Know the Kind of Sale You Can Have
Common questions asked by operators include: Do I need an auctioneer? Can I sell it myself? Do I have to sell at the facility? Can I sell it in lots, or do I have to sell it piecemeal? Can I have a garage-style sale instead of a true lien sale? The answer to these questions is found in your state self-storage statute.
If your statute refers to an auction, you must conduct an auction with a licensed auctioneer, or somebody else acceptable under the auctioneer statute in your state. This information is never found in your self-storage statute. The requirements of an auction are always found in the auctioneer statute in your state.
Do you have to sell the items at your facility? This is almost always required by your statute. There are some exceptions, such as if the facility is not suitable, the statute may require the sale be conducted at the closest appropriate location. Those who allow a dealer to pack up everything and take it to an auction house 20 miles away to combine with other property for sale are likely violating their state statute.
Can the items be sold in piecemeal or lots? Generally, the statute doesn’t speak to this, and you can sell either way. However, holding a garage-style sale is usually not acceptable because you’re setting a price for the items rather than letting the free market set their price or value.
If you’re uncomfortable about how you’re conducting lien sales or if this article raises questions or concerns, you need to get answers before your next sale. Consult with your attorney, your state self-storage association or other experts in the industry. Learn how to correctly conduct lien sales or you many find yourself on the losing end of a wrongful-sale lawsuit.
This column is for the purpose of providing general legal insight into the self-storage field and should not be substituted for the advice of your own attorney.
Jeffrey J. Greenberger is a partner with the law firm of Katz Greenberger & Norton LLP in Cincinnati and is licensed to practice in Kentucky and Ohio. Mr. Greenberger primarily represents the owners and operators of commercial real estate, including self-storage owners and operators. To reach him, call 513.721.5151; visit www.selfstoragelegal.com.