Self storage facility operators don’t get into the business to sell their tenants’ belongings in storage unit auctions. You want to help your tenants and provide a clean and safe place for their valuables. But what happens when your tenants are delinquent on their payments and abandon their possessions? It’s not your goal for your tenants to lose their property, but what can you do in this unfortunate situation?
First, we need to look at why tenants abandon their storage units. There are many reasons why someone might leave their possessions behind. They may have moved, fallen on hard times that left them homeless or incarnated, or they may have passed away. If a business rented the unit, it might have unexpectedly closed. All of these possibilities can leave storage managers feeling many mixed emotions, and unfortunately, you may not ever find out the tenant’s story.
The storage operator needs to regain that abandoned unit so it can be rented again and recover rental fee losses. The operator does not want to sell the items, but there is no other choice when the tenant decides to quit paying or disappear altogether. While it may feel unpleasant, the facility will need to start the storage auction process.
The first thing a storage facility must do is attempt to contact the tenant. Contact may prove harder than expected, but every effort must be made. The tenant is notified based on the state laws, which vary state by state. They should receive several notices by mail, phone calls, emails, and text messages. The storage operator will even contact the alternate person on file to try to reach the tenant.
After all possible ways of communication are exhausted and the tenant doesn’t respond or resolve the delinquent account, the operator can place a lien on the unit. In most cases, a lien can legally be placed on a storage unit as little as 30 days after a missed payment. It is crucial to know and follow proper lien sales rules at this point in the process. Be sure to thoroughly read up on your state’s storage statutes, as they may differ by state. Inside Self Storage provides excellent details about protecting yourself by establishing your auction rules.
Both on-site and online storage unit auctions have pros and cons, so it’s worth figuring out which venue is best for you. On-site storage auctions can have a high turn-out for the people who like the face-to-face interaction and physically see the unit they are bidding on. But a buyer may only attend a select few auctions because of travel, time, and expenses. Having a large crowd on your property is also a liability and disruption of normal business operations. But in-person auctions are done and paid faster.
Online auctions are a growing trend and offer buyers the efficiency and convenience of a few clicks from the comfort of their home or even on the go. Storage operators benefit as well from online auctions by reaching a broader range of buyers, potentially driving the bids up while also negating the need to manage the logistics of hosting a large crowd at your facility. A longer bid time means more people can bid, and bids may get higher, but the sale and payment process takes a little longer.
If you choose to go the traditional in-person route, you can hire the services of an auctioneer. Some of them even come with their own following of bidders. If you decide to move into the tech-savvy world of online auctions, you can find many websites that offer great platforms to help you sell.
Unlike many types of auctions, items within a storage unit are not auctioned separately, but the unit is sold as a whole package. As a result, bidders don’t get to see all the items in the unit. They can look inside the open unit door or see that view in the photos posted on the online auction site, but they don’t get to open boxes and containers to see what’s inside. The winning bidder has a defined period to pay and remove the contents of the storage unit. The sale is kept open until payment is finalized.
Auctioning abandoned storage units is a necessary part of running a self storage business. By dotting your i’s and crossing your T’s, you can feel confident that you’re moving forward with storage unit auctions in a legal, responsible manner. Knowing every aspect of the process prepares you for smooth and successful sales. Most importantly, you’ll be able to keep your self storage units actively rented and avoid losses.
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