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Thread: Interesting auction incident? What would you do?

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    Jughead is offline Senior Member
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    Default Interesting auction incident? What would you do?

    We had a very interesting incident this week at an auction. A tenant was called and told about the auction. She was also told about how much she owed. The tenant decided to attend the auction to possibly purchase her space for less than she owed us. The tenant was qualified by our auctioneer as a bidder and given a bid card. When her unit came up, she began bidding and bid right up to how much she owed, turned to me and said "I want to pay you what I owe right now!" I turned to the auctioneer who said "Sorry lady, the bidding has begun, your a bidder, if you want the unit you will have to bid along with everyone else." The other bidders at the auction continued to bid. She eventually won the bid, but she finally bid well over $1,000 over and above what she owed us. She is threatening to sue us, the auctioneer, the other bidders, etc.

    My question is: Should we have accepted her offer midstream and allowed her to pay us the outstanding lien amount?

    Never had this happen before, never seen it happen before, never heard of it happening before.

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    Lisa T's Avatar
    Lisa T is offline Senior Member
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    Default Re: Interesting auction incident? What would you do?

    I would have...because I don't think the sale is final til the bidding is over.

    However, don't you return anything to her that is over and above what is owed on the unit? So basically, no matter how high the unit was bid up, if she won it, she only owes you what she owes you. If she owes you $500, and won the unit for $5000, you have to give the other $4500 back to her anyway.

    If you are are deducting the auctioneers cut though, I would think she has a case.

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    JAMiAM's Avatar
    JAMiAM is offline Senior Member
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    Default Re: Interesting auction incident? What would you do?

    Quote Originally Posted by Jughead View Post
    My question is: Should we have accepted her offer midstream and allowed her to pay us the outstanding lien amount?
    This is the wrong question to be asking. You should be asking yourself why the **** you allowed her to participate in the bidding process in the first place.

    Once a customer is at lien, he/she should be allowed on your property for one reason, and one reason only - to pay their past due bill on their unit, prior to it being the subject of a finalized sale. Anything else that you allow, other than that simple and well defined act, only muddies an otherwise clean sale.
    James A Mathews
    Facility Manager
    CBD Indoor Mini Storage

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    Lisa T's Avatar
    Lisa T is offline Senior Member
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    Default Re: Interesting auction incident? What would you do?

    I don't know how it works in California, but in other states, if you have to hold a public sale, then it must be just that ... a public sale...open to all members of the public, including the tenant.

    We have had tenants show up to bid in Florida and Alabama, and the auctioneers said we were required to let them bid, as long as they did not become disruptive and as long as they followed all the rules.

    Everytime that's happened though, the experienced buyers seemed to be able to "sniff out" the fact that a tenant was in their midst, and the bidding went skyhigh.

    We have also had a tenant send a friend over to bid on their unit, which we did not find out until after the sale was complete and the tenant's friend was emptying the unit.

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    Lisa T's Avatar
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    Default Re: Interesting auction incident? What would you do?

    And actually I think the far more important question is "Why would you not accept the tenant's offer and stop the auction?"

    It is always preferable to have the tenant's belongings returned to them, especially if you are getting payment in full. No lawsuits to contend with and you have your money.

    I do think the auctioneer was out of place in his response...he should have remembered that he was working for you and asked you what you wanted to do. Every auctioneer I have used in the past would have done so.

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    JAMiAM's Avatar
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    Default Re: Interesting auction incident? What would you do?

    Quote Originally Posted by Lisa T View Post
    I don't know how it works in California, but in other states, if you have to hold a public sale, then it must be just that ... a public sale...open to all members of the public, including the tenant.
    The fact that an event is "public" does not trump the rights of a facility to restrict attendance based on legitimate reasoning. As a case in point, a customer who has been legally denied the right of access to the facility due to their tenancy being terminated by a perfected lien. Or, auction buyers who have previously caused problems, or disruptive first timers, or...

    Get the point?

    There is no reason that a person who has been denied entry into a facility other than to make good on their debts, should be allowed to have access to the facility in a brazen attempt to reduce that liability. Especially when it runs the risk of creating a lawsuit. Bad management decisions make for lawsuits. Lawsuits have a tendency to bring forth bad (for our industry's benefit) case law that we all have to deal with.

    I'm not trying to make a personal attack here, but Jughead's and his auctioneer's decision was, in my opinion, poorly thought through and the tenant should have been barred from participating in the bidding on her unit, or from even being on the premises unless she was actively paying for the unit in the facility office.
    Last edited by JAMiAM; 11th September 2010 at 02:55 AM.
    James A Mathews
    Facility Manager
    CBD Indoor Mini Storage

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    Lisa T's Avatar
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    Default Re: Interesting auction incident? What would you do?

    I would check with a lawyer for my state before denying a tenant from bidding. I have had 2 professional auctioneers, in 2 states tell me we couldn't deny a tenant unless they were disruptive or not complying with our standard auction rules that all bidders must follow. One of the auctioneers has been doing storage auctions for 20 years and it is their specialty. Storage managers tend to take such things personally, however as I posted previously, you wouldn't know if the tenant sent a friend or family member over to bid on their unit.

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    Autodoc's Avatar
    Autodoc is offline Mod eMeritus
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    Default Re: Interesting auction incident? What would you do?

    We have attempted this previously (allowing a tenant to attend an auction) - it has never ended well. Due to that we have instituted the policy - if a tenant is in Lien they are not allowed on the property.

    Yes, they can send a friend to bid on their behalf, and as long as they follow all the rules and don't cause problems it's fine.

    As for Jughead (and his auctioneer) IMHO - bad decision! This will probably come back to bite you in the butt!

    Once again, this is a case of a manager and auctioneer getting greedy when the goal of an auction should be to empty the unit not line your pockets.

    good luck on this, I hope it works out for you.
    Wayne
    Jamestown, ND


    All arguments can be resolved ... with high explosives and Humor!!!

 

 
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