What to do when about a wrongful storage auction

Seeking Justice Of Storage Auction Lien Sales

We cannot stress enough that we know thousands of honest and hard working people who own and operate self storage facilities. No one wants to sell your items. The goal of self storage is to rent units, not to sell their customer’s belongings, but as the costs pile up without incoming rent – lien sales happen. BUT, unless a facility owner or operator has exhausted all of their options to resolve the outstanding balance with its tenant, the sale of the tenant’s property should be the last resort. Still, unlawful lien sales, or Storage Auctions, do happen and both sides are preparing themselves for what to do about it.
People across the US are filing lawsuits against self-storage companies which unlawfully seize the contents of their storage lockers and auction them off, often at a huge profit to those companies and without the content owners’ knowledge. Its called “Conversion,” a common law tort, and it is a voluntary act by one person that violates the ownership rights of another. When applied to storage lockers, or self-storage facilities, the act of conversion can include anything from ‘denial of access’ to ‘wrongful auction.’
The right of non-judicial foreclosure and the sale of tenant’s property is a unique attribute of the self storage business and provides a self storage owner or operator with a powerful tool in collecting its rent or recovering its storage space from a delinquent tenant. Yet, the right of repossession also comes with the tremendous responsibility of following the rules for that foreclosure. Although many states have self storage statutes which identify the foreclosure rights of a self storage owner, each statute must be reviewed depending on the state in which the property to be sold is located. All required notices must be sent, and all time periods for demand, notice, publication and sale must be observed. The failure to follow any of those requirements exposes the self storage facility to tremendous liability and explains why there is specific insurance in the self storage industry for “wrongful sales.”

There are many stories involving people who fall behind in their payments due to illness or mitigating circumstances. When they go to make a payment they are either told that their goods have been auctioned off or they are denied access to their lockers but not told that their goods have been auctioned off. The responsibility is primarily on the tenant to make their payments and ensure that their contact information remains current. The best way to avoid a lien sale is to choose a storage facility you trust. Read their reviews, ask them how they would handle a late payment before signing up with them and placing your belongings in their storage unit.

If you or a loved one has suffered similar damages, please fill out our contact form and your complaint will be sent to a lawyer who is familiar with the lien laws in your particular state and who may evaluate your claim at no cost or obligation.

How to Deal With a ‘Wrongful’ Lien Sale

If you believe your belongings were auctioned off wrongfully – you’ll want to move quickly before your things are lost forever. Here are five steps you should start taking now.

1. The first one is obvious, but try to get your things back. Your entire goal is to recover your lost items, so do what you can—quickly—to get them back, even if it means paying a third party for them or jumping in a Dumpster to collect valuable documents. You can worry later about your potential legal claim against the storage facility. If you go to the lien sale, identify yourself to the buyers who are there – do everything you can to mitigate the damages.

2. Documentation is critical, so get as much as you can. You’ll need to have good documentation if you go to court. Most storage facilities don’t issue documents to their tenants for anything once they initially sign up, unless they ask for it. Even then, a storage company may even charge a small fee if you would like an invoice, but its worth the additional cost as an insurance. If for nothing but the peace of mind you’ll have that the facility has your correct contact information.

3. Consult legal advice. If you’re going to file a lawsuit regarding a wrongful lien sale, you’re going to need a qualified attorney who knows the lien laws in your state. If you don’t have a lot of money to spend, make a note of that in your contact form and we will try to find you a lawyer who does plaintiff work on contingency. Regardless, ensure you obtain a lawyer who is familiar with storage auctions and ideally, can provide similar cases they’ve been a part of.

4. Know going in that you’re going to fighting an uphill battle. Contractual documents should always be fair and equitable, but they’re also always written to protect storage facilities and limit their liability in the event of any wrongdoing. The deck is stacked against self-storage tenants in cases of wrongful lien sales and legal representation is scarce. But as more and more of these lawsuits are filed, and precedents are set – justice is being served when a tenant is wrongfully treated.

5. Protect yourself from wrongful lien sales. There are a few things tenants can do to try to ensure they don’t fall through the cracks. Make sure your address is correct when you sign up for storage, and update it when you move. The storage facility should allow you to designate an alternate contact, too, so don’t leave that space blank on your paperwork.

Again, the best advice we have is to do all of your due diligence in choosing a storage unit. Don’t just search the internet for the cheapest price, choose people you believe in, others speak highly of, and someone you trust.

Advice for Self Storage Owners

We wanted to look at this from both sides, so we reached out to a local storage facility in Logan, Utah – East Warehouse Self Storage – to ask them for their advice. They helped us give advice on both sides of the battle – helping tenants best prepare themselves, and for fellow self storage owners to do everything they can to avoid fighting litigation, because whether you’re right or wrong – you’ll still lose money.

The best sale is no sale, but if you have to do it, do it right. Many times, wrongful sale claims stem from very simple admin mistakes rather than intentional acts. Just because your facility’s records indicate non-payment or proper mailing of notices, the actual documents may indicate otherwise. In order to protect a facility from wrongful sale claims, it’s vitally important to have and follow a procedure at the facility that mandates a second person, whether it be a manager or other facility representative, verify and review every line item and part of a tenant’s lease before the property is sold at auction.

Send your notice letters by Certificate of Mailing. Where the Postal Office actually verifies your mailing address on the letter and in the Certificate of Mailing Book, then stamps your book after validating that everything matches their records.

Before the property is sold, you better be sure that you followed all of your state’s statutes and everything was done right. Once you make that sell there’s no turning back the clock to get the tenant’s property. And if you are found of wrongdoing in a court of law, you’re probably going to have an angry tenant on your hands who is probably not going to say that everything has been replaced in their unit. More than likely, they’re probably going to find a few items that are missing that are family heirlooms – antiques or jewelry or other items that will increase the value of the wrongful sale claim against the facility.

It is why it’s important to have a process in place to review the documents and be certain that you’re in the clear before approving the sale. Hopefully you’ll catch any errors in the paperwork and other missteps that could come back to bite you. It may take additional time to perform this double-checking routine but it will save the facility in the long run.

The conservative approach to lien sales is that if there are any questions relating to compliance with the statutory procedures, go over it again. If there are any questions as to whether it’s been done right, do it again. By recognizing the risks of foreclosing on tenant’s property, a facility owner or operator should be more inclined to resolve delinquencies as conservatively as possible. The industry has witnessed an increase in tenant claims for wrongful sales over the past few years and based upon the risks involved, any sale of a tenant’s property should be handled cautiously and carefully.

We would like that thank East Warehouse Self Storage for their contribution and guidance in the efforts of this article to provide assistance to those who need it, and guidance to all on how to avoid these unfortunate storage auctions.

 

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