Thread: Default Tenant Who Wants to Show up at His Own Auction

We have a tenant who has defaulted from day one and his balance is about $800. It is clear that he intends to show up or send someone to his own auction so he can buy his belongings for less than what he owes on his unit. This does not seem right and I am wondering if he is entitled to do this regardless or if there is some rule prohibiting this which I should present to him.

In California, they are allowed to bid on their own units. But, I am also allowed to let my auctioneer know they are there and he lets the other bidders know this too. Most of the time, the tenant ends up paying at least what he owes or more!! (Love my regulars!!)

Let your auctioneer know. Most auctioneers will ignore them for their unit or bid up the unit for you.

I think here in ohio, I would have to check to make sure, but I think the owner or his reps are able to bid on and buy units. For a situation like this I could buy the unit or bid it up too $800 and then we would get our money.

Originally Posted by MZC&D

I think here in ohio, I would have to check to make sure, but I think the owner or his reps are able to bid on and buy units. For a situation like this I could buy the unit or bid it up too $800 and then we would get our money.

That is what I would do.

or just tip off a couple of bidders that the tenant may be showing up for the auction...they will immediately think there is something valuable in the unit and will bid it up for you.

In my state they still owe the balance if the sale does not satisfy the debt. Let him know the balance is sent to collections and is reported to all 3 major credit bureaus.

When that has happened here, the owner or someone we know will bid the unit up to the amount past due.

In Texas they are allowed to bid on their own unit. It does not mater to me as they still have to have the unit cleared out by the specified time, or it reverts to the ownership of the facility.

Even if a tenant is in default, Our state statue specified "Public Sale". It must be open to members of the public even we did/do not want them there. If they want to signup and bid, that OK with me.
Several things we do to overcome some of the tenant deficiency issue:
1) Require a registration form completed along with photo ID before they can bid.
2) A "CASH" registration depots paid up front.
3) Part of our legal notice specifies: Purchases must be paid at the time of purchase in cash only. All purchased items are sold, as is, where is, and must be removed day of sale. The seller reserves the right to reject bids less than the lien amount .

We have some flexibility, how we deal is our choise. Usually we would cut a deal with the tenant just to keep from selling their stuff; however, if they want to play games, we’ll play. For some reason the problem units usually sell for maximum $$$ along with all the sale costs and fees. Figure that one out! We did have one tenant removed by the local PD because of problems he was creating with the sale.