Hello everyone. I'm brand new to the message boards, so if this question has already been discussed, I apologize.

I have a couple of tenants who avoided lien sale by making a lump sum payment right before the auction and signing payment plans for the remaining balances. They have both defaulted on those plans. In fact, in each case, they apparently had no intention of following through. I suspected that at the time, but figured that a lump sum payment was better than the pittance I would have gotten from the sale.

What I would like to know is, since they have already been through the lien process my state requires, can I now simply set an arbitrary date and auction their goods? Or do I have to put them back through the whole lien process again? I can't find any reference to this situation in my state's lien laws. I sure would like to avoid the whole 60 day process again if I can do so without substantial risk. The payment plan stated that ifthey defaulted their good would be sold for costs but doesn't mention going through the whole process again.

Lien laws can vary by state and often require a re-start of the lien process in cases similar to those you describe...

If it were me, I would seek advice from a legal mind like Jeffrey Greenberger.

Good Luck with this one!

John Roser

Aloha KayBee,

I'm in agreement with John's reply. Do you have an attorney your site uses? I would certainly check with him. Perhaps one of our legal minds will check in here and shed some light.

Without knowing specifics, I would venture to guess that by accepting a lump sum payment and setting up a payment plan, you effectively clouded your original lien and would need to begin the process again. That said however, depending on how you structured your payment arrangement and the language therein, that may stand on it's own merit in placing the customer in default sole and apart from the lien process.

Any chance these customers would come up with a lump sum amount you would take in exchange for them vacating? (Based on what you think the units would bring at auction, and what your time is worth in no longer having to deal with them?)

Let us know how it turns out. Good luck!

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Aloha ke akua,
Stoho

"An eye for an eye makes the whole world blind."

John and Stoho, thanks so much for the quick replies and good advice.

Unfortunately, we don't have an attorney that specializes in RE or storage law, and I am always reluctant to ask someone who doesn't specialize.

I did try to structure the payment plan as a stand alone document, but while I try to cover every contingency, I am not a lawyer and can only hope I didn't do more harm than good.

If Jeffrey can shed any light, than would be great. If not, I think I'll restart to lien process to err on the side of caution.

KB

I always say - when in doubt start over. the little that you will lose in rent over that time is small compared to the lawsuit that will surely follow.


Good luck with this one.

Yuppers, I'd agree with Autodoc to re-lien.

Good Luck!

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Aloha ke akua,
Stoho

"An eye for an eye makes the whole world blind."

It would be helpful to know what state you are in.

I am in California. I feel that you entered into an agreement that prohibits you from selling their property at auction. Your entering into that agreement is not wrong, it's just that you need to go after them in a civil court. If you can use the small claims court system for this debt, it would not be very expensive to pursue them.

We have to recognize that once we accept payment, the lien process must start over. Also, it is wise to accept that payment as payment in full and require that they vacate.

You probably got more money out of them then you would have in an auction. Your owner, hopefully, is the winner. What you do now that they are still there is to make them an offer they can't refuse and require them to vacate.

I worked for a bank in criminal investigation. I learned that it's sometimes better to write off your loss than to spend a great deal of energy pursuing someone who doesn't have the money,,,even if you won a lawsuit, they couldn't pay, or spending time with an attorney (sorry, attorneys, I value you, but it does become expensive seeking legal advice so we have to weight that expense against the possible loss exposure.)

Thanks for the opinions. It's so nice to have other owners/managers to bounce things off of.

Colleen, like you, I weigh options against potential outcomes and go with what I think is best - or at least the most defensible. I only have limited funds for attorney fees. We have taken many debtors to court ourselves and have (knock on wood) never lost yet, although there have been a few in which the judgement was virtually uncollectible.

The payment plan specifically provides for the auctioning of the tenant's goods if he defaults. So, I think we're probably ok there, but I don't want to have to carry this deadbeat for another 2 months and go to the time, trouble and expense of the lien process again unless, legally, it's required or prudent.

My state (Michigan) makes no mention of this kind of situation in the foreclosure laws that govern self storage. HOWEVER, what I may have to ask my attorney is this: Are there other laws that apply to all lien situations which may be relevant here? Not being an attorney, I have no idea if there is some general lien law process that applies to all such situations, no matter the industry. That may be the missing piece I'm looking for.

I don't know your state law but you can look them up on line too. I believe better safe than sorry start all over and next time it would be all or nothing get them out and get someone in there that actually wants to pay their rent. There are actually people out there that target us and hope that we make one little mistake so they can sue you for their lifelong treasures and they just put junk in there. Be careful. I hate to feel that way but it is just the facts. It didn't take me long to figure this game out. I have one that goes into lien every 2 months and she always pays at the last minute and trust me I make her pay dearly. Advertising costs, cut lock costs all the late fees certified letter fees and all. But I have it in their contract they know it is coming so there are no surprises

Much as I don't want to, I think I'm just going tohave to bite the bulllet and start the lien process all over again - even though he has never actually been out of lien status.