What Happens When You Don’t Pay for Your
Storage Unit
Let’s travel down the road of worst-case scenarios for a moment.
You’ve rented a storage unit, filled it with stuff—some of it valuable, some of
it not so much—and after months of being a responsible tenant, you’ve started
to slip. Maybe you missed those payments because of some major life event like
the loss of a job or the end of a marriage. Maybe you went in on that storage
unit with someone who couldn’t pay their share. Maybe you just forgot. So,
what’s going to happen? Can you just keep your stuff in the storage unit for
free for the rest of your life? Is your 1998 collection of Beanie Babies going
to end up on Storage Wars? While the answer to both is almost definitely no,
here’s what you can expect:
Your Storage Unit Will Go
Into Default
If you
hate the phrase “hindsight is 20/20,” you might want to skip this part. The
truth is that most of what happens when you don’t pay for your storage unit is
stated clearly in that lease you signed. When you agreed to the terms in that
document, you were made aware of the point of default on your storage unit. To
put it simply, this is the maximum number of days that you can go without
paying rent before things start to get real. It’s usually about 30 days
however, each facility has their own rules that must comply with state laws.
Once you’re in default, you’ll be locked out of the property and out of your
unit. Facility managers typically cut the lock on your unit and replace it with
a special (red) lock or a red tag. They’ll occasionally also post a letter on
the door cautioning you against trying to enter the unit, which you should
absolutely take seriously no matter how much you want to get in there and grab
your favorite Christmas sweater. That little venture could land you in some
really hot water.
The Facility Will Try Very
Hard to Contact You
The most
important thing that you need to know about this entire process is this: The
storage facility does not want to auction off your stuff. Storage
auctions are not profitable. In fact, they cost the facility a lot in wasted
time that could be better spent maintaining the property and serving tenants.
In addition to this, lien laws, which vary from state-to-state, are taken
very seriously, meaning that if a facility manager doesn’t perfectly follow the
storage auction rules, he or she can end up in small claims court or worse. You
might think you’re stressed about missing payments on your storage unit, but
trust us, the facility’s staff is feeling it too. Remember, some storage
facility managers work with or for someone else. They must answer for any
deviation from normal operations to either their partner(s) or employer(s). When
your storage facility contacts you to let you know that you’re in default,
they’re not just doing it because they’re legally required to. They’re doing it
because they want to work with you to avoid auctioning off your storage unit.
The facility will try to contact you at least once via mail, e-mail, text or
phone. Some state’s lien laws specify that they have to contact you by mail or
electronic mail (email), so if you’ve moved recently and the facility doesn’t
have your new address or an updated email, you might not get their notice. The
facility will do everything they can to get ahold of you, but if your contact
information isn’t up to date, you could miss out on this important
communication.
There Will Be Time in
Between Default and Auction
There’s a set period of time in between going into default and
going off to auction. It’s usually between 30-60 days, but check your state’s
lien laws for an accurate number. If you live in an area where storage units
are scarce and in high demand, don’t expect your storage facility to wait much
longer than that. After all, the property is a business, and it’s in the best
interest of the facility manager to get your stuff out of there so that the
unit can be rented to someone who will pay for it. This period of time in
between default and auction is crucial. As much as those threatening letters
might scare you, it’s important not to let them scare you so much that you
don’t respond. Communicate. Explain yourself. Yes, you’re dealing with a
business, but you’re also dealing with other human beings. It’s not uncommon
for a storage facility manager to strike a deal with a tenant in your
situation. As long as you have been a good tenant and always paid for the
previous months without a problem and treated the staff and manager with
respect, then working out a deal is a win-win for both parties. Remember, the storage
facility does not really want to auction your items, they just want their money
and the unit cleared out.
The Last Resort
So, it’s
happened. Your storage unit is definitely going up for auction. Before the day
of the auction, the facility is required to publicize when and where this is
taking place. You will also get a certified letter or email notifying you of
this information. In the state of North Carolina, storage facilities must
publish a notice of this in either a newspaper or other publication five (5)
days before the auction takes place. This is standard practice in many other
states as well. Even if you live in some remote part of Montana that doesn’t
have a newspaper, the facility will find a way to publicize that auction, even
if it means painting the town with flyers. Since you’re not exactly welcome on
the property, don’t attempt to attend your own storage auction and don’t pull
any double-agent spy moves and send someone else on your behalf either. Some
facilities will agree to pass along your contact information to the buyer of
the storage unit that way you can potentially get back personal items like
photos, tax documents and anything else that would otherwise end up in the
trash. Remember that the storage facility is only trying to recoup the amount
that you owe them, so if your storage unit sells for more than what you owe,
you’re entitled to the remainder. For example, in Nevada you have one year to
claim those funds before they’re turned over to the state.
Going Forward
If your storage unit didn’t fetch a high enough
price to pay off your debt and you’re unable to pay that amount, your credit is
going to take a hit. Unfortunately, this will affect you the next time you rent
an apartment, buy a home, sign up for auto insurance and potentially the next
time you try to rent a storage unit (yep, some of them run credit checks). You
won’t necessarily be denied for these things, but you will be expected to pay
higher rates or pay a deposit up front. The loss of your personal possessions
and the embarrassment of knowing that they’ve been auctioned off might feel
like the end of the world, but things will get better. Going into default on a
storage unit is more common than you think, and we promise that the staff of
the facility won’t spend the rest of their lives resenting you. They’ve got
bigger things to deal with in the long run, and they’re probably more
sympathetic to your situation than you realize. Take the opportunity to learn
from your mistakes and the next time you rent a storage unit (or apply for an
apartment, lease a car or make any large purchase), be sure to read the lease,
double-check the fine print, ask questions and most importantly, communicate.