In the age of television and reality shows, the self storage industry has been receiving a lot of attention over the last several years. The show “Storage Wars” has caused people to gain interest in storage auctions. Most people only know what they see on the show, but there is much more to an auction than what is presented.
The first misconception is that storage companies want to sell your unit. We don’t! We never want to sell a persons’ belongings. However, if a person is extremely delinquent, this is a legal process we take to re-coup our costs, and free the space up for a tenant who can pay. Storage facilities cannot make money off of a storage auction, in most states. In fact, if a storage unit sells at auction for more than the tenant owed, we legally (in Pennsylvania) have to send the money back to the tenant. If the tenant doesn’t claim it within six months, it is sent to the Secretary of Revenue in the state government and into unclaimed money funds. Each state has its own set of lien laws, which can be reviewed here.
In Pennsylvania, the lien (auction) process starts once a tenant is a full 30 days past due. Once day 30 passes, we send a certified letter notifying the tenant that we have enforced the lien law on their storage unit. The letter states the day of the auction, which must be 72 days past the due date. The letter also gives them options to make payment in full, and the total breakdown of charges. We make multiple attempts each month to contact the tenant by email and phone. Once the storage unit hits 60 days past due, we then advertise the unit for sale in the local newspaper.
In the days leading up to the auction, we have a locksmith come out and remove or cut the lock off the unit. We have to take photo inventory of the unit in front of a witness. On the show “Storage Wars” they cut the locks at the time of the auction. We do it prior, because there are times when we find items in plain sight that cannot legally be sold at auction, or items that need special documents to be sold. This could be firearms, vehicles and titled property, or unfortunately illegal items.
We can take payment from the tenant up until the moment we lock our rental office doors to start the auction. So, while we may advertise 10 storage units for sale at 60 days past due, five tenants may pay in full on time, and only five storage units will be sold on auction day. Also, there are many legal details we must follow to sell a unit at auction, and if one thing gets messed up or is not done properly, we cannot sell that storage unit.
On the day of the auction, we begin the auction a one location. Then, after the sale if finished at that location we move to the next location in the region, and so on. We hold auctions on different days depending on the region, but they are always on the 15th of the month and after, following our auction schedule each month.
Everyone looking to participate in the storage auction as a potential buyer must sign in with a valid photo ID, phone number and email address. They must sign a form stating they understand the rules of the auction. The forms state the auction buyer must pay immediately after the sale in cash for the storage unit, no one can enter any unit while the sale is being conducted, and you must remain civil at all times during the auction, among other things.
Once everyone has arrived and signed in, the sale can begin. The property manager (and the auctioneer if one is present) will lock up the office and head to the storage units. They will open the first unit and allow the buyers to inspect the contents, but not enter it. After a few minutes, the bidding will start with a minimum bid set for each individual unit. The auctioneer will allow bidding to go on, and give enough time for the final bid to be announced. Once the bidding stops, the unit is sold to the winning bidder, and the auctioneer must lock the storage unit. Then they move on to the next storage unit. No one can enter a sold unit until the complete auction concludes at that location.
Once the auction concludes and all storage units are sold, all buyers head back to the rental office and pay in cash for the storage units they purchased. The buyers receive a receipt and an access code to enter the property. Typically, all storage units purchased at auction must be cleaned out within 48 hours, unless the property manager specifically allows more time. All units purchased must be completely emptied and swept out, just as if you are a regular customer vacating the unit. The buyer may also sign a rental agreement for the unit and keep the space as long as they need, just as any other tenant. Sometimes with larger units, like a 10×30, the 48 hour time frame isn’t enough to fully clean it out.
There is one exception that can occur from time to time. This happens only if personal items were found inside the contents while the buyer was cleaning out the storage unit. We ask that any photographs or personal documents found in the storage unit are either left in the unit after it has been fully cleaned out otherwise, or turned in to the property manager. If we receive any items like this, we will hold on to them for 30 additional days after the auction. During that time, we make attempts to reach the tenant to come by and collect them. We understand items like this are irreplaceable, and we want to make every attempt to return them to the rightful owner.
Another thing to keep in mind is that what you see on TV is not reality in most cases. What I mean by that, is that it is a very rare occasion to find something of extreme monetary value inside an auctioned unit. On “Storage Wars” they will show things found like a guitar signed by a rock star or some rare antique item worth thousands. What you don’t know is that it takes around 300 hours of filming to make one 30 minute episode of “Storage Wars” – and that adds up to a large number of auctions to make one good show. They will throw in a unit that ended up having nothing of value at all and the buyer simply throws it all out, just to make it look truer to life. But most times the main score is furniture in good shape that can be sold, extra clothes and linens, and appliances and electronics. A lot of the buyers on those shows own a consignment or second hand store where they sell what they purchase at storage auctions. And they often don’t make enough selling those items to profit much (or at all) on what they paid for them.
To wrap up, storage auctions are something we never like to see happen to anyone. However, it is just a part of the business that we must deal with. When someone becomes delinquent enough to go into the auction process, we start to lose money. We simply want to have a customer renting the storage unit who makes payments on time and follows our rules and regulations, so that we can operate a successful business. What you see on shows like “Storage Wars” is certainly exciting, but that is not what a typical storage auction looks like at our company or most storage companies. If you have more questions about storage auctions, you can ask any of our property managers. And if you want to experience one for yourself, check out our auction calendar. Although not as exciting as TV makes it out to be, it is certainly something interesting to experience!