How do you handle an auction that made more than owed?

Amber

We are running into a couple instances where an auction made more than what the tenant owed, and the state law states the overage must be returned. How do you handle this in SiteLink? Ledger adjustments are making the accounting difficult. We usually put it through Merchandise as Auction Proceeds, then credit the account down to remainder, and send the rest to collection. But when there is an overage and we need to issue a refund.... Any thoughts on making this easier?

OutboxChar

My understanding is that they have to come back for the refund, and depending on state law there's a finite time limit. I was never told that you had to tell them?

Orkocean

Gotta check with your state but for instance here you would send them a Notice of excess proceed type of form, let it sit in a bank account for 2 years, if not claimed you then get to claim it for the store.

Amber

The returning it part isn't the issue. We were having problems getting sitelink to accept the overage and issue the refund. We have had to put it in as ledger adjustments and its kind of a nightmare. I did call and speak to a sitelink tech, and he said that if we have the problem again, to call them and have them walk us through it. How do you all process auction proceeds? Do you do them as payments and credit the sales taxes to the customer's account also, or do you do them as merchandise and only credit the tenant's account for the sale amount? We don't think the sales tax should be credited to them. Any thoughts?

skinman

I can't really help on this one as our state.... for now.... does not require sales tax for storage rent. We process auction proceeds as payments. I have only ever had 1 overage on an auction unit. I moved them out and dismissed any refund due and made a note that the overage was to be returned by our corporate office.

@Orkocean In my state you mail the overage check and form to the last known address. If returned we have to hold it for a year. If it is not claimed at the end of the year. We have to give it to the state. 

Amber

Unfortunately here, we have to charge sales tax on the sale, AND contact the tenant with refund. If we cannot make any contact we can send it to the state if we can show we made attempt to contact.

i43storage

Wow - making more than what was due?  That would be great.

Amber

Does not happen often

Orkocean

7 years and it's happened 4 times that I can recall for any store I've been at. The craziest was a 5x5 so the amount owed come auction time wasn't that high, maybe 200ish. The unit sold online for almost a grand due to it being nothing but spools of wiring that contractors were bidding on.

Amber

Nice!! We haven't been that lucky yet. :-)

teamcapitola

I'm happy if we get more than $20 for an auction unit! In 8 years we have never had an auction unit generate anything near what was owed... but on that note, this thread actually made me go and look up what to do if/when it happens! 

Got me out of the "expected results" mindset; don't get caught doing the "what do we do now?!?" dance.

khemnis

teamcapitola said:

I'm happy if we get more than $20 for an auction unit! In 8 years we have never had an auction unit generate anything near what was owed... but on that note, this thread actually made me go and look up what to do if/when it happens! 

Got me out of the "expected results" mindset; don't get caught doing the "what do we do now?!?" dance.

That's right!  That's why I spend some of my down time reading this board, the ISS board, watching SiteLink videos, and doing Webinars.  I always end up learning something new.

kenmore

We have a tenant with a unit and a high value sports car stored. While our rules differ on when to sell the car vs. the unit, they are both sellable. We are SURE the car will yield more than is due, so here's the question: Can the excess proceeds from the vehicle be used to satisfy the remaining balance due on the unit? We're in Washington.

Matt_Rogers

I concur with Skinman and Orkocean

Amber

@kenmore  I don't know about Washington, but in Idaho we cannot. Proceeds for each one have to be applied to only that one. But then if the tenant chooses to use the refund to pay the other unit we can accept it. If they are both in the same sale, the proceeds have to be listed separately.

i43storage

In Wisconsin, anything over and above due goes to the State Treasury.  That being said, there is nothing stopping you from leaving the vehicle in storage and waiting a bit to go to auction - if you get what I'm sayin' ...

Iamkathleen

It has happened only a handful of times but what I have done is posted the $ that was paid for the auction on the payment screen then moving them out and processing the auction.  I think that is the way it is done.  There will be a refund that I send to the main office and they send the $ to the last known address.  I also put a note in Sitelink to make sure that if someone calls I have the info.  If it is not picked up / cashed I think the office keeps it for a year.  After that IDK where it goes since I am not involved in that area.  

MegumiM

@Iamkathleen We do the same thing here with a small difference. We do not mail the check to the tenant but to the office where the auction was held. Once we receive the check we contact the tenant to come pick it up. I believe we hold on to the check for 1-2 years before we can dispose of it. This has only happened once since I have been working in the storage industry. Not a very common occurrence.

websterb

We do not charge tax on storage units either, but have to charge state sales tax on the sold unit. We deduct the taxed amount from their total and that's what they receive.  We contact the tenant and have them come into the office to retrieve their refund and have them sign a form stating the transaction.  We have only had 2 auction over payment that I can recall in the past 13 years. 

Juan

It depends on the law in each State.