Auction

L_Greenwell

What does your business do when a tenant buys back their own unit.

themage

We will allow a tenant to pay off their unit in full right up until the auction starts. If they haven't paid by then, it goes to highest bidder, of course. No matter who buys it, they have 72 hours to clear it out. If somehow a tenant were to get their own unit at auction, they would still owe the remainder of their balance including fees, and it will go to collections if they don't pay it.

ShedStuff

The tenant has that option but they must move out immediately.

 

Orkocean

@themage might want to double check your state statutes as any state i've operated in the legal tenant has the right to pay their bill and reclaim their items up until the point that the winning bidder hands money over to pay for the unit. I've had multiple instances, especially with online auctions where the tenant comes in to pay before the winning bidder has handed money over. 

L_Greenwell

The unit went to auction, the original owner bought it at less than a fifth of the price.  We don't know who buys it until we get the paperwork from the auction site. We will have to send the rest to collections, I guess. Need to read our state laws in Kentucky. Thanks guys.

L_Greenwell

@themage, If you don't mind me asking what collection agency do you go through? What state are you in?  @Orkocean, We do allow the tenant to pay up until the night before the auction ends.  I guess we need to educate ourselves better on the Kentucky laws.Thanks.

Orkocean

Auctions are sales open to the public so banning the renters from buying their own units isn't really allowed. Even if you do who's to say they couldn't just have a 3rd party buy it on their behalf. Just have to accept it's a possibility and when it does happen just keep them on a do not rent list so you don't have to deal with them again and send them to collections if you have one you use.

If it was an online auction you may be upset that they got their unit for 1/5th of what they owed but also think about it, no one else saw enough value to bid more than them on the unit so you weren't going to get more money for it regardless. Be happy the unit is out of your system, one less headache tenant to deal with and have a unit you can now re-rent to hopefully a better tenant.

L_Greenwell

@Orkocean, learning lesson. There wasn't alot of stuff in the unit so you are correct about not getting the amount owed. Better tenant next time, hopefully. Thanks for the input.

themage

@Orkocean you are, of course, correct, and we would gladly accept the tenant's payment in full over a bid anyway. We do still require them to clear out in 72 hours if it gets to auction day. 

@L_Greenwell We use ICSystems. We are in Oregon.

JosieD

Is there a report in Sitelink that is suitable for submitting to collection agencies?

MamaDuke7

JosieD said:

Is there a report in Sitelink that is suitable for submitting to collection agencies?

We always just submitted the Ledger.

teamcapitola

Whenever this happens at my facility the auctioneer will announce that the owner of the unit is present and will be bidding on the unit.

It almost always backfires on the owner; starts a bid war and quickly pushes the price up. Even if the tenant wins the unit, they are still liable for any remaining debt the winning bid doesn't cover; usually sent to collections.

I've had this happen 4-5 times over the years. Most of the time they lose the auction, but one time the guy won. Then he wasn't happy about the whole "you still owe the rest" conversation.

The second one sent a "friend" down with cash to cover the total owed, but the friend thought he could get it for WAY less by bidding..... he lost the auction,  and once the tenant arrived things got ugly.

The third send his girlfriend to bid, and she ended up paying a few hundred more than was owed. She also put another $100 as a cleanout deposit which she promptly lost; she took a few items and abandoned the rest. It was filled with used needles and junk.