Tag - Online Storage Auctions

Online Storage Auctions Spark a Technological Revolution

Online Storage AUctions

For years, the storage auction business operated in much the same way: A storage unit would go into default, the property manager would send out legal notices, then it would set up a live auction to sell off the unit’s contents. Traditionally, these auctions were always advertised through local newspapers, with the sales generally being attended by the same group of people week after week. Storage unit auctions were a small, little-known business that made some decent money for the handful of regulars who knew what they were doing.

All of that started to change once the storage auction reality shows opened up a window to this world for anyone who wanted to peek into it. Suddenly, fueled by dreams of found treasures and a desire to beat the recession, scores of new auction hunters flooded local auctions, hoping to replicate the successes they’d seen on TV. In response to this new demand, the storage auction business took off, and technology helped speed along the process.

The Internet has been crucial in the evolution of the storage auction business. Storage facilities began using their websites to advertise upcoming auctions, moving away from print media. Auction listing services started aggregating this information, making it easier than ever to find upcoming sales.

The most dramatic change, however, has been the development of online storage auctions.

These virtual auctions take place over the Internet, following the familiar format of eBay or similar auction sites. Facilities can post photos and descriptions of their for-sale units, allowing interested bidders to view them and bid from the comfort of home. This dramatically widens the audience for any particular sale and is much more convenient for buyers and sellers alike. It also opened up the doors for private sellers to put their own units up for auction, allowing them to pay off their storage bill or simply make some extra money from unwanted items in storage.

Online auctions are great for buyers because they’re convenient. Instead of driving around town to see units that may not even be worth bidding on, you can browse auctions at your convenience throughout your day. You’ll only need to leave the house once you’ve won a unit. These sales are great for sellers, too, since they generally bring in greater profits and are much less of a hassle to put together.

Once the online storage auction revolution was underway, plenty of people have tried to get on the bandwagon by offering web space for these auctions to occur. In most cases, the sites would make their profit by charging fees to buyers or sellers. Others would work on a subscription basis, charging a flat fee per month for the benefit of having access to all of the ongoing sales.

You don’t have to pay a premium to get in on the virtual storage action, however. OnlineStorageAuctions.com is an entirely free service that offers all of the benefits of other sites without the price tag. The site allows you to buy and sell with no additional fees, and it sports a massive community and plenty of auction variety from across the country.

If you’ve never tried your luck with a storage auction before, now is your chance. With mobile bidding available straight from your smart phone, you can literally start buying from anywhere, no matter how busy your schedule may be.

So, what do you think about online storage auctions? Which storage auction format do you prefer, online or live?

Benefits of Online Storage Auctions for Auctioneers

Online Storage AuctionsOnline storage auctions are undoubtedly beneficial for buyers and sellers. The convenience of online auctions can also be used to an auctioneer's advantage, however, and learning to use this tool for your auction business can put you ahead of the competition. While it may seem counter intuitive, online storage auctions can greatly enhance your auctioneer career.

If you use OnlineStorageAuctions.com to list your auction, you have the option of running the auction concurrently with a live auction. The way this works is that you would place the unit for auction on the site first, then have that auction end right before the live auction begins. You start the live auction at the high bid from the Internet. If no one outbids the starting bid, the unit goes to the online bidder and you move on to your next unit. This sidesteps the legal concerns in states where exclusively virtual auctions are not allowed, and it saves you a lot of time.

Here are the benefits of using  online storage auctions as an auctioneer:

-- Bids are often substantially higher than they would be in person. This means that you can pocket more money from your commission, making these auctions more valuable.

-- The live auction will be a lot shorter than normal since you'll have a higher starting bid. This saves you time and lets you schedule more auctions for one day.

-- In some cases, you can post auctions on behalf of the storage facility and earn a commission on the sale without actually having to conduct a live auction.

-- The auctions are well-advertised through the site's network, which gives your sale more exposure and helps attract more bidders.

If you're never considered using these virtual auction services, now might be the time to do so. As technology changes, the most successful businesspeople are those who can adapt to those changes -- and becoming a pro at online auctions can give you an edge over other auctioneers in your area. Sites like Storage Battles won't allow you to use their service, but OnlineStorageAuctions.com will. And since it's free, you lose nothing by giving it a try.

