By John Carlisle
Self-storage is a globally viable industry because people everywhere love their stuff. They love it so much they stockpile it beyond what their homes and offices can hold, and many turn to self-storage for a solution. But some fail to pay their storage bills, leaving facility operators in a lurch unless there’s a process in place to place a lien on stored property, collect debt and, if necessary, conduct a self-storage auction.
Along the same vein, operators need guidelines for navigating the treacherous avenues of liability. When tenants store certain sensitive property, such as documents, weapons or vehicles, the legal procedure for selling, discarding or destroying these items is crucial for protecting operators against lawsuits.
Each of the United States has laws that define the process for self-storage liens. Though these laws vary, many of the tenets are similar, due in large part to a unified lobbying effort by the national Self Storage Association and the individual state associations. But Canada’s lien-law endeavor is ostensibly less streamlined and consistent, and provincial differences can be extreme. Absent a clear statute in each area, operators must choose which laws to follow. Even when a formal process exists, some operators bemoan the tremendous amount of time and resources it takes to litigate.
“Because there are no set rules, everyone does things radically different,” explains Robert Madsen, president of U-Lock Mini Storage Group in British Columbia. Madsen, who’s on the board of directors for the Canadian Self Storage Association (CSSA) and secretary of the Vancouver Island Self Storage Association, says the CSSA is making it a priority to create best-practices guidelines for members. When they will be available is uncertain, but Madsen does make his 15-point lien and auction checklist available for others to use.
Madsen also says the popularity of “Storage Wars” and “Auction Hunters” TV shows is having an effect on Canada self-storage law. Because of increased industry attention, facilities stand to benefit from conducting auctions, whereas in the past, there was little interest from Joe Consumer to attend a self-storage lien sale. Madsen reports being able to recoup nearly 100 percent of his lost revenue from delinquent tenants.
If auctions catch on industry-wide, it will be important for operators to know how to conduct these types of sales properly, Madsen says. Otherwise, a highly publicized lawsuit could cast the self-storage in a poor light. “The big fear is the operator will make things up on the fly,” he adds.