Delinquent Tenant's Contents Gone - A Police Matter?
By Richard Marmor, Esq.
AZSA Legal & Legislative Chair
A recent caller had a tenant that was several months in arrears. Naturally the unit was over-locked. Later, they discovered that the contents of the unit were no longer there. The tenant had somehow managed to secret them out of the facility. Should the operator report the taking to the police? Was this a theft?
In a word, no. This was neither a theft nor a matter for the police.
Consider automobile repossessions for a moment. We have all seen examples in the movies and maybe even at our sites. Suppose you finance the purchase of a car, and later default on the payments. The bank has a lien on the car, a claim against it, but it’s still your car. Subject to some rules, they have the right to seize it and sell it in order to get their loan repaid. Now suppose you know that the bank’s repo man is looking for the car, so you hide it. You park it in your neighbor’s garage instead of your own. Have you stolen the car? Of course not. You have merely frustrated the bank’s self-help remedy.
Our storage situation is identical. We have a lease with our tenant. In the event of a default under that lease, the law grants us a claim, a lien, against the property, but it is still the tenant’s property. The law grants us a further right, subject to some rules, to seize the property and sell it to try to get ourselves paid. In other words, our lien sale process is in the nature of a remedy at law for a breach of the lease.
It should be noted that lien foreclosure and sale is only one remedy available to us. Since the lease is a contract, a default under the lease is a breach of contract. We can always go to court and sue the tenant for the amount owed. We can also go to court and seek an eviction, called a “forcible detainer.” We can report the delinquency to the credit bureaus. We elect the lien foreclosure process most of the time because it is the fastest and the least expensive of the remedies.
In fact, we can resort to more than one of those remedies. Suppose the tenant owes a lot of money, say $1000. The sale of his junk brings in $400. What about the remaining $600? Was that debt somehow forgiven? No. You’re still owed that money. You are entitled to resort to one or more of the other remedies to try and collect the remaining balance.
So let’s come back to the unit with the missing contents. In effect all that’s happened is that the tenant has hidden the contents from you. Like the fellow who hid his car from the repo man, he has effectively frustrated your use of one of your remedies. That’s not a crime.
So what should you do? It depends. Going to court, unless it’s small claims court, can be expensive. Thus if the amount owed is relatively small, the best thing would be to forget about it, be glad you got your unit back and go on with life. If the amount owed is large, then perhaps it’s worth going to court, etc.
Always keep in mind the reality that our auctions are not about money. Even today, with hoards attending our sales, we rarely collect what is actually owed. Our auctions are really about getting our units back so we can rent to people who do pay their bills. What’s more, lien sales are our biggest exposure to liability. It’s best to avoid them whenever the option presents itself. By taking his things, the tenant just may have done you a favor.
[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