What Happens When RV/Boat/Vehicle Storage Renters Don’t Pay Their Rent?
If the tenant fails to pay their rent, this puts them in default. How long it’ll take for your unit to be in default will depend on the lease you sign when you first rent your storage space — so be sure to pay attention to the fine print. After your unit is in default, the facility owner has the legal right to sell whatever is in the unit — including any vehicles, boats or RVs. But first, they must perform a background check to determine two things:
- Does the vehicle have any outstanding liens on it?
- Is the registered owner someone other than the tenant?
If a high-ticket item, like a Porsche or Ferrari, is left behind and the tenant hasn’t paid rent, chances are something is amiss. The tenant may have died or the car may have been stolen. The storage operator may do some digging to find out why these belongings were left behind before rushing to auction off the asset.
When a tenant fails to pay rent and their unit is in default, facility owners will secure the storage unit with multiple locks to prevent the tenant from accessing its contents. The contents will then be sold through an auction. However, some storage operators do not want to go this route because they can be less profitable in some cases. Private auctions can cost the facility a lot of money and can be difficult to organize. Meanwhile, the laws against liens vary from province to province and must be taken very seriously. If owners fail to do their due diligence, they could end up in small claims court if the tenant finds a loophole down the line.
When storage operators call customers to let them know they’re in default, they are genuinely trying to find a compromise — missed payments are just as stressful for the operator as they are for the tenant.
There is usually a standard period of time between going into default and going to auction; this period is typically 30-90 days. In areas where storage units are in high demand, it will be in the operator’s best interest to sell off the assets sooner rather than later. The end goal is for the facility to recoup the amount of money owed by the tenant, so they will want to get the best price possible for that vehicle.
Once a buyer for the car, boat or RV is in place, paperwork will be completed for the new owner to obtain the proper title.
There are instances in which tenants will try to sue the self-storage company for a bad sale. However, if a tenant is in default, the storage operator has every right to get rid of the unit’s contents. The business will most likely keep all foreclosure documents for at least five years to defend themselves against actions that may arise down the line.
Operator Can’t Sell It & Doesn’t Want It
Selling a vehicle, boat or RV can be very difficult. It takes a certain buyer to make a big purchase like this, so it’s no surprise that operators sometimes have a hard time offloading these items. If the storage company is still in contact with the tenant, they may ask him to sign an agreement to release the item. This will allow the operator to get rid of it.
However, things aren’t usually this simple. When tenants default on rent, they’ve often disappeared and are difficult to get a hold of. Operators can then choose to file an eviction. This means the tenant gets formally evicted from the storage space, and the court directs police to dispose of its contents. Although this is the more time-consuming option, the operator has protected themselves by using a court order to get rid of the vehicle.
For more information about self-storage units, call Real Storage at 1-519-341-1803 or find a location near you.