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  • Auction laws

    Hello everyone. We are new to the industry and have a question about Auctions. Are we legally obligated to have an auction when someone is in default or can we just take possession of their property?
    We also run a disposal yard on site so it would be much easier for us to just dispose of the contents.

  • #2
    You will need to check your state statutes for that.

    In CA, no way! Some states allow for that if the value is determined to be under a certain dollar amount.
    MamaDuke

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    • #3
      Welcome to the forum and do as MamaDuke recommended. Your state statutes will dictate your next steps. In Oregon if the value is said to be less than $300 we can dispose of contents as we see fit and that can only be determined when we go through the lien process and get to the step of cutting the lock on the unit, again as specified in your state statutes. Let's say you cut the lock and find a safe in the unit. The rest of the unit can have obvious trash in it but I would never chance not going to auction if I saw that safe.
      "Never let the inmates run the asylum!"

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      • #4
        Thanks for the reply.
        So we have checked out our state laws but its hard to determine the way it is written.

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        • #5
          It may seem difficult to understand if you are not used to reading the statutes. What state are you in?
          "Never let the inmates run the asylum!"

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          • #6
            Rhode Island

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            • #7
              I would have to believe that you must sell the contents to satisfy the lien. Because item 34-42-4(g) states: "The owner may buy at any sale of personal property pursuant to this section to enforce the owner's lien." That says (to me) that you can't simply take possession and do what you want or toss the stuff.
              MamaDuke

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              • #8
                It also states IN ITEM 34-24-4 (1) (e) that the personal property will be advertised for sale OR WILL BE OTHERWISE DISPOSED OF AT A SPECIFIED TIME AND PLACE. Also item 34-24-4 (d) if the claim has not been paid in full as demanded and THE OWNER WISHES TO SELL the property. Sounds like it gives you the option.

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                • #9
                  https://law.justia.com/codes/rhode-i...ction-34-42-4/


                  Seems pretty clear and I do not see a way to determine a value and dispose of as you wish, so that means follow the outlined lien process and sell at auction. What surprised me was this:

                  (f) Before a sale of personal property, any person claiming a right to the personal property may pay the amount necessary to satisfy the lien and the reasonable expenses incurred by the owner to redeem the personal property. Upon receipt of this payment, the owner shall release the personal property to the payor and have no further liability to any person with respect to the personal property.


                  ANY PERSON? WOW, unless I misunderstood.
                  "Never let the inmates run the asylum!"

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                  • #10
                    Originally posted by gladu View Post
                    It also states IN ITEM 34-24-4 (1) (e) that the personal property will be advertised for sale OR WILL BE OTHERWISE DISPOSED OF AT A SPECIFIED TIME AND PLACE. Also item 34-24-4 (d) if the claim has not been paid in full as demanded and THE OWNER WISHES TO SELL the property. Sounds like it gives you the option.
                    I believe, unless I misinterpreted, that this is about a living property, like a home or apartment, as it relates to the word landlord as I read it.
                    "Never let the inmates run the asylum!"

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                    • #11
                      Looks like we better cover ourselves by having the auctions.
                      I want to thank the two of you for all the help! I mean actually taking the time to read the R.I. laws and help is very much appreciated!


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                      • #12
                        Do yourself a BIG FAVOR, read the self storage statutes and become very familiar with them and get to the point where you know them and don't have to look them up. I printed out all that pertained to me in Oregon and if I have any question in my mind I can reread them. I highlighted the most important ones. If you are staying in this industry you need to do this. Good luck.
                        "Never let the inmates run the asylum!"

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                        • #13
                          Originally posted by gladu View Post
                          It also states IN ITEM 34-24-4 (1) (e) that the personal property will be advertised for sale OR WILL BE OTHERWISE DISPOSED OF AT A SPECIFIED TIME AND PLACE. Also item 34-24-4 (d) if the claim has not been paid in full as demanded and THE OWNER WISHES TO SELL the property. Sounds like it gives you the option.
                          I read that as they can sell or hold on to the space hoping for payment. When they give the option to buy it, you clearly can't just decide to do whatever you want with it.
                          MamaDuke

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                          • #14
                            I worked for a gentleman in Texas. He always took things through the entire auction process, He said, "Makes life easier."

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                            • #15
                              Originally posted by gladu View Post
                              Hello everyone. We are new to the industry and have a question about Auctions. Are we legally obligated to have an auction when someone is in default or can we just take possession of their property?
                              We also run a disposal yard on site so it would be much easier for us to just dispose of the contents.
                              Another option you may have, if you can still get in touch with the tenant: Send them an email asking if they agree to relinquish unit A to your site or have them come in and sign a relinquishment. Sometimes our tenants will do this so we stop collection calls and then we go in and do what we want with the contents.

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