Closing-out sale,” as used in this chapter, means:
1. Any sale of, or any offer to sell to the public or any group thereof, wares or merchandise in connection with a declared purpose as set forth by advertising of any kind that such sale is anticipatory to the termination, liquidation, discontinuance, removal, dissolution or abandonment of the business or that portion of the business conducted at any specific location; and/or
2. All sales advertised in a manner calculated to indicate that the goods, wares or merchandise to be sold, or any part thereof, have been involved in any business failure or have been derived from a business which has failed, been closed, discontinued or liquidated; and/or
3. All sales accompanied by notices or advertising indicating that the premises are available for purchase or lease or are otherwise to be vacated; and/or
4. All sales accompanied by advertising indicating business emergency or failure affecting the seller or any previous holder of the goods to be disposed of.
B. “Represent to the public,” as used in this chapter, means any advertisement by print, radio, television, Internet or by any signage or other form of printed, written, oral or electronic communication directed to patrons or prospective patrons or to the general public and which conveys, implies, states or communicates the nature of, reason for, or purpose of the sale. (Ord. 2005-02 § 1 (Exh. A), 2005).