What recourse (if any) would a former tenant have if he/she feels that the auction company allowed a buyer to significantly underbid / underpay for the contents of a unit based on the visible contents?
As an example, if what was visible consisted of antiques, furniture and furnishings and the buyer bid less than $500 and walked away with tens or even hundreds of thousands of dollars worth of stuff.
Does the auction company have the responsibility to try and obtain a minimum opening bid based on perceived market value?
How can someone under bid? The free market sets the price. That must be all the other bidders thought the unit was worth. I would not sweat it.
Someone can underbid through collusion, especially if there are only a few (or one) bidders. The "market" I was referring to was the resale market for the items they purchased for next to nothing and would make a fortune on when reselling everything.
The potential scenario would be that the auction company takes a low bid, so the storage company gets at least or less than what they're owed in back rent and the buyer purchases low even based solely on what is visible, but makes a huge profit in resale.
Both the storage company and the original owner of the unit's contents suffer as a result.
The question to all is whether this is a plausible / potential scenario. Thank you for your feedback.
In my opinion the auction buyers can bid what they feel is fair, or what they feel like offering. The more bidders the better for all involved. If the tenant is complaining about being low balled then they should have paid thier rent. Also it would be next to impossible to find out what exactly the bidder resold the stuff for.
Bitter1, As a Facility owner, I don't care what the bidder sells HIS belongings for after the sale. I just want to get paid what is due me. If I get more than what is owed to me, the tenant would get the overage. If I get less the balance goes to collection. I am guessing that was you??? Here in PA the law is very clear. If We as a storage facility follow that we are golden. Since 1998 I have heard on more than one occasion "You sold my stuff and I still owe you money? I am going to sue you." I always tell them When you go to your attorney make sure you take a copy of your lease." I never hear from them again. On one occasion the former tenant asked me for a copy. I of course said no, you should have your copy from the day you signed it. They said it was in the storage unit that I sold.
If only a few people show at the sale, we cannot determine if they are working together, nor do I think it would matter. With the REALITY shows this has not happened in years. It looks as though we are doing some type of give away. In fact We are having a Lien sale this Saturday 12-08-12 come on by.
Dak, I have heard people say this befor, that after the lien sale if the tenant still owes you money, have you ever had any luck in collecting this? Our thinking has always been that we do not send you to collections, we just have a lein sale, and after that we write off our loses.
Several years ago we had an iteresting situation occur as the result of an auction.
We had a well attended auction and one unit was sold to a somewhat new bidder.
After winning the unit, he left the door open and proceeded to bid on other units.
At the end of the auction, he paid, but the unit was still open and left.
Before the auction we had announced the procedures for the clean out time (5PM) and that if additional time was needed to see me, the owner.
Anyhow, 3 days later the fellow shows up in his small personal car (obviously, still unable to remove the contents of the 10 x 15 storage unit).
He asks for access to the facility and when we let him in, you guessed it...the unit was empty.
Now it gets interesting.
He wants to know where his stuff is.
I tell him I don't have a clue, but that he doesn't have any kind of storage agreement with me or the facility.
He wants the name of the auctioneer and I provide that.
3 days later, we get a letter from the buyer that states that even though he paid $150 for the unit, it was worth $1500 and he was going to sue both the auctioneer and me, unless we came up with $1500.
Trying to add some legal authentication to the letter, he had his signature notarized!
I've kept that letter for several years.
Obviously, we have no storage contract with the buyer. How the value of a freely bid unit at $150 somehow increased overnight to $1,500. is amazing. And how and why a bidder would expect that leaving a unit open during an auction would somehow obligate others to watch out for his stuff...well, it's amazing.
Both the auctioneer and I had a good laugh.