How a Self Storage Space Ends Up At Auction

Jon Fesmire | Apr 05, 2021 @ 10:58 AM

Self storage helps countless people every year to move, store off-season items until they need them again, keep business inventory from overwhelming their offices and homes, protect household items when going home from college for the summer, and much more.

So long as tenants pay their rent on time, behave in a friendly way when using their unit, and don’t store anything illegal, they can maintain a positive relationship with the property they’re storing in.

However, storage properties are strict when it comes to paying bills on time. You may be surprised how quickly a tenant can go from good standing to forfeiting everything they’ve put in their unit.

Let’s take a fictional person through the process. We’ll call him Jack. Here’s what Jack can expect if he stops paying his self storage rent.

The process that takes Jack from being a valued customer to losing his unit can vary from what we describe here depending on the property and state laws, but the following is fairly standard.

Here’s a short story about the auction process, in six short chapters.

Chapter 1: Neglecting Advice

Jack has moved into a smaller apartment than he had before and finds he has too much stuff. So, he decides to get a storage unit for all the things he doesn’t need right now. He ignores the advice of his friends to declutter first and get rid of things he doesn’t need.

If he had done this, he could have rented a smaller, more affordable storage unit for the rest and made a little money on the side, selling his old stuff on eBay, Craigslist, or OfferUp.

He boxes his extras, rents a 10x15 unit, puts his stuff in there, and forgets about it.

The next month, he forgets to pay on time and incurs a late fee. He pays the bill but ignores the facility manager’s advice to set up automatic payments to ensure he doesn’t forget again.

Chapter 2: Late Fees Rising

When Jack’s next bill comes due, he forgets to pay it again. After five days, the facility adds a $10 fee. Note that these first late fees are typically between $10 and $15. Jack neglects to pay.

He’s just paid his apartment rent and is worried that he won’t have enough money left over for food and gas if he pays his storage rent. If he had followed his friends’ advice, he could have rented a 5x10 unit and definitely had enough to pay his storage rent.

Ten days after the due date, the facility tacks on the second late fee, which is now an additional $20. Jack is afraid the all-in cost of his storage space and late fees is getting higher than he can afford, but he puts it in the back of his mind.

At this point, he would have been better off asking a friend or family member to lend him the rent money and then immediately began decluttering his unit. With that done, he could have moved what was left into a smaller unit, paid back his relative, and had a little money left over.

Chapter 3: Inaction Leads to Even More Fees

Five more days pass.

It’s now fifteen days since his rental due date, he owes his standard rent and an additional $30 in late fees. At this point, his late payment is causing extra paperwork for the facility and is becoming a burden, so they add another $30 fee. They send him a letter explaining this. Now he owes his rent plus $60.

Quick note: these fees can vary quite a bit depending on the facility.

While Jack is legally obligated to pay, he has some options. He can still get into his unit and begin that decluttering. If these things are worth storing, surely he can sell some and pay that bill. Besides, if he goes through his stuff, he’s bound to discover that he doesn’t really need or want a lot of it anymore.

Still, he hesitates.

Chapter 4: Lien Letter and Overlock

Fifteen more days go by. Jack is now 30 days late, and he figures he’ll pay the rent, late fees, and the new month’s rent all at once and have it done with. But, when the next month rolls around, he’s short on funds.

The facility sends him a lien letter that covers how much he owes. They’ve added a fourth fee, he owes the new month’s rent as well, and the facility manager has overlocked Jack’s unit. Now, unless Jack pays the bill in full, he can’t access his stuff at all.

This is what Jack is currently looking at:

  • 30 days late on rent

  • Owes two months of rent

  • Owes $60 in late/administrative fees

  • The self storage property has applied one more fee to his account

  • The property has sent him a lien letter

  • The property has overlocked his storage space

  • He must pay his full balance or can’t access his space

Chapter 5: Heading to Auction

At this point, Jack is in a really tight spot and is unable to pay. Then, 18 more days go by so that it’s 48 days after he should have, and could have, paid his bill on time.

Jack receives a final notice from the property. This is called a “notice of sale,” and it gives him two days to pay everything, or he forfeits the ownership of the contents of his space to the property.

Jack can’t pay, so he decides to give up on his space.

The two days pass, and the property can legally call the space abandoned. From there, they set up an auction day for it and other abandoned spaces. The property holds these auctions as a way to recoup some of the losses from missed payments.

Chapter 6: Auction Day Arrives

The property will list an auction date in local newspapers. Anyone can attend the auction and bid on Jack’s and other peoples’ spaces.

Auction day comes, someone bids on Jack’s space. That person wins the bid and everything inside the space now belongs to that person.

Storage properties don’t want to put your space on auction. They just want to run their business, but when people don’t pay their rent, they have to take corrective measures.

Pay your rent when it’s due, and you’ll never have to see your stuff sold at auction. If you’d like helpful advice on decluttering, how to store various things properly, and more, peruse our blog.