We’ve spent many an hour in front of the telly watching abandoned storage units full of valuable (or otherwise) goods being bidded on. But how is it that storage companies are allowed to essentially transfer the rights to the contents of a unit to any member of the public who takes a financial interest?
The common way of thinking is that if I buy a TV set, it is my property and if I am to put it into self storage I am still the rightful owner. If I don’t pay my storage fees and the storage company wants rid of me and my items, the TV set is still mine irrespective of it having outstayed its welcome on the storage unit property. Therefore, despite any grievance between me and the storage company, the act of preventing me from picking it up and selling it on is wrong in many ways – right?
Actually not, and this is why storage auctions are able to occur at all. When you enter into contract with a storage company, you are in fact creating a legal entity known as a “lien”. This is essentially a legal right for the storage company to hold the unit contents on the understanding that payments will be met by yourself. It might sound a little severe but in fact liens are commonplace throughout the world of financial deals especially where property is concerned – if you have taken a loan or entered into a mortgage, you are very likely to have encountered one already. The lien clears up any misunderstanding about what happens to defaulting tenants and where all parties stand.
How storage companies deal with the property in the interim period between payment not being met and auction sale can vary, depending on preferred practice and regional laws. This will usually involve the tenant being written to, and communicated with in every possible way, to seek payment or outline the consequences. Advertisement of the sale of the storage unit must be made, although the level of detail can vary from minimal info all the way up to including the name of the tenant and possible storage unit contents.
Of course it can happen that once a unit is advertised for auction, that finally kicks the tenant into action in terms of sorting out a payment or resolution. This may be seen as too little too late, since the storage company has the right to hold the content items as per their lien. However whilst the items will still most likely go on to be auctioned, the tenant and the buyer may be able to settle an agreement where items can be purchased back, and items of strong personal value but no marketplace value (family photos, personal documents etc.) can be returned free of charge.
Posted in: Auctions