Storage Wars Lawsuit & the Dark Side of Storage Auctions
October 21st, 2013. By AbiK
Got so much sh*t you need a storage locker? Well, understandably, sheer consumption isn’t the only reason why a lot of folks put their stuff in storage—there are many reasons, including some that are prime material for a “Judge Judy” episode or two. But the reasons for removing the stuff from storage? Well, for some, the reason winds up being an inability to pay their storage locker rent. Never mind why the rent can’t be paid—the bottom line is that the storage facility basically holds the storage locker contents as a form of collateral. And if you’re not paying rent, well then, the self-storage company is ready, able and willing to make some cash off of your precious belongings—by auctioning them off. And, in many instances, they have a right to…but…we’ll get to that later.
Surely you’ve heard of “Storage Wars”?—the popular reality tv show on A&E. Auctioning storage locker contents is the premise of the entire show. And, of course, being reality tv, there is suspense and excitement—and a few tense arguments thrown in for good measure.
That brings us to the lawsuit recently filed by “Storage Wars” former star buyer, Dave Hester (aka “the mogul”). His lawsuit was originally filed in December, 2012, against A&E, claiming that the production company actually staged many of the auctions with goods that were not originally in the featured storage lockers. Basically, he claimed that A&E planted more valuable goods into the featured lockers in order to falsely drum up excitement (and, therefore, more viewers) for the program.
That lawsuit was eventually thrown out, with the judge deeming what A&E chooses to highlight on the show a matter of free speech.
Ahh, but the story, and the lawsuit, doesn’t end there. Hester was let go. According to a report over at The Wrap, Hester’s got a retooled lawsuit and is now arguing wrongful termination, alleging he was fired over his claims that the show was rigged.
The outcome of Hester’s lawsuit remains to be seen. But rigged locker contents or not, the lawsuit has put focus on the practice of storage locker auctions—and wrongful auctions—in general: what are they and why do they happen? “Storage Wars” makes storage locker auctions seem like some unclaimed freight or abandoned merchandise sale. Unfortunately, for some, that’s not quite how things happen—they haven’t quite abandoned their stuff; they simply can’t (or don’t) make the rent payments. And in some instances, the storage facility has simply auctioned off the wrong person’s stuff. Yes, it’s happened…
Example: Dubey v. Public Storage. Here’s an excerpt from court documents on that one:
“Kitchen [former storage facility property manager] told Dubey that her property had been auctioned off. She told Dubey that her rent had not been paid and that Metropublic records showed that there was $191 in past-due rent for unit E-11. However, unit E-11 was rented to someone by the name of Maria Cruz, and Dubey’s rental agreement showed that her unit was C-10. Cruz’s rental agreement had a computer-generated designation of unit number E-12. Such unit number had been scratched out and next to it, handwritten, was the number E-11.”
In Dubey’s case, she showed up at her rental storage locker one day to find it inaccessible. When the operator opened it, it was empty—except for some remaining debris, remnants of Dubey’s belongings. Needless to say, Dubey was a bit taken back and things wound up in court.
In fairness, if a self-storage facility plays by the rules, they do have a contractual right to move to an auction. But, the key is they have to play by the rules. The “rules” in this case, are state lien laws.
Lien laws regulate all aspects of when and how storage unit contents can be auctioned. They cover everything from when a storage operator can replace the lock on a unit, to how a renter is sent default notices, to how long the renter has to ‘make good’ on his payments, to how and when the operator can publish an advertisement for an auction.
For example, recently new legislation went into effect in Nevada regarding how a storage facility operator must notify a tenant about being in default. Nevada self-storage facility operators may now notify tenants about impending lien procedures by email, as well as assess late fees and deny access to tenants in default after 10 days. If there is no confirmation of the email, a second notice must be sent by verified mail to the last known address of the tenant.
While there are many legitimate storage auctions, some are not. There are rules to be played by and operators need to follow those rules before they auction off storage locker contents. And if you’ve got stuff in storage, it’s worth it to not only read your contract closely, but also check out your state’s self-storage lien laws; you can do that online.
