Due to to the popularity of the storage auction reality shows “Storage Wars” and “Auction Hunters,” new buyers have been flocking to storage unit auctions across the country. Some amazing treasures are found in the storage units on these television shows, leading the general public to assume that this is a common occurrence.
Although you can find some amazing & valuable items in storage units, it just doesn't happen that often. Because these buyers assume that they are going to find some valuables hidden within the unit, the bid amounts have doubled if not tripled since November, 2010. I knew it was just a matter of time before someone figured out a way to capitalize on this change in our industry.
This new scam takes advantage of newcomers, people who like to gamble & people who profile a storage unit. This scam only works in states where the storage facility is required to refund any overages to the delinquent tenant. In order to even think of this scam, you would have to have a knowledge of the storage rental business & storage unit auctions in general, which means that the people involved in the scam could be present at the auction and you would never even know.
Basically, this is how the scam works. The unscrupulous individual rents a storage unit with no intention of ever making another payment. They then stage the unit to peak the interest of the buyers at the storage auction. After 3 months of non payment, legal notices are placed in a local newspaper and the unit goes to public auction. If the unit sells for more than what is owed in back rent & late fees, the overage must be refunded to the perpetrator of the scam . Although the possibilities are endless, here are a few things to look for that these scam artists might do in order to make a storage unit appear to have value.
They may rent a large unit and fill it full of new moving boxes. A unit with nicely organized contents used to be a strong indicator that the owner of the unit had something inside worth protecting. The scam artist could even write things on the side of the boxes to peak your interest. For example: “Grandma's Collectibles”, “Lionel Trains” or even “baseball card collection”. When you open the boxes, they might be empty or filled with worthless items or trash.
In another scenario, the scam artist may place some expensive items in the front of the unit, and then place a mattress or boxes in the way to block visibility of the back of the unit. Keep in mind that the expensive items may have condition or mechanical issues that you cannot see. The scam artists then fills the back part of the unit with worthless items or trash or just leaves it empty. If you assume that the merchandise in the back is as good as the front, not only will you lose money but you might have to make a trip to the dump.
Just remember the number one rule. “Only bid on what you can see.” If you follow this rule, you will have a better chance of making a profit on every storage unit you buy.
I truly hope this article helps some of you avoid making an expensive mistake.
Very interesting and informative beginners do\’s and don\’ts. I have two questions. First on the scams, is Texas a state that has the refund of overage to the renter of the unit? Second do you have to put money down as a deposit when you sign in for the auction? Thanks Jeff
Storage facilities in Texas are required to give the former tenant any proceeds collected over the back due rent and fees. If the former tenant is unreachable, the storage facility must hold these funds for 1 year. In some states, the funds actually revert back to the State itself.
No, you don’t have to put down a deposit when you sign in for the auction. You will only pay a deposit if you purchase a unit. The deposit is to protect the storage facility in case a buyer decided to take all of the good stuff in the unit and then leave all of the trash. Most deposits range from $25 up to $100. Some auctioneers will actually waive the deposit if you establish a good track record with them.
What do you do if a storage unit facility actually stole your storage unit? I’m trying to get info on a fraudulent storage facility here in Utah. I know I have a good case and I also have 6 witnesses that are willing to come to court for me but I’m having a hard time trying to get this situation resolved. The storage facility manager actually threatened me not to get an attorney or call the police or I’d never see my belongings again. As it was they took everything including my personal documents, birth certificates, collage transcripts and personal paperwork. I’m uncomfortable having that floating about. I don’t know what to do from here. What can I do since I was threatened and since I honestly feel my unit was stolen?
Norma,
This question is hard to answer without the storage facility’s side of the story. Were you behind on your payments? Did the storage facility send you collection letters asking you to pay the delinquent rental fees? Did they place the required legal notice in the newspaper of general circulation for your county? I realize that you are upset about losing your personal property but I have never heard of a storage facility stealing a storage unit from anyone. Most storage facilities are not in the second hand merchandise business. Most storage facility owners are millionaires who are in the rental business. They don’t want your junk, they just want their rent and if you don’t pay, you lose your stuff. It’s as simple as that.
If you were having a dispute with the storage facility manager, why didn’t you just get current on your rent, move your property out and then take them to court? Unfortunately, unless they sold your property unlawfully (Example: If they made a made a mistake on or didn’t publish the required legal notice) then there is not much you can do about it. I’m not familiar with the property laws in Utah, but if they collected any overages when they sold your unit then you might be entitled to those overages. In the future, when someone tells you not to go to the police, that is the time to get the police involved.
For anyone else reading this who is in a similar situation, pay the rent and late fees before they sell your property. You can take the storage facility to court to resolve your dispute, but it could take quite some time to get a court date. Most storage units are sold within 90 of your first late notice so you don’t have a lot of time.
Interesting article. I recently was reading about this very issue. I agree newbies are probably most at risk of this happening but even us veterans are used to higher prices and may fall victim to this scam. I had thought about the possibility of this happening in the past but thought no not likely are people really going to want to ruin their credit? Seems as though many facilities are advertising no credit cards needed, no social security numbers so people really have nothing to lose besides whatever cash deposit and rent they may have to put down on the unit. The other scary thing is that though this may legally be fraud I imagine it would be difficult if not impossible to prove so there’s really no trouble anyone can get in for doing this. I heard someone quoted in another article as saying sometimes people will call up after an auction to find out what their unit sold for. Great article and great info for people to be aware of. Every unit is a risk but keep in mind just b/c you see a high dollar item doesn’t mean its actually in working condition so bid accordingly.
Just remember the number one rule. “Only bid on what you can see.” If you follow this rule, you will have a better chance of making a profit on every storage unit you buy. I truly hope this article helps some of you avoid making an expensive mistake.
Amen to this. Good advice not taken out in the field. On two occasions over the last week, the example you used, I saw. “Grandmas Valuables” verbatim was on a unit filled with Boxes and in the back an old Sentry gun safe. The unit went for around 4K. We went in with the people afterwards because they were really nice first timers who had taken their kids on an outing. The safe, broken, cost them another $250.00 to have opened, I suggested to the owner to call Sentry and they would send out the new electronic keypad for about $70.00 and he could sell the safe for $400 bucks or so, but he could not wait. The safe was empty and the boxes were filled with a lot on non valuable items and trash. It was a 10×15 unit with $500.00 dollars tops in lien/late fees, and $3500 or so went to the owners who stages the unit. Pretty nice haul.
Keep up the good work, love the new website.
-Carl
That’s really sad. On a positive note, at least they have a good tax deduction. LOL
Turn about is fair play imho. you guys collect in other peoples misfortune.good for them if someone collects on yours.