Wednesday, July 8, 2009

In Response to the Article Published in the Boulder (CO) Daily Camera on July 6, 2009.

On July 6th, Elizabeth Miller of the Boulder Daily Camera published what I thought was a well-written and informative article about storage auctions; including specific information about an auction we had conducted a few days earlier. The article was great – no worries. But the Camera allows people to post comments. Some of the comments showed me that people didn't understand the whole process. Some were downright nasty comments from what I can only consider ignorant, judgmental, and weak people.

To the folks who simply need more information, I have written the following explanation for you. If you need more information, please call me. I'd be happy to answer your questions. For you ignorant, hate-filled people; you can just skip to the last few lines, since knowing the truth and the facts clearly has no bearing on your opinions.

Storage Auctions 101
By Rich Schur, Auctioneer
Schur Success Auction Services

Let's get the rest of the story out in the open. Storage Auctions are a necessary evil. We know, and our clients know, that when we show up to an auction, that EVERY possible effort has been made to settle the renter's debt and that those efforts FAILED. We don't randomly select units and say "gee, let's sell this one". Units that ultimately end up at auction are there for one reason and one reason only: The renter has failed to comply with the terms of an agreement that THEY CHOSE TO SIGN, and that all reasonable collection & settlement efforts have failed.

Let's start at the beginning. Colorado law (38-21.5-101), is very specific when it comes to storage liens. Our clients follow the law and follow standard industry practices, or we will NOT work for them.

  1. When a renter enters a storage facility and asks to rent a space, he does so willingly and by choice. No one from my company or the storage center forced the transaction.
  2. When they enter the facility, they will see a large sign that says "All articles stored by a rental agreement, and charges not having been paid for thirty days, will be sold or otherwise disposed of to pay charges."
  3. They then sign an agreement in which they promise to pay a monthly fee in exchange for the privilege of storing their possessions on the property. This agreement says very clearly that there are penalties for late payments, and that should late payments exceed 30 days, the center has the right to sell the contents at auction.

Considering the above, there's no reason why a renter should be "surprised" that their unit might be up for auction. Having said that, lot's more activity takes place before a unit is sold.

I can't speak for all storage centers. I can only speak from the experience I have with my clients. Most facilities send monthly reminders that payments are due. Once payments are late, additional emails are sent or personal phone calls are made. If those efforts are unsuccessful, management may "overlock" or lock-out the renter so they must come to the office before they can enter the unit.

If these efforts fail, then letters are sent to the renter's address (the address that they provided on the rental agreement). If these letters fail to solicit a response, then Certified letters are sent to the renter. These letters warn that if the renter fails to take care of their obligations, the storage center has little recourse but to proceed to auction.

But wait, we still don't go to auction yet. Despite emails, letters, phone calls, and certified letters, more collection efforts are made. Additional phone calls. Additional emails. If these attempts fail, then the storage center sends notice to the local Sheriff of the pending auction, and publishes warnings in the legal notice section of the local paper. This legal notice has to be published for two consecutive weeks before the auction takes place.

So, at minimum, it takes 30 days of being late before a unit goes to auction. That's assuming we have room on our schedule for the sale. Usually, we book auctions more than 60 days out. During this 60 day period from the renter being late to the auction, management continues to make collection efforts.

Let's understand a very basic principle. Auctions rarely generate as much money as the renter owes. Therefore, it makes much more sense to collect than to sell. In most cases, management delays going to auction for much longer than 60 days. Some of our clients will wait months and months before they resort to an auction. It's not uncommon for units to sit for 6 months to a year before we go to sale.

Remember this too. Storage facilities are a business. Like hotels, like apartments, like retail space. Facilities are built so that others could rent the space. No one goes into ANY business to work for nothing. People who don't pay their bills are a) defaulting on a contract that they chose to enter, and b) depriving the property owner of their rightful rents. Spaces that are in default cost the facility money. Why shouldn't they be permitted to empty the unit and get a PAYING renter in the space? If you rent an apartment and don't pay your rent, you get evicted. Liens are placed against your property. This is no different.

But wait, there's more. Most facilities would rather negotiate with a renter and reach a settlement, than go to auction. There's less liability, and more debt recovery. If renters simply make this effort, they could very likely avoid auction, and also avoid going to collections. When a unit goes to auction, the difference between what's owed (a lot) and what's recovered (much less) is sent to collections.

Do I feel bad? No. I don't like seeing people lose their personal keepsakes, and many of our locations will collect them from the auction buyers so they can be returned to the renter – even when the renter has failed to pay their bills. Most storage auction buyers are good, understanding folks, who will do what they can to return important papers, photos, and personal keepsakes.

The problem is, most renters who let their units go to auction can't be found. They don't answer calls. They ignore emails. They fail to respond to letters and publication. They make no effort to contact storage management or make arrangements to settle their debts. What choice does management have? Usually – none.

Remember this too: Since the auction is designed to recover debt, the greater the unit sells for, the less money the renter will still owe. That's where we come in. We're experts. We run a clean operation. We bring in more bidders and more revenue than any other auctioneers. If anyone can help these renters come close to settlement, we can.

No one in an auction crowd caused the situation. It is an unfortunate circumstance, but a circumstance in which the renter has tremendous control. This is ultimately a result of choice, not mine, not the facility, but a choice by a renter to not honor their obligations.

As to your comments about me and Twinkies… I like Twinkies. I'm 6'0" and 250+. I'd like to see you say that to my face. You know how to find me. My schedule is posted on my web site.

As to your ignorant comments equating what I do as a professional auctioneer to the Nazi SS: I spent years putting my life on the line protecting my community. I have relatives that survived the Holocaust. I DARE you to make those comments to my face. That's what I thought. It's easy to insult people anonymously with a hidden identity. You don't have the courage to own up to your hatred. I guess I'll never see you at my auctions. What a relief.

Sincerely,

Rich Schur

Professional, licensed Auctioneer