Self-storage operators face issues similar to other landlords when confronted with defaulting renters and their attempts to evict self storage tenants.
As a self-storage operator, your costs remain constant (or increase), but you lose out when you don’t collect your monthly rental fees.
Most states have laws that permit lien sales. These require you to follow specific steps to sell the contents of a storage unit, usually by auction. (States may have their own names for the sales, such as “storage lien sale,” “replevin sale,” “storage unit sale” or “storage auction.”)
These procedures usually require notification to the unit renter as well as publication. A good compilation of those laws is available at www.InsideSelfStorage.com.
These local requirements must be followed carefully. All too often, an upset unit owner will seek to challenge a sale. At the beginning of the process the operator should verify the unit owner’s military status under the federal Servicemembers Civil Relief Act.
Disputes with Tenants
The unit owner may complain that the self-storage operator did not send the notice to their most recent address, or that the operator knew how to reach the unit renter, but failed to take reasonable action to alert the renter.
Other complaints may be that the newspaper advertisement was faulty, resulting in fewer bidders and less money from the sale. Finally, tenants often complain that they have made payments, but didn’t get credit for them. A renter can go to court to complain about a sale or turn to a newspaper or television station.
What Should Self-Storage Operators Do?
If you have any doubt that you followed the requirements properly to evict a self-storage tenant, it is best to cancel the sale and restart the process. The goal is to eliminate grounds for complaint. The last thing anyone wants is to ignore the rights of our servicemembers and become the subject of a U.S. Department of Justice enforcement action or be the topic of negative news articles.
This could happen to you if you proceed with the sale of the contents of a storage locker without checking first to see if the renter is an active member of the military. Once you have a military status verification, you may proceed in one of two ways.
If the delinquent tenant is not an member of the military, you may start proceedings to auction the contents of their locker. But if they are an active member of the military, you will need a court order to start the proceedings. If there is any doubt, the operator should find a local lawyer to get clearance by the court to conduct the auction.
It is extremely important to comply with the federal Servicemembers Civil Relief Act. Some states have their own, additional laws that self-storage operators need to observe as well.
Rely on SCRACVS
Self-storage operators should use the Servicemembers Civil Relief Act Centralized Verification Service. SCRACVS helps you protect yourself and stay in compliance with the SCRA. The SCRACVS is particularly useful when you don’t have the renter’s Social Security number. We use the database maintained by the Department of Defense Manpower Data Center (DMDC). And we provide military status verifications quickly — usually by the end of the same business day.
If you’re a self-storage operator, depend on the SCRACVS when you have a tenant who is a servicemember and not making their payments.