MD Lien Law and Storage Auctions
There are a lot of questions and maybe some confusion that surround the self storage lien law and the auction process. We are here to help you understand the complete process so you never have to worry about either when it comes to your self storage unit. The last thing we want to have happen is to auction off your storage unit. Follow these simple guidelines and you can prevent an auction from happening to you.
MD Lien Law
First of all, we never want to auction off a unit, for any reason. A storage facility will only auction the contents of storage unit if the owner fails to pay their rent for an extended period of time. If we aren’t getting any rent, then we must contain our losses and free up a unit so we may rent it to a new tenant. We never profit from any auction. All proceeds go first to pay back rent and fees, then the balance goes to the tenant.
In the state of Maryland, the lien law allows self storage operators to place a lien on the stored contents of a unit once the rent has become a full 30 days past due. Operators and property managers will make multiple attempts to contact a tenant who remains in past due status, prior to a lien being placed on the storage unit. At least four phone calls and emails are initiated from the contact information on file. If the property manager cannot reach the tenant through these attempts, he or she may contact the alternate person listed on the account as a next step. We send several paper notices – at fifteen and thirty days past due – in an attempt to bring the account current and prevent a lien on the unit. If the tenant provided an email address to the manager, these notices will be forwarded in an email as well.
In Maryland, when an account becomes a full 15 days past due the unit is over-locked, and at 30 days past due a lien is placed on the stored contents. Once the account becomes 30 days past due, operators are required to send a notice of this lien to the tenant via USPS certified mail and regular mail at the last known address on file. The lien notice informs the tenant of the past due status, provides the total amount due to bring the account current and lists the scheduled auction date.
Late fees and the subsequent auction of storage contents are not contingent upon the tenant receiving the notices that have been sent. Tenants are responsible for keeping their account current as contact information changes. We send these notices to the last known address on file, so it is important to notify us when something has changed – such as phone, address and email – to ensure we can reach you.
Storage facilities are required by the lien law to advertise the sale of each individual unit publicly. This advertisement will appear at least 3 days prior to the scheduled sale. We run these ads in a publication of general circulation, like the Carroll County Times, for any auctions we have scheduled each month.
Tenants are able, and encouraged, to make their payments at any time up until the moment the auction begins. If full payment of the past due rent and fees has been made by the tenant prior to the auction, the sale of that unit is cancelled, all ownership of the contents is restored immediately to the tenant and the over-lock is removed.
Storage auctions are held once per month at 140 Mini Self Storage. All storage auctions are open to the public. However, employees of 140 Mini Storage and their immediate families are not permitted to participate in the auctions. The auctioneer will open the unit so attendees can examine the contents. Attendees are not permitted, at any point before or during the sale, to enter the unit or touch any items inside the unit.
The auctioneer will begin the sale with a minimum bid. Attendees are bidding on all the contents inside the unit, not individual items. Just like any other auction, the sale is closed by the auctioneer to the highest bidder. Payment is taken, in cash or credit card, and applied to the auctioned account. If the auction brings in an amount greater than the balance due, the overage will be sent to the tenant. If we cannot locate the tenant to refund the proceeds, we send the proceeds to the unclaimed property division of the Maryland state government. 140 Mini Storage only retains the original debt of the tenant.
Keep in mind that storage facilities never want to auction the contents of a unit. Storage operators and property managers are not the enemy in these unfortunate situations. You can avoid an auction for your self storage unit if you abide by the terms of your rental agreement and make your payments when they are due. If you end up in this situation where an auction is eminent, you can contact your property manager to discuss your account and arrange for payment to avoid an auction sale.