Imagine the day you packed away personal items, family heirlooms, and everyday stuff you weren’t using into a storage unit, thinking it would be a safe and secure solution. You made regular payments on the rental cost and felt assured that your things were kept out of the way but still accessible.
However, what happens if, due to unexpected financial strain or a simple oversight, those storage payments lapse? The storage company might take steps to auction your storage unit – a process more people are becoming aware of thanks to popular shows like Storage Wars.
In this blog, we’ll explain what happens when your storage unit is auctioned, covering everything from the reasons storage units go to auction, to how the auction process works. Whether you’re a renter, potential bidder, or simply curious about the inner workings of storage auctions, we’ll walk through the process with some historical context and practical tips along the way.
The reasons storage units go to auction
There are several reasons a storage company may auction a unit, with the most common being unpaid rent. Storage companies rely on rental payments as their main source of income, and maintaining unpaid units can be costly. When payments lapse, the storage facility must eventually recoup its losses.
- Non-payment of rent – If renters fail to pay rent on time, storage facilities typically allow a grace period. However, beyond this point, unpaid bills can lead to storage units being subject to the lien process.
- Abandonment – In some cases, renters leave without notice, failing to contact the storage company. After a certain period, the storage company assumes the unit is abandoned and moves forward with storage auction.
A brief history of storage auctions
Storage auctions have been around for decades, with roots in lien laws designed to allow storage companies to recoup unpaid costs. Originally, these auctions took place only at the storage company’s office or at a physical location, but the industry has since modernised.
Nowadays, an online auction and in-person storage auctions alike are standard, enabling buyers from a larger pool to participate in these auctions. With shows like Storage Wars, public interest in these auctions surged, making them a mainstream event and driving greater transparency and efficiency within the industry.
Understanding the lien process and your rights as a renter
When a renter falls behind on payments, most storage companies initiate a process known as a lien. Legally, a lien gives the storage company the right to sell the items in the storage unit to recover lost rent and associated costs.
- Legalities and renter rights – The lien process is subject to state laws, which require the storage company to follow specific steps before auctioning a storage unit. Renters have the right to receive notice before the storage auction date, giving them a chance to settle outstanding payments. Some storage companies might offer payment plans to help renters catch up on their payments and avoid auctioning off their storage.
- Grace periods and payment options – Most facilities will extend a grace period and may even reach out to renters to establish a payment plan, especially if they’ve kept good standing until recently. However, if there is still no contact or payment, storage companies must proceed with a storage auction to make up for lost revenue.
Being aware of the lien process can help renters act quickly to avoid the auction process. Storage companies follow strict rules to ensure transparency, protecting both the renter and the storage company.
The storage auction process — step-by-step
The auction process, once initiated, involves various stages to ensure fairness and legality. Here’s how a storage auction typically unfolds:
- Notification to the renter
Storage facilities must notify renters of their intention to auction the unit. This notice will state a deadline for payment to avoid the auction. Notices are often sent by post, email, or even published in a local newspaper to ensure visibility. - Lien filing and public notices
If the renter does not respond or clear the payment, the storage company files a lien. This filing not only protects the storage company legally but also serves as public notice. In some cases, auctions are announced in local newspapers, letting potential buyers know when and where auctions are happening. - Auction day
On the auction day, the storage facility gives bidders a brief look at the items inside each unit without allowing full access or interaction. This practice is designed to maintain privacy for the original renter. In-person auctions usually take place at the storage company’s office or on-site at the facility, while a online storage unit auction may be conducted on platforms specialising in storage auctions. - The highest bidder wins
Bidders offer bids for the unit, and the highest bidder wins the unit along with the responsibility of clearing out the items inside. Once the auction concludes, buyers usually have a limited time to remove the contents of the unit.
Types of storage auctions — in-person and online
In recent years, storage auctions have evolved, moving beyond in-person events to include online storage unit auctions. Each auction type offers a unique experience and appeals to different kinds of storage hunters. Let’s look at these two types of storage auctions in more detail.
In-person storage auction
A traditional storage auction takes place at the storage company’s office or on-site at the storage facility. These auctions usually start with potential bidders gathering at a scheduled time, often with the chance to view multiple units in one day.
In-person auctions offer bidders a chance to see the unit’s contents up close, although they are only allowed a limited peek to protect the privacy of the previous renter.
Online storage unit auction
The popularity of online auctions has surged in recent years, making it easier for bidders to participate without needing to visit the storage facility.
Platforms like Storage Treasures and Lockerfox host online auctions, giving users access to their own storage unit across the country. Online auctions are usually conducted through photo or video previews, allowing participants to assess the unit’s contents from afar.
One benefit of an online storage auction is that buyers can bid on multiple units without travelling, which increases the pool of potential buyers and often drives up bids, benefiting the companies.
Both in-person and online auctions have their pros and cons. For the curious or casual bidder, online auctions offer an easy entry point, whereas more seasoned storage hunters might prefer the atmosphere and immediacy of in-person events. Companies benefit from both methods, as each offers a reliable way to recoup unpaid rent.
