How To Protect Yourself From Storage Auction Disputes

February 29, 2012 6
How To Protect Yourself From Storage Auction Disputes

You may have seen the recent New York Times article about self-storage— wow, that’s not a sentence you hear often. It covers the famous high society party-goer Anthony Haden-Guest who, after two years of legal battles with Public Storage over his delinquent unit, held a benefit to roast his recent legal exploits in the self-storage industry. Discussions on the legitimacy of his argument aside, we can all stand to learn a few lessons from his well-publicized dispute.

Know the facts.
Your best bet for implementing and enforcing company policies is to be prepared to defend them. Have a clear, readily accessible company policy that can be easily understood by employees and tenants alike. Furthermore, educate all employees on the legal issues that could potentially arise from a delinquent unit.

In our earlier article about lien laws, we stressed the value of state storage associations providing educational and moral support for facility owners and employees alike. Otherwise, the Self Storage Talk community is a great resource for learning how lien laws are being developed and enforced around the nation.

Be upfront with tenants.
The benefits and necessity of being upfront with your customers is becoming more and more apparent. But the value of transparency doesn’t stop at simply cultivating an air of accountability in your facility team. Wayne Blair, a seasoned storage auctioneer with experience in all the legal ins-and-outs of the lien process, has a few tips for managers covering this delicate subject matter with their tenants.

Blair said to avoid sounding urgent or threatening with your delinquency process. “It’s important to let them know that storage auctions just happen,” he said.

The lien process makes some new residents tentative about their contract, so let them know you’re willing to work with them to ensure both parties get the most out of the self-storage contract. Blair even suggested leaving a Storage Wars poster up in the office as a subtle reminder of the consequences of delinquency.

If delinquency eventually becomes an issue, Blair cautions to remember the human being behind the missed payments. Be open with payment plans, and offer suggestions if they are having trouble finding sufficient funds. For example, Blair said, “Sometimes, churches will end up paying up on the storage unit so people can keep it. These and other agencies are always good to share with your tenants.”

As we are well familiar, lien laws can and do change. Stay up-to-date with your state’s legislative activity, keeping eyes and ears open for any legal changes that influence your facility. If there is a major change that can potentially affect your tenants, include it in your company newsletter, post it on your office bulletin board, and discuss it in person with tenants.

Track them down.
Despite your precautions, delinquency is bound to pop up sooner or later. It is the legal obligation of all facilities to do whatever is in their power to contact the delinquent tenant before putting their unit up for auction. While the parameters of this law can vary by state (for example, the window of time allotted to a delinquent tenant to make good on their rent ranges from 30-90 days), consider the practical incentive for contacting the delinquent tenant: Auctions are a pain, and your singular goal is to ensure all your units are profitable.

If the normal channels, like email and phone, fail to uncover your delinquent tenant, it’s time to get creative. Exploring social networks like Facebook and LinkedIn is becoming an increasingly successful way to reach out to MIA tenants.

Use an auctioneer.
It may not fit within your budget, but if you feel your facility might be vulnerable to delinquency, a professional storage auctioneer is a safe investment. Auctioneers have extensive experience with lien laws and procedures and are wary of the common mistakes that can be made.

Try auto-billing and e-billing.
Encourage tenants to utilize your website’s online and auto-billing capabilities. Not only do these types of billing arrangements save travel time and paper, but the convenience often encourages on-time payments. You may find a well-timed email notifying a tenant of a late payment or delinquency will be returned with a quick payment through the website. Plus, the “lost in the mail” argument is slightly less feasible in the electronic world.

  • Brittany Morris

    This are really great tips, and I enjoy going to storage auctions so much! If you need help finding auctions check out storagetreasures.com it’s the best way to find auctions near you!

  • http://www.rockfordstorage.com/ public self storage Rockford

    Great!! A rental company employee kicks off the auction by choosing one of the units to be auctioned off and opening it to the public, though those in attendance may not go inside. The employee then starts the bidding, asking how much bidders will pay for it.

  • http://www.hampshireselfstorage.com/ Hampshire Storage

    We’ve had great results with letting customers pay via the website. We hate to put a unit to auction but we are a business and after 30-90 days we have to put the unit to auction. We make sure everyone is aware of this if they start to miss payments or pay late.

    • http://thestoragefacilitator.com Rachel Greenfield

      Definitely. Online payments are the smart, modern way to go. Keep it up, and thanks for reading and commenting.

  • http://www.91expressstorage.com/ Self Storage Units

    The suggestions given are practical and very useful in tackling delinquent tenants of the storage units. By doing one’s homework right, one can work out a method to prevent further hassles.

    • http://thestoragefacilitator.com Rachel Greenfield

      Very true. Thanks for reading!