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Legal Advice on Collections

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  • Legal Advice on Collections

    Collections are probably one of your least favorite parts of the job. Who wants to bug people about money! You also need to make sure you're following the law. Industry attorney Murphy Klasing provides expert advice on how to do this.

    What additional advice would you offer?
    Amy Campbell
    Editor
    Inside Self-Storage
    [email protected]

    @AmyCampbell_ISS
    480.281.6091

  • #2
    Broad strokes but essentially correct. Calif is pretty strict -you have to be careful with collections calls here. Even too many calls can be a call for a lawsuit as it's called harassment. Common sense for sure.
    "The comeback is always stronger than the setback."
    Mom, Navy Vet, genealogist and voracious reader
    Always sunny in California

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    • #3
      I just keep my calls as a "courtesy"
      And I say that word!

      My calls go like this>>>>>>>>>>>>>>>>>
      "This is a courtesy call to remind you that your storage rent remains unpaid and today (Sept 14) it is now X amount of days late.
      Please call the office if you have any questions or concerns!
      Thank you and have a great day!"

      Don't put off until tomorrow, what you can do today.

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      • #4
        Written by a lawyer, they went with their strengths. They mentioned prevention but not in detail.

        1. Lock out as fast as possible. This leaves the "Good" stuff in the unit, so they want to pay.
        2. Move to autopay, so 1 above is quicker, versus waiting on "Check is in the mail".
        3. Escalate the issue and show them the door. a. Raise rent. b. Issue Vacate notice at the same time you raise the rent. This way if they don't vacate they have to pay higher rate.
        4. Even if they pay before an auction, we still have them vacate.

        We used to have about 25 past due out of 100 when we first started, and this would work down around 8 actual auction units.
        Now we have about 8 past due out of about 1,300; with around 2 actual auction units.

        We could not have grown if we did not improve our handling of past due customers. Moved to a Prevention mode.

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