Abandoned Isn't Abandoned

By Richard Marmor, Esq.
AZSA Legal & Legislative Chair 

A recent call has made me reconsider my position on an issue. (It’s nice to know that in my old age I can still do that . . . despite what my wife says.) 

Here were the facts: A homeowner rented out his house to a person who later vanished leaving furniture and other contents behind. The homeowner removed all of the person’s things, and rented a storage space in which to stash them.*  Of course, after a month the homeowner didn’t want to continue to pay the storage rent any longer, so he signed an abandonment form surrendering the contents to the storage operator. The question she asked me was, “Since it was abandoned, can I just sell this stuff?” 

This situation was a bit unique in that we actually know for a fact that the tenant doesn’t own the contents of his storage unit. The question I found myself asking was not Can you sell the contents?  but Could the tenant abandon them?  

The tenant isn’t the owner of the property, so he has no ownership to abandon. Therefore, the storage operator could not become the next owner. Thus the storage operator is not free to do as she pleases with the space’s contents. She can’t “just sell them.” 

I then began to consider the larger self-storage picture. We operate under the presumption that our tenants own the property stored in their units, but the truth is that we actually have no idea who owns anything stored at our facilities.**  What’s more, it’s not at all unusual for third parties’ things to be stored in our tenants’ spaces. That’s why our lien law grants us a lien on “all personal property stored in the leased space.” The law does not limit our lien to tenant’s property stored in the leased space. 

Therefore, whenever any tenant signs a paper abandoning the contents of their unit, there is no way for a storage operator to know whether (s)he actually becomes the owner of those contents. If the storage operator treats those contents as abandoned, i.e., as his/her own, and keeps them, disposes of them or simply sells them, if it turns out that the tenant wasn’t in fact the true owner of the property, that storage operator could then be liable for the full value of the property to its true owner! 

It Gets Worse 

So in the caller’s case, if the homeowner did not have an ownership interest in the contents to abandon, what did he give up when he signed the form? He could only abandon as much as he had, which was mere possession, i.e., custody. If the storage operator accepts the abandonment, then she would be accepting only custody of and control over the contents. That would make her a bailee of that property. You all know that the last thing you ever want to be is a bailee over any of your occupants’ property, because that makes you responsible for it and liable for any loss or damage to it. 

The Safe Alternative 

So what should the storage operator do? There is one truly safe answer: when the rent is in arrears, foreclose the lien and auction the contents. The law protects the operator, provided all of the rules of the process are followed, so be sure to send out all the requisite notices. 

No More Abandonments 

Since we can never be certain that any tenant offering to abandon contents has any ownership interest to abandon, in order to avoid becoming liable to the contents’ true owner for the full value of the property, prudence suggests that we treat all contents as not owned by our tenants. Therefore, as a practical matter, we can never accept an offer of abandonment from a tenant. 

To that end, we removed the “Election To Abandon Property” form from the AZSA website.  

If one of your tenants offers to abandon contents and you’re willing to let them off the hook, tell them that you cannot accept an abandonment, and that you have no option but to sell the contents at auction. But, under the circumstances, although you are required to send them pre-auction notices, you will not otherwise bother them further. 

*This storage operator was smart enough to insist that the homeowner be named as the tenant. Never rent space in the name of someone who doesn’t sign the lease! 

**That’s true even for those of you who rent vehicle storage space and demand a copy of the vehicles’ titles. An hour after you get the copy of a title, the owner could transfer ownership to someone else and you wouldn’t know it. 

[This article deals with a law related subject at a general level and is not intended for you to rely on. You should consult a lawyer before making a final decision in a situation involving any legal issues.]  

Richard Marmor, Esq. is a self-storage consultant, facility owner and former facility operator in the Phoenix area.  He is also the founding President and current member of the Board of Directors of the Arizona Self-Storage Association, serving as Chair of the Legal and Legislative Committee.  

Source: Behind Closed Doors, AZSA Newsletter Archives