Online Auction Sites Merge to Fill a Niche

Storage Battles Sealed Online Bids

SealedOnlineBids.com has recently merged with StorageBattles.com and will continue doing business under the latter's name. Altogether, these two sites have over 25,000 registered bidders and cover auctions for 1,000 different facilities.

StorageBattles holds virtual storage auctions. Rather than holding a live auction, storage facilities can list their units online with photos or videos. Bidders then find and bid on units in an eBay-style auction, and can retrieve the items after the sale. This is understandably an appealing option for storage facilities, which may not wish to deal with the mess and liability of crowded auctions, but these sales aren't without problems of their own.

We've talked in the past about whether these online storage auctions are legal. In case you missed it, here's the issue: In some states, property law wording regarding storage auctions is vague. In others, like Texas, it's pretty clear where and how auctions are supposed to occur.

According to Chapter 59 of the Texas Property Code, “A sale under this sub-chapter must be a public sale at the self storage facility or a reasonably near public place.”
By legal definition, the Internet cannot qualify as a “public place” since it's not a physical location. At present, StorageBattles seems confident that there will be no legal ramifications from holding these virtual auctions. All the same, we won't know whether their defense would hold up in court until after a lawsuit has occurred.

In the meanwhile, one thing is clear: This merger made good sense for StorageBattles. Assuming that the legality of online auctions gets cleared up, it's reasonable to guess that they'll become the wave of the future when it comes to storage auctions. Buying out SealedOnlineBids – their largest competitor – before these auctions really catch on is a smart move.

Update April 10th, 2014 - A new competitor, OnlineStorageAuctions.com has entered the online storage auction marketplace. This new site is completely free and offers storage facilities that are located in states where online storage auctions are questionable a legal alternative to online only storage auctions.

Are Online Storage Auctions Legal?

Online Storage Auctions Legal

Update - March 28th, 2013  A new site, OnlineStorageAuctions.com has emerged as the clear choice in the online storage auction niche. The main differences between this site and it's competitors is that it's 100% free to use and it offers a legal alternative to storage facilities who are located in states where the legality of online storage auctions is questionable. This site recently merged with StorageAuctionForums.com, which was, until the merger, the largest storage auction website in the world. OnlineStorageAuctions.com now has more content and traffic than any any other storage auction website on the web.
July 8th, 2012 - Over the past few years, a handful of companies which hold storage auctions online have emerged on the scene. One of these companies is Storage Battles, which recently bought out Sealed Online Bids. We here at Texas Storage Auction Schedules & News are huge fans of online storage auctions because we believe that this concept is the future of storage auctions; however, there seems to be a question as to whether they are operating legally in Texas and some other states.

This legal dilemma boils down to whether or not a storage auction can be conducted online or whether it must be held at a physical location. Some state's self storage lien laws are vague and don't specify where the sales are to be held; therefore, one could reasonably assume that an online storage auction would be permissible. Texas's self storage lien laws, along with a handful of other state's, are not so vague. Chapter 59 of the Texas Property Code, section 59.045 clearly states: A sale under this sub-chapter must be a public sale at the self-service storage facility or a reasonably near public place. So how are companies like Storage Battles operating in Texas? Through a narrow loophole that depends on one's interpretation of what a public sale and what a public place is.

We spoke to a Texas auctioneer and former President of the Texas Auctioneer's Association, about this matter. He replied “ Chapter 59 states that the sale must be a public sale at the self storage facility or a nearby public place. The attorney for TSSA has stated that an Ebay or internet auction does not satisfy the statute in that the internet is not a public place. This is a legal question that will either be resolved by revising the law or a lawsuit.”

According to USLegal.com, the legal definition of a public place is: an indoor or outdoor area, whether privately or publicly owned, to which the public have access by right or by invitation, expressed or implied, whether by payment of money or not, but not a place when used exclusively by one or more individuals for a private gathering or other personal purpose.

