DEAR WALDMANS: I manage a self-storage facility in Texas, and am fairly new at this job. I have been faced with a real dilemma concerning the rules for an auction. The company I work for does not provide us with a book of storage rules. We must ask our supervisor, but with mine, I feel like he makes up the rules as he goes along. We recently had an auction and I mailed certified letters to the tenants when he cut the locks. He placed the ads in the paper once. One of the tenants that had been sent a notice called and asked if he could bid on his own unit. I did not know the answer, so I asked my supervisor and was told he could not.
At the sale, everyone interested in bidding was given a form for each unit. When the forms were turned into the supervisor, he awarded the unit to the highest bidder. I was talking to a manager at another facility and asked him if this was the way an auction was supposed to be handled. He said he had a book of rules and guidelines that indicated the tenant can bid on his own unit. He also said the way we had handled the auction was not legal due to the fact that theirs were sealed bids and not opened to the public. After the sale, I had a telephone call from a tenant of one of the auctioned units. He told me he had looked over his rental agreement and could not find any stipulation that he was not allowed to bid on his own unit. I told him I had questioned my supervisor and that was what I was told.
I really like the storage business, but I'm feeling uneasy about doing something illegal. Please give me some information on conducting an auction.
--FRUSTRATED IN TEXAS
DEAR FRUSTRATED IN TEXAS: It is rewarding to see an employee who is concerned about the right and wrong way of doing things. First, it would be a great benefit if the facility had some rules in writing to follow. You may suggest to one of your supervisors that he check out our Web site for books on rules and procedures. The Texas Mini-Storage Association also offers a great deal of information.
It would benefit you and your fellow employees to research the rules and regulations on storage facilities in your state. Not all states are the same. Also, you may want to investigate and find out if the manager or someone above your supervisor does have a copy of your facility rules. I know this would have to be done very carefully, but, as you stated, you like the business, and I believe if you had someone to teach you the correct procedures, it would make you an excellent storage-facility employee or maybe a manager one day.
When a tenant's unit gets to the point of going to auction, there are many rules that must be followed--and exactly by the book. As to the amount received on each unit, if the bid is more than what is currently owed on the unit, the facility does not keep any amount over what is owed. Most states allow you to collect the costs of the sale. Any excess goes to the owner or the state if the owner can not be found, so you are correct in following your instinct to investigate this situation further. You will be faced with this same dilemma again and again. Auctions are just a normal part of the operation of a storage facility. The rules and regulations that storage facilities are under should be followed to the dot at all times. It only takes one unhappy tenant to file a lawsuit. When that happens, it creates tension, loss of time, work and extra work. Lawsuits are never a pleasure for either party and need to be prevented whenever possible. I wish you luck in the business.
A father-daughter team, the Waldmans are self-storage owners/operators and attorneys.
In addition, Ms. Waldman holds a master's degree in labor and employment law from
Georgetown University. The Waldmans are co-authors of the industry's leading series of
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Views and opinions on legal matters are those of the authors. Professional counsel should be obtained before any determination or positive action is taken.