What happens to items inside once auctioned?
After the auction concludes, the contents of the storage unit now belong to the winning bidder, who assumes responsibility for everything inside. However, certain rules and regulations may still apply to specific items, especially personal documents and sensitive materials.
Handling of personal items
Storage companies are generally sensitive to personal items, such as tax records, photographs, or identification documents, which may hold no monetary value but are of great personal value to the original renter.
In many cases, storage companies encourage buyers to return personal items or allow renters to retrieve them, even after the auction has taken place. Some storage facilities may even reach out to the previous renter in an effort to return items like tax records.
Legal responsibility of the buyer
Once the unit is sold, the buyer is responsible for clearing out the storage unit, including disposing of any items they don’t wish to keep. Buyers must be mindful of local laws when handling sensitive materials and are generally expected to follow facility rules for disposing of unclaimed items in a respectful and legal manner.
For storage companies, the auction process is not simply about selling but about balancing the need to recoup costs with an understanding of personal loss. Many storage companies, though obligated to follow through with auctions, also respect the renter’s privacy and may seek to return items of sentimental value.
What buyers need to know before participating in a storage auction
If you're looking to buy storage units at an auction, a few key considerations can help ensure a smooth and profitable experience.
Auction rules and bidding practices
Bidders must familiarise themselves with the rules of the auction, which may vary between storage companies. For instance, bidders often cannot touch or access items inside a storage unit before bidding. Additionally, sales are usually final, meaning items are purchased “as is” without any guarantee of value or condition.
Understanding risks and rewards
Bidding on storage units is a bit like treasure hunting, with no guarantee of valuable finds. These auctions require careful consideration, as the storage unit’s contents might include a mix of valuable items and worthless stuff. Buyers should assess the risk and bid cautiously to avoid overpaying for units with little value.
What happens with auction proceeds
Once items from a storage auction are sold, the money typically goes towards settling the outstanding debt owed by the renter. Any surplus funds after covering rent, fees, and other costs may be returned to the renter in some cases, depending on state laws.
While a storage auction can be exciting, they’re not without risks. Understanding the process and knowing the rules can help buyers maximise their chances of finding valuable items, while storage companies recoup unpaid rent.
Historical tidbits and the growing popularity of storage auctions
Storage auctions have a surprisingly rich history, influenced by changes in real estate, consumer habits, and even the entertainment industry.
Early roots of storage auctions
Storage auctions, initially a practical response to unpaid rent, have been a part of the self-storage industry since its early days. Self storage facilities initially focused on providing temporary space solutions, but as storage needs grew, so did the necessity for regulations and processes to manage abandoned units.
Influence of television and media
The television show Storage Wars, which debuted in 2010, brought these auctions to a much broader audience. The show’s dramatic approach to “storage hunting” captured public interest, leading to a surge in participation at auctions across the United States and internationally.
Media portrayal of a storage auction added a layer of excitement to what was once considered a niche practice, bringing a new wave of bidders and customers to the industry.
Notable finds and unusual items
Storage auctions have yielded some incredible finds over the years. Stories circulate of valuable antiques, vintage cars, and rare memorabilia discovered in self storage units. In one famous case, a bidder found a collection of gold coins worth over a million dollars, proving that these auctions sometimes do live up to their treasure-hunting reputation.
Conclusion
Navigating the world of storage auctions offers a unique glimpse into the self-storage industry, showing how storage companies and renters alike must follow clear rules to keep the process fair and transparent. From lien notices to final bids, these auctions are a necessary part of keeping storage companies operational while allowing individuals a chance to buy self storage units at potentially profitable prices.
For renters, the takeaway is simple – timely payments can prevent your storage space from reaching the auction block. On the flip side, for those willing to take a chance, storage auctions provide an opportunity to bid on units, with a chance of discovering valuable items or interesting pieces of history along the way. Whether you’re aiming to buy self storage space or simply curious, storage auctions have a story to tell, blending the practical with the adventurous.
Check out our comprehensive guide for a more detailed insight into UK storage auctions.
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Frequently asked questions
What happens if I miss a storage payment?
Missing a storage payment typically results in a late fee. If payments remain overdue, the storage facility may begin the lien process and eventually auction the unit to recover unpaid rent.
Can I retrieve my belongings before the auction?
Yes, most storage companies allow renters to settle payments and reclaim items before the auction date. However, timing is crucial, as once the unit is auctioned, retrieval is no longer possible.
Are storage auctions held in-person or online?
Storage auctions are conducted both in-person and online. Online storage unit auctions are increasingly popular, enabling bidders to join remotely, while in-person auctions often take place at the storage facility.
Do buyers keep everything in the unit?
Yes, buyers generally take ownership of all items in the unit. However, they’re encouraged to return sensitive items like personal documents to the storage company or the previous renter.
Can the original renter receive any leftover auction proceeds?
Sometimes, if the auction recoups more than what was owed, the storage company may return the surplus to the original renter, but this depends on state laws and specific company policies.