We contacted the Texas Self Storage Association about this matter and received the following response: Connie Niemann Heyer, attorney for the Texas Self Storage Association, stated that she does not consider auctions that take place online only are meeting the strict letter of the law requiring that the sale take place at or near the storage facility. Her opinion was published in the TSSA's magazine.

We contacted Sealed Online Bids to find out how they are conducting online storage auctions for storage facilities in Texas. Kevin Gorzny, principal at Sealed Online Bids provided the following response.

“First off I want to address the fact that we have approached the Texas SSA with our stance on the Texas Lien Laws in the form of an official statement, and it was met without any opposition what-so-ever. Our attorney covered quite a few points in regards to the Texas lien laws, but I'll address the specific one you cited. (Referring to: a public sale at the self-service storage facility or a reasonably near public place.) The definition of a consummated sale is the exchange of monetary funds, between the buyer and the seller. Simple as that. Our auctions are conducted online, yes, but the actual process of purchasing the unit-in-lien is a cash-in-person exchange performed at the storage facility where the contents are stored.

To be even more specific: our auctions are live and open for bidding for a period of 7 to 10 days, typically. Once the auction closes, the manager is provided with the buyer's information. They organize a time for the buyer to then come in to the self storage facility's office for the actual purchase where the buyer pays cash for the sale, just as it always has been performed. The overall issue is the fact that every state's lien laws were written long before the mainstream internet as we know it today. Many of these laws are subject to interpretation and common sense.”

Although eloquent, I believe this response is completely off topic. The debate here is not about what a “consummated sale” is, rather, it's about what the legal definition of a “public sale” is. According to Merriam-Webster's Dictionary of Law, a public sale is: a sale (as an auction) that is publicly advertised and that takes place at a location open to the public. Is the internet a location or a public place? It is arguable.

I agree, a lot of state's storage lien laws are outdated; however, Texas revised it's storage lien laws in January, 2012. Are there still sections that don't take modern technology into consideration, absolutely. Texas's storage lien laws still require legal notices to be placed in a newspaper instead of being communicated electronically on a website. Do you really think they would allow the actual lien sale to occur on a website?

Regardless of how archaic some of these laws may be, if you use common sense to interpret (A sale under this sub-chapter must be a public sale at the self-service storage facility or a reasonably near public place) it'sobvious that this law was meant to be quite literal. I think that Sealed Online Bids' interpretation of the Texas storage lien law is a bit of a stretch, but either way, this is a legal question that will inevitably be resolved when a disgruntled tenant challenges the legality of an online sale.

So, are online storage auctions legal?

The answer is - it depends. Each state has it's own unique storage lien laws. To my knowledge, no state's storage lien laws specifically state that storage auctions can be held online and vise versa, no state's storage lien laws specifically state that they can't. The only way to know for sure is to look at your state's storage lien laws to see if they specify a location for where the sale is to be held.

How does this affect the storage auction buyer?

It really doesn't. Most states have laws protecting the purchaser similar to Texas, Sec. 59.007 which states: A good faith purchaser of property sold to satisfy a lien under this chapter takes the property free of a claim by a person against whom the lien was valid, regardless of whether the lessor has complied with this chapter.

How does this affect storage facilities?

Whenever there is a gray area, there will be lawsuits; however, companies who hold storage auctions online are protected through lengthy disclaimers that the storage facility and buyer must agree to before using their service. This leaves storage facilities to bear the brunt of the legal challenges that may arise by former tenants that believe that the law was not complied with. In Texas, Sec. 59.005 states that: A person injured by a violation of this chapter may sue for damages under the Deceptive Trade Practices–Consumer Protection Act (Sub-chapter E, Chapter 17, Business & Commerce Code).

Storage facilities should also consider whether they need to comply storage the lien laws in the state(s) where the online storage auction company's server/business is located. Our advise to storage facilities – consult with your attorney to make sure that this type of sale complies with federal, interstate and your state's storage lien laws.


So, what do you think? Are Texas's storage lien laws specific enough or do you feel that companies that conduct storage auctions online have a good argument? Should storage lien sales be permitted on the internet? Please leave you interesting and creative responses below.