Posts Tagged ‘ Lien Law ’

Storage Wars Lawsuit & the Dark Side of Storage Auctions

October 21st, 2013. By AbiK

Got so much sh*t you need a storage locker? Well, understandably, sheer consumption isn’t the only reason why a lot of folks put their stuff in storage—there are many reasons, including some that are prime material for a “Judge Judy” episode or two. But the reasons for removing the stuff from storage? Well, for some, the reason winds up being an inability to pay their storage locker rent. Never mind why the rent can’t be paid—the bottom line is that the storage facility basically holds the storage locker contents as a form of collateral. And if you’re not paying rent, well then, the self-storage company is ready, able and willing to make some cash off of your precious belongings—by auctioning them off. And, in many instances, they have a right to…but…we’ll get to that later.

Surely you’ve heard of “Storage Wars”?—the popular reality tv show on A&E. Auctioning storage locker contents is the premise of the entire show. And, of course, being reality tv, there is suspense and excitement—and a few tense arguments thrown in for good measure.

That brings us to the lawsuit recently filed by “Storage Wars” former star buyer, Dave Hester (aka “the mogul”). His lawsuit was originally filed in December, 2012, against A&E, claiming that the production company actually staged many of the auctions with goods that were not originally in the featured storage lockers. Basically, he claimed that A&E planted more valuable goods into the featured lockers in order to falsely drum up excitement (and, therefore, more viewers) for the program.

That lawsuit was eventually thrown out, with the judge deeming what A&E chooses to highlight on the show a matter of free speech.

Ahh, but the story, and the lawsuit, doesn’t end there. Hester was let go. According to a report over at The Wrap, Hester’s got a retooled lawsuit and is now arguing wrongful termination, alleging he was fired over his claims that the show was rigged.

The outcome of Hester’s lawsuit remains to be seen. But rigged locker contents or not, the lawsuit has put focus on the practice of storage locker auctions—and wrongful auctions—in general: what are they and why do they happen? “Storage Wars” makes storage locker auctions seem like some unclaimed freight or abandoned merchandise sale. Unfortunately, for some, that’s not quite how things happen—they haven’t quite abandoned their stuff; they simply can’t (or don’t) make the rent payments. And in some instances, the storage facility has simply auctioned off the wrong person’s stuff. Yes, it’s happened…

Example: Dubey v. Public Storage. Here’s an excerpt from court documents on that one:

“Kitchen [former storage facility property manager] told Dubey that her property had been auctioned off. She told Dubey that her rent had not been paid and that Metropublic records showed that there was $191 in past-due rent for unit E-11. However, unit E-11 was rented to someone by the name of Maria Cruz, and Dubey’s rental agreement showed that her unit was C-10. Cruz’s rental agreement had a computer-generated designation of unit number E-12. Such unit number had been scratched out and next to it, handwritten, was the number E-11.”

In Dubey’s case, she showed up at her rental storage locker one day to find it inaccessible. When the operator opened it, it was empty—except for some remaining debris, remnants of Dubey’s belongings. Needless to say, Dubey was a bit taken back and things wound up in court.

In fairness, if a self-storage facility plays by the rules, they do have a contractual right to move to an auction. But, the key is they have to play by the rules. The “rules” in this case, are state lien laws.

Lien laws regulate all aspects of when and how storage unit contents can be auctioned. They cover everything from when a storage operator can replace the lock on a unit, to how a renter is sent default notices, to how long the renter has to ‘make good’ on his payments, to how and when the operator can publish an advertisement for an auction.

For example, recently new legislation went into effect in Nevada regarding how a storage facility operator must notify a tenant about being in default. Nevada self-storage facility operators may now notify tenants about impending lien procedures by email, as well as assess late fees and deny access to tenants in default after 10 days. If there is no confirmation of the email, a second notice must be sent by verified mail to the last known address of the tenant.

While there are many legitimate storage auctions, some are not. There are rules to be played by and operators need to follow those rules before they auction off storage locker contents. And if you’ve got stuff in storage, it’s worth it to not only read your contract closely, but also check out your state’s self-storage lien laws; you can do that online.

 

 

Tags: Lien Law, Storage Auction, Storage Wars, Wrongful Auction
Posted in Emerging Issues, lawsuits | 17 Comments »