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I can assure readers that most (99.9 percentile) of storage facilities are very aware of lien laws, and conduct auctions accordingly. The fact that a few, out virtually thousands of auctions have resulted in a law suit, should not deter people from storing their goods.
While I agree with this article that prospective renters should read their lease agreement carefully, I think this article was slanted to misrepresent a very legitimate, very needed storage industry.
As long as a customer is given information to be able to form a wellthoughtthrough decision anyone can do business with the customer within the confines of the law. But they have to be obligated to provide this information adequately.
Customer under special circumstances should be able to redeal with supplier to be able to have a chanse, or be able to pick up things of clear emotional value and not material if provider has the right to auction.
Making money on people who are forced to place their belongings in storage for a while need to be a fair deal. This is everyones responsibility .
I’m going to read these contracts and continue this comment.
STORAGE WARS
MY NAME IS MARK SHORT. I LIKE THIS SHOW THANK YOU
I HAD A STROKE 2 YOURS AGO I CAN NOT MOVE MY RIGHT SIDE.
NOW ME AND MY BROTHER BUY STORAGE UNITS. I AM IN MY ELECTRIC WHEEL CHAIR (IT’S FUNNY) I DART IN AND OUT TO GET THROUGH THE CROWDS OF PEOPLE. THEY SEE A POOR MAN IN A WHEEL CHAIR I GET GOOD PRICES AND GO HOME A WINNER. BOY I AM FUNNY I HAVE A GOOD SINCE OF HUMOR AND I CAN TALK GOOD.
IT WOULD BRING A NEW LOOK TO THE SHOW IT WOULD BE FUNNY
I WOULD LIKE TO BE ON YOUR SHOW AS A REGULAR.
THIS IS OUR STORE
Hi Mark, While we're happy you like the show, Storage Wars, and that you've been able to see the brighter side of things, we are not quite connected to the show and, therefore, don't hire talent for it or vet storylines. But thanks for your comment–it is a fun show to watch.
I think the one thing that needs to be addressed is that the owners of the storage places auction your things off for well more than what is owed on the storage and then continue to bill you for the unpaid storage fees with fees until paid. They make an untold killing on these units. You go 2 months behind they lock you out and sell your things for up to 25 times what is actually due on the unit and then still want you to pay the two months plus fees. It has put storage facility owners at an unfair advantage to want you to default as they benefit way more from the sale rather than the consumer fulfilling their contract. Can you say conflict of interest.
Don't know where you got your information from but it is incorrect. The proceeds from the auction for a particular unit go to pay the outstanding balance of that unit. In some states if the auction amount does not satisfy the outstanding balance, then the storage operator may try to collect the balance via other means such as a credit collector. Also in some states if you receive more from the auction then what is owed you have to pay that overage to the customer. Getting up to 25 times what is actually due only happens on the TV show, not in real life. I do own a mini-storage site and even though we try everything possible to avoid auctions we have had them. I have never received what was owed from an auction.
And do you inform your customers about the clauses in your contract?
And by the way. How to you cover the loss on customers that don’t pay what is owed when all claused means are exhausted. Seems unfair to be obliged to pay the surplus in an auction to a customer. I mean, if your not doing business, it’s either bad, or your doing it wrong. Which state has that rule?
I know that due to these shows, and this country being capitalist and for profit to begin with….property laws are being diluted by the decade. Used to be the state held on to abandoned property and had to publish notices. Now private companies due to lien laws can simply sell the property, many times without try notification to the owners of an impending sale, and pocket the profits. Yes, the auctioneer needs to be paid, but many times there are shell buyers at those auctions also and the auctioneer has his side business of conducting his own personal auctions then thereafter.
Seems you have some experience?
What did the contract state? And did the facility assure that you as a customer understood the rules of the contract?
The killing you claim they are making; is the cost of unitrent very low compared to volumspace -rent-cost in the area I would suspect, as a customer that the provider basically made money souly on default of units. My big question is whether or not the facility made that clear.
In a way one might say F#$& the law, it’s mostly about what is fair. The deal can be cheap rent – high risk or higher rent and lower risk. If someone saves or makes money on that. It seems fair. And I would also say it’s fair to claim rent according to contract for the defaulted period until unit is sold, or otherwise paid for. Or the minimum rent period.
