Occasionally, the bids on a storage unit at auction can go very high. The unit might be filled with rare items and collectibles, or the bidders may just be eager to win the unit in hopes of turning a profit on its contents. In some cases, the price of a unit can be dramatically inflated by overenthusiastic bidders, and the auctioneer might find himself bringing in a substantial sum of money for the items being sold.
When this happens, who gets to keep the profits?
Although it may not seem like it at times, storage facilities are not actually in the business of selling their units. Facilities exist first and foremost to rent out storage space to people, and these facilities make their money by collecting monthly rent. Auctions only occur when a renter has defaulted on these rent payments.
The purpose of this auction is to earn back some of the money lost in unpaid rent while clearing out the unit and making it available for the next renter. Facilities do not seek to earn profits from these auctions. In fact, in some states, they cannot legally make a profit from a lien sale.
Officially, the proceeds of an auction go first toward paying off the lost rent. If there is any overage, the facility manager must attempt to send that money back to the renter. If this fails, the state laws may allow the facility owner to hold onto the money for a predetermined amount of time. At the end of that period, the state will let the storage facility keep the money. This policy does differ from one state to the next, however, and the majority of states do not work this way. Instead, these states require the money to be held in state-operated escheatable accounts, where the money may linger indefinitely unless the original tenant steps forward to claim it.
The only person at a storage auction who will benefit from high bids is the auctioneer. Auctioneers are paid a commission based on a percentage of the total bid, so it's in the auctioneer's best interests to get the bidding as high as possible. That said, most storage units aren't worth much money, and the bidding often fails to go over the amount owed on the unit. Overall, no one is getting rich off storage auctions but many people on both sides of the auction are able to pay their bills with them.