Storage Facilities That Don’t Have Auctions

Lately, I have noticed that around 15% of storage facilities in our area don't have storage auctions at all. Although some facilities claim to have a perfect payment history and that they haven't had to have an auction in years, one has to wonder what these storage facilities are really doing with contents of the storage units.

Now, I can understand that some storage facility owners don't like dealing with the expense and headache of holding a public auction. Placing a legal notice in a newspaper can be expensive and if the unit or units aren't worth very much, the facility could actually lose money by holding an auction.

I have even spoken with facility owners who claim that the contents of the foreclosed units are mainly trash and that they are taking the property to the dump. Who are they to decide what has value and what doesn't? Most storage facility owners are millionaires and in their eyes, common items could be viewed as worthless. Besides, you've heard the old saying, "One man's trash is another man's treasure." If a storage facility throws away the tenant's property, this isn't fair to the tenant because they could possibly have recovered some money from the sale of their goods.

In the state of Texas, storage facility owners are obligated to contact the delinquent tenant, if they have recovered more than what was owed in back rent and late fees from the sale of the tenant's property. Any overages must be refunded to the tenant.

Lately, I have spoken with several storage facilities that dispose of the contents in storage units by having a garage sale. Basically, they place an ad for the garage sale in the local newspaper, then they remove the contents of the unit and sell each item individually. This can be a good way for the facility to get top dollar for the merchandise, but is it legal? When these storage facilities have garage sales, the contents from multiple units are mixed together. There is no way to tell how much money is recovered from the sale of each tenant's property, thus depriving the tenant from any refund.

Some storage facility owners even have a small group of people that they contact when they have a unit for sale. They make a few phone calls and then the unit is sold. They never even notify the public. In my opinion, the only way to fairly dispose of a delinquent tenant's property is to offer it for sale to the general public..

Lately, I have even noticed a few storage facilities that have opened resale shops. Now, I'm not totally against this but I do believe there is a conflict of interest. If a storage facility owner has to keep the inventory of his thrift store fresh, they are less likely to make payment arrangements with the delinquent tenant. I can understand placing the contents of the unit in a resale shop if the storage unit went to auction and nobody bid on it; But, I feel that selling the contents of the unit in a resale shop without holding a public auction is unethical. Another thing to consider is, if your personal property was foreclosed on, would you want it displayed at a thrift store in your community?

So what's your opinion? Should storage facilities be required to hold a public sale in all circumstances? Should storage facility owners be allowed to operate a resale shop at the storage facility? Do you think it is legal, ethical or that a conflict of interest exists?

Please leave you interesting & creative responses below.

2 CommentsLeave a comment

  • Because of the Chapter 59 requirements relating to overage refunds, I think that any method which can accurately document the sales value of the items is acceptable. Garage sale or thrift store would only be compliant if the seller has an accurate inventory control system which would track EVERYthing to the penny. Systems with this ability are cost prohibitive for these facilities.

    The “we threw it all out” is a non-verifiable liquidation and I would assume it would be lawsuit worthy. Prove to me that you threw away everything. If so, why is my Tiffany lamp in your living room now?

    The garage sale method could be pushed to result in litigation about misappropriated funds. My argument would be that My unit was worth more than the others combined with for the sale…. once again, they would have to have an inventory sales system that tracked EVERY item.

    Auctions are the only way to mitigate the landlords potential liability for unfair loss.

  • There is a transfer & storage facility in the Houston area that has 1-2 auctions per month. When you get there, they hand you a list of contents and they don’t even let you see the unit. They also tell you that the opening bid starts out at the amount owed which is usually well over $1,000. They know that nobody in their right mind is going to shell out that kind of money without seeing the quality and condition of the merchandise first. Well, I found out that the owner of the storage facility also owns a resale shop right around the corner. His wife runs it and from what I understand, all merchandise which doesn’t sell at auction (which I’m assuming that is a majority of the merchandise) is taken to the resale shop to be sold to the public. This is really shady business and someone should investigate them. The sad thing is, they work with the police to remove people’s stuff when they get foreclosed or evicted. And the police are oblivious as to what this company is doing. I don’t understand why someone hasn’t filed a complaint about this company to the State.

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