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  • Lien Sale

    I recently bought a small 33 unit facility. The previous owner, knowing he was selling it, did not pursue non payers. So I inherited several units months in default. I have sent all the state required notifications, cut locks, lots of pictures, and completed inventory forms. I am now preparing to have a public sale to clean out these units. I plan to have a garage type sale since there is nothing of any real value. Looking for any advise from those that have done this type of sale. Thanks

  • #2
    First: Welcome to the forum.

    Second: What is a "garage type sale"? Are you removing all the items and lumping together? Are you allowing bidders to buy just certain things in the units and leave the rest for you to dump? Please explain. Plus, is that type of sale allowed in your state statutes?
    "Never let the inmates run the asylum!"

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    • #3
      lighthousealarms, please check your State's lien sale laws as Pacnw suggests. A lien sale usually requires you use a licensed auctioneer or if you're doing it yourself that you are insured or bonded or... Some members are using the online auctions now with varied successes. Just be sure you've covered all your bases before you host a garage sale instead of a true lien sale. You sure don't want to get hit with an illegal sale lawsuit from one of those units full of nothing of real value. Play it safe, lien sales can be your worst nightmare.
      Gina 6k
      twitter.com/GinaSixKudo
      VM: Four-Oh-Eight- Seven-Eight-Oh-Eight-Oh-Seven-Nine
      storagebizhelp@gmail.com



      You only live once, but if you do it right, once is enough!
      I am not an attorney, just an experienced manager who is willing to share what I have learned. Your thoughts, practices or opinions may vary and neither of us may be right.

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      • #4
        I'll bet you that your state doesn't let you just willy nilly sell it. You have to follow the process-which is sounds like you have partly, then if the state requires it (and I'm going to bet they do) auction it formally, with at least 3 bidders etc. etc. Before you do ANYTHING else regarding the units-print out the state storage/lien laws.
        I want buns of steel.
        I also want buns of cinnamon.

        Newcastle, WA

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        • #5
          My input: The point of an auction isn't really to recoup the money by selling their stuff. I mean, if that happens great, but if they stopped paying they probably came to the conclusion that the stuff in there wasn't worth keeping. Your goal here is to get the unit back in service to a paying customer or use the threat of an auction to keep your delinquency low. But if you do have to sell a unit, selling "all or nothing" is also how you avoid getting stuck cleaning out the 95% of the stuff that is trash anyway.

          I've had units go for $20. And that beats dealing with the contents any day.

          Even if it is legal in your state, no way would I want to deal with the hassle of what you described. Sounds like a lot of work and a lawsuit waiting to happen.

          Or, how about when the renter or their spouse comes back and buys just the few of his own things that he/she wants? That could be a real train wreck.

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          • #6
            Thanks for the responses. The state law merely says by " public or private sale ". The local auction company isn't interested because there isn't anything of any value. I do like the idea of selling it as a unit. Would be much easier. I realize this is a touchy area so I want to do it right. Everything I have researched online mentions auctions, but since that is not an option wasn't sure what else to do.

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            • #7
              Also since this my first time with this, what if there are no offers? What do you all do with the property in that case?

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              • #8
                I do my own auctions. First time was a little scary, but actually not bad at all to do. In my state the storage laws mention that you need three bidders in order to have a valid auction. I have everyone register so that I have a record of who was there.

                My state law spells out that I can dispose of anything under $100 value any way I please. So, if you get no bids you are free to haul it to the dump or yard sale it if that is what you want to do.

                I'd suggest to check with the state SSA or an attorney to figure out the best action in the future and you will likely want to require all tenants to sign a new lease with you to ensure that you have it up to date and in compliance with the state regs. My state (WI) for instance requires specific lines to be in bold. So if your lease isn't right you might be open to getting sued no matter how you run the auction. In that case you could be best off to cut a deal with the delinquent tenants that involves them taking their stuff and leaving.

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                • #9
                  Originally posted by lighthousealarms View Post
                  The local auction company isn't interested because there isn't anything of any value.
                  Many are used to working on commission. I would give them a call back and discuss a flat rate for services. You should also check with a lawyer who is familiar with your state's self storage law to see if you need to have a licensed auctioneer do your auctions of if you can run them yourself. I would completely exhaust all your auction options (and document your attempts to run an auction) before resorting to a yard sale type sale. It's just CYA so a former renter doesn't try to sue you claiming your sold his faberge eggs for rummage sale prices.
                  You can tell a lot about a tenant from his padlock.

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                  • #10
                    This is why I love forums. Lots of people willing to provide their knowledge and experiences. I live in MO. and the laws on self storage are pretty basic and straightforward. Auctions are not required only that the sale be in a"commercially reasonable manner". And I made sure every requirement in the lease was included when I drafted it. I also send 3 notifications on the delinquent accounts, the second two advising that continued default will result in their stuff being sold. And I would love to have them just come get their stuff and be done with it. But the two I am preparing to liquidate are unreachable. I even tried Google and Facebook among other places to try and find them. In fact I think one of them is doing time in prison. Again thanks for all the info.

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                    • #11
                      Originally posted by lighthousealarms View Post
                      This is why I love forums. Lots of people willing to provide their knowledge and experiences. I live in MO. and the laws on self storage are pretty basic and straightforward. Auctions are not required only that the sale be in a"commercially reasonable manner". And I made sure every requirement in the lease was included when I drafted it. I also send 3 notifications on the delinquent accounts, the second two advising that continued default will result in their stuff being sold. And I would love to have them just come get their stuff and be done with it. But the two I am preparing to liquidate are unreachable. I even tried Google and Facebook among other places to try and find them. In fact I think one of them is doing time in prison. Again thanks for all the info.
                      Call a neighboring facility and ask them who they use for auctions. They may even use online auctions-but it will give you a line on someone who is used to storage auctions.
                      I want buns of steel.
                      I also want buns of cinnamon.

                      Newcastle, WA

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                      • #12
                        Have you considered an online auction? I hear they get more for the units because people from different towns and even states can bid. You might want to check into them.

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                        • #13
                          On line auctions is the place to go. Way less hassle and more money on the bids and only one person, the winning bidder, shows up at your facility.
                          "Never let the inmates run the asylum!"

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