RE: auction unit sells more then tenant owed with facility charging a commission fee for the check?

GM_SJ_BSS

This is a first for me.  I have a friend that works at a different storage facility.  They recently had an online auction from a problem tenant who stages units and then doesn't pay the rent so the unit goes to auction.  This is the second time he has tried pulling this with this storage facility just at a different location.  They have already had to refund the buyer's money due to all boxes being empty (the company did not have to refund the money but they did because this is a regular auction buyer that buys a lot of units from this storage company). The tenant places a few items right in the front to make it look like there are valuable items to create higher bids but then all the boxes are filled with newspapers or trash.  He is also known to bid on his own units to get the bids up. Btw he is currently trying to sue a reit storage facility for not going through with an auction due to the unit being broken into days before the sale ended claiming tons of valuables were in there.  Any how this is my question, he had two units go to auction at the facility my friend works at, one sold for over $9000 and the other sold for over $2000, they now have to cut this guy a check and they do not plan on refunding either buyer if these two units have been staged this go around.  So one of the upper management guys in this company says that the storage facility will have to cut the checks but claims the storage facility can charge a 10% commission fee on both checks.  I have never heard of this.  I was under the impression a storage facility can not profit from the sale.  Does anyone know if a storage facility has an auction for more then the tenant owes, can the storage facility minus 10% of the total of checks prior to giving the checks to the original tenant as a commission?

MamaDuke7

We add every possible fee we can think of before we refund anything!  Truly, it's not really making a profit, because they are likely to lose bidders that would be willing to pay high prices at future auctions.  In the end, the facility is probably losing out on a lot of money.

GM_SJ_BSS

Thank you MamaDuke7, I appreciate you taking the time to give me some insight on this.  

AnitaJohnson1269

Intentionally staging a storage unit with empty boxes or worthless items, then intentionally defaulting on rent to force an auction, is illegal. Such actions likely constitute fraud, breach of contract, and potentially criminal conversion or theft, as you are misrepresenting the value of goods subject to a lien. If it were me, I would call authorities and file charges or have the winning bidder file charges.    

GM_SJ_BSS

AnitaJohnson1269     that's a good point, I will relay this to my friend, to be honest, I did not even think about that.

dperry

What state is this facility located? In California we are able to, by law, to look in boxes, bins, everything in the unit. Also, how is yours advertised?  I guess I don't understand how the facility can be held liable for 'damages or financial loss' if it turns out nothing is in the boxes.

MamaDuke7

dperry said:

What state is this facility located? In California we are able to, by law, to look in boxes, bins, everything in the unit. Also, how is yours advertised?  I guess I don't understand how the facility can be held liable for 'damages or financial loss' if it turns out nothing is in the boxes.

I'm in CA and we are NOT supposed to even break the threshold of the unit let alone look inside things!  We NEVER touch the customer goods in any way.  HUGE liability there!

The facility wouldn't have liability, but you'd want to make it right for someone who is a regular auction buyer that got conned. Just so they'd come back next time.

GM_SJ_BSS

dperry said:

What state is this facility located? In California we are able to, by law, to look in boxes, bins, everything in the unit. Also, how is yours advertised?  I guess I don't understand how the facility can be held liable for 'damages or financial loss' if it turns out nothing is in the boxes.

This is in CT.  Here in CT we can also open boxes to verify there are items in them but can not dig through the boxes.  This was told directly to the owner where I work at the Vegas expo speaking with storage lawyers that were there.   All my years in storage, I was told this was a big no no, but do to units being staged more often, we will open a box, not put our hands in it but now we video tape the entire process.  My friend works at huge reit company and they do not open boxes.   The facility this happened at, has not given the tenant the money yet, I think they may be looking deeper into this as they found out he apparently has multiple lawsuits going on with storage facilities and a few police stations because he keeps trying to file police reports against the storage facilities and is being told by the police it's a civil matter and they can't do anything so he is now trying to sue them as well.  Very bizarre situation.