But the customer should know what the deal is before signing. The provider should make sure of that.
And that is fair.
Its a scam, and state laws support most of this and now we've got A&E upping the ante with their show about these units that have thousands of dollars worth of items in them. If there were thousands of dollars worth of items in there, don't you think the owners would have had money to pay those storage fees to begin with? I mean, really. What happens is that those units costs keep escalating (my unit rent fees on a $45.00 rental went up to $56.00 in less than 2 years, 15% increase annually). All they need to do is increase those rents until eventually the owners can't pay them, I'd pay someone to store my things in their garage, you are much safer now that "Storage Wars" is the thought mentality of this "industry."
The fees collected from the auction go to pay for the outstanding balance, the difference is supposed to be sent to the owner of the auctioned items, at least in Ohio that's the case.
What many do not realize is that the storage companies remove your lock and add theirs. Do you not think when they pop your lock they are not looking at your items before the auction? You don’t think the guy making minimum wage is not getting an unfair advantage or flat out stealing from the unit?
YES, THEY ARE STEALING FROM THE UNIT UP FOR AUCTION, THEY TAKE OUT WHAT THEY WANT,AND LEAVE TRASH, SO YOU GET STUCK PAYING TOP DOLLAR FOR NOTHING, YES THIS IS WRONG, I CALL LOTS OF PEOPLE TO SEE WHAT WE COULD DO, I NEVER GOT ANY ANSWERS, I WAS THINK OF CALL IN ACTION NEWS, TELL THEM WHATS GOING ON, MAY JIM DONIVAN 3 ON YOUR SIDE CAN DO SOMETHING, DON’T WANT TO BE KNOWN, BUT SOMEBODY CAN DO IT,
FOR TRASH, CALL ACTION NEWS, JIM DONIVAN 3 ON YOUR SIDE, MAY BE HE CAN HELP US, MAKE YOUR SELF NOT KNOWN JUST TRY IT, THES PEOPLE WHOWORK IN THE STORAGE, NEEDS TO BE TAUGHT A LESSON ABOUT STEALING.
Why doesn’t someone force self-storage operators to prove the increased cost amount represented in this statement: “Reluctantly, we must periodically adjust rates to offset the increasing costs for maintenance, taxes, insurance and utilities.”? This is fraud! They should be forced to operate like commercial landlords and divide these “increasing costs” by the total number of square feet of all units and then “offset” the increased costs on a per square foot rented basis (if they really exist). They raise my rent about 10% every year because they know that most people would rather pay the increase to avoid the hassle and cost to move. I think that a jury would call this a SCAM.
Class Action anyone?
My unit B -901 at the location above was Extremely infestated with RATS, mice stench and Vandalism. I was there for exactly 5 years. I had an Outside Unit which holds 3 rooms of Furniture, 30 boxes and 25 large bags. That unit was to the EXTREME LEVEL WITH RATS. I have 94 PICTURES AND ,40 text messages. No one has yet checked out that unit. They Harassed me over INSURANCE WHICH I find out was not necessary. I had INSURANCE for awhile. But the cost of that unit which started out with $346.00 per month and ESCALATE TO $540.00 per month plus another STORAGE UNIT it BECAME hard for me to continue paying INSURANCE. My daughter passed away, 6 weeks after she passed my other daughter was in the hospital for 10 months. The one who passed away was in the hospital for 19 months. I had EXTREME ANXIETY plus Very High Blood Pressure. Public Storage still was paid every single month. Check out my Profile and THOSE HORRIBLE PICTURES on Google Plus. I had to sift through what I could SALVAGE. But MOST OF MY BELONGINGS had to be Discarded. I HAVE NO Furniture AND MY BELONGINGS other than furniture is RATTED AWAY. I also have s 4 page letter from the Health Department ABOUT THEIR FINDINGS AT PUBLIC STORAGE. Rats. FRESH RODENT DROPPINGS ,Urine and garbage in THAT AREA . Again, 1250 Rockaway Avenue Brooklyn NY 11236. They gave them 5 business days to CLEAN UP or face a lien on their property. I HAVE PROOF OF THAT.