Understanding the Self-Storage Lien Process

Guest Contributor
August 8, 2013
Find Self-Storage

Updated December 9, 2022

That self-storage rent seemed so affordable when you signed the lease. But now, past-due notices are stacking up, and the storage facility is threatening to auction off your belongings.

Can a self-storage business really sell your stuff when you fall behind on rent? Yes, it can. And unless you take action, it will.

Before you move into a storage unit, it is important that you have an understanding of storage unit auction laws in your state. This knowledge will help you avoid the unpleasant situation of having your personal property auctioned off. State law outlines the timeline and process that every storage company has to follow when executing a lien on your stored property. This information should also be outlined in the rental agreement you sign when leasing a self-storage unit.

What Exactly is a Self-Storage Lien?

From the day you move your belongings into self-storage and sign the lease, a lien is in place against those items, according to Scott Zucker, an Atlanta attorney who specializes in self-storage matters. That lien lets the storage company sell your unit’s contents to recoup what it’s owed if you don’t pay the rent. 

The facility can’t hold an auction right away, though. They must provide proper notice first. Every state has different self-storage lien laws in place but most follow a similar timeline.

 

1. Default

If you do not pay your self-storage rent in full and on time by the due date, you risk going into default.

Your lease defines the point of default, which typically is between 5 and 30 days after rent is due. When you default, a self-storage operator can deny access to your storage unit.

“After five days, the gate automatically locks out, so we make phone calls at that point,” said Jennifer Bloomer, manager of National Storage Centers in Southfield, MI.

You can regain access by paying the past-due amount, including any late fees that you have incurred.

2. Notification

Once you are in default, the storage company is required to issue an official notification. This letter is to inform you that the storage owner intends to auction off your belongings. The notification should include the total past-due amount, any additional fees and the scheduled auction date.

State law varies widely on the rules that storage operators must follow when sending notices. Most states allow notifications to be sent by email, while a few still require notification by certified mail.

In any case, it is extremely important that you make sure you provide the storage facility with your correct email address, street address and phone number. Make sure to update this information if it ever changes to avoid missing a notice in case you accidentally default.

3. Public Notice

In addition to sending a notification to the tenant that a lien sale will be taking place, storage companies are also required to provide public notice.

Most laws require public notice to be “conspicuous.” Some states require notices to be published in a local newspaper, while others permit operators to post notices online instead. These advertisements typically will include your name, a description of the unit contents and the date of the auction.

4. Lien Sale (aka Auction Time)

The time span between default and the time your personal property is auctioned varies by state, ranging from 30 to 90 days. You can always pay what you owe until the day of auction to stop the sale, however once the auction is over, you can’t get sold items back.

At auction, the top bidder is awarded the contents of your self-storage unit. In some cases, storage unit buyers will relinquish personal items such as photos or documents.

Sale proceeds go toward your storage debt, and self-storage businesses usually notify tenants of any leftover money. The tenant then can claim that money within a specified time, ranging from months to years. Unclaimed proceeds generally are turned over to a state or county agency.

How Can I Stop or Delay the Lien Process?

  • Pay Up. The best approach is to pay the past-due amount to stop a sale and be prepared to move out immediately to avoid continuing charges, Zucker said.
  • Communicate. Don’t ignore letters and phone calls and then call the day of the auction to negotiate. “At that point, our hands are tied,” Bloomer said. “If people communicate with us, there is more we can do to help.”
  • Be an informed consumer. Some states let tenants oppose a lien sale in small claims court. This won’t stop the sale but can delay the process for a month or two. Be sure to check out your state’s lien laws.
  • File for bankruptcy. This will postpone the auction, but the bankruptcy court still will sell your items eventually.
  • Know the law. If a self-storage operator does not follow the rules pertaining to notification and advertisement to the letter of the law, then you may have cause to delay the sale or seek damages. Consult a law firm to review your options.

‘Remedy of Last Resort’

The auction is a self-storage owner’s “remedy of last resort,” Zucker said. The lien itself won’t be reported to a credit agency, but any deficiency will. “If the tenant owed $500, and the sale recoups $200, the $300 balance is generally reported to credit reporting agencies as an unpaid debt,” he said.

Everything a tenant needs to know about the lien and auction timeline is in your lease, Bloomer said. “We make sure we’re very explicit when going over the rental agreement,” she said.

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About the SpareFoot Blog

The SpareFoot Blog offers tips about self-storage, information about storage auctions, advice about home organization, news about SpareFoot and much more.
Contact the editor: [email protected]




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