TV: Your Auctions on TV?

By Richard Marmor
AZSA Legal and Legislative Committee Chair

It has come to our attention that some members have been solicited by television production com­panies for participation in reality TV shows featuring auctions at self-storage facilities in Arizona.

AZSA strongly recommends against participation by members in such productions.

The reasons are many, among them:

• Your single greatest exposure to liability and lawsuit arises from sale and foreclosure activities. Film­ing of auctions only exposes you to additional scrutiny over the handling of your auctions and of your customer’s property, preserving on film information or activity that potentially could be used against you in a subsequent lawsuit. Worse, it could suggest the opportunity for lawsuit where none may have arisen before.

In the two most notable cases in Arizona in recent years in which contents of true value were sold at auction, both operators ended up in litigation brought by tenants seeking damages from the storage operator and to recover the lost property.

• The TV shows portray the self-storage business in a negative light. They elevate one small aspect of the business to a misleading and alarming level of importance, with grave potential consequences.

Some members have already reported receiving questions from potential renters who are fearful about storing their property. While the fear of auction may be somewhat helpful in increasing collections from existing tenants, the loss of potential renters far outweighs any such benefit.

Legislators watch TV, too. The shows seed the idea that the storage business is really about sell­ing people’s property. Worse, given the dollar values appearing in such shows, they also imply that such auctions are a source of profit to storage facilities, thereby suggesting that storage operators have a motive to sell customers’ property that goes beyond the concept of a remedy for non-payment. Given such misperceptions, it is a small step from there for legislators to feel the need to protect the public by introducing laws regulating the industry.

• The TV shows give the public a very misleading idea about the quantity and quality of property to be found in defaulted storage units. And while that has led to a big jump in auction attendance and bidding, once again, that is outweighed by the negatives.

Reports have already surfaced of people jumping into the bidding in the false expectation of find­ing “treasures,” only to discover that treasures are the stuff of TV. The negative public relations from that are already being felt.

The TV shows raise false get-rich-quick expectations from storage auctions. We would not want to exper­ience retaliation against storage operators from disenchanted buyers.

Yet again legislators are given a false impression, that we are the stewards over valuables be­yond all reality.

Thieves are given an incentive to target self-storages to seek out the “treasures” to be found there, and to use auctions as opportunities to scout for targets.

• The TV shows expose the presence of large amounts of cash surrounding storage auctions. The in­creased threat to cash-carrying buyers and to operators following auctions is not worth the pub­lic attention.

AZSA and its members welcome public interest and participation in storage auctions. The storage operator’s duty to conduct com­mercially reasonable sales, seeking the fair market value of contents, after all efforts to work with delinquent tenants have failed, is made easier by the public’s participation. However, that participation, and the public perception of the industry should be grounded in reality, not reality TV. Members are therefore urged not to risk involvement with televised auctions.

[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