I Can’t Pay For My Self Storage Unit Anymore — What’s Next?

We know that self storage helps you relocate, downsize, declutter and get organized. And people do indeed put all sorts of things in self storage. You’ve probably also seen TV shows featuring all sorts of treasures that people stumble upon in auctioned storage units. But how do you stop your unit from ending up on Storage Wars? In other words, what happens when you can’t pay for your space anymore? What if you simply forgot to pay your bill? Can the facility empty your space or auction off its contents right away?

If these questions are on your mind — or even just in the back of your mind — we’re here to tell you what can happen and how you can best handle the situation.

This is how the self storage payment system works

When renting your self storage unit, you acknowledge that you have to pay the agreed fees. Thus, if you fail to meet these payments, your unit’s storage facility has a “right of lien” over everything in it. A right of lien gives the facility the right to hold on to the contents of the storage space until the debt is repaid by the renter. In case this debt is not paid in due time, the facility can sell those contents in order to recover said debt. This does not happen right away, don’t worry. There is an entire process that needs to take place before they sell your items.

Does all this make sense? Yes, in fact it does! Seeing that your items are still in the same spot, but you are not paying for the service, the storage facility is actively losing money because they cannot rent the space to someone else. What you should know, before anything else is that the lease you signed when renting your space should clearly explain what happens in the case of delayed payments. Your unit will go into default once you reach the maximum number of days you can go without paying rent (the facility should state the point of default clearly in the lease, but it is usually 30 days).

Once that 31st day comes, the property manager will typically replace your lock with a red one, locking you out of your own space. The special lock is usually accompanied by a letter informing you of the current situation. You are not allowed, under any circumstances, to enter your storage space from that point onward.

What happens next? The three main steps – Contact, default and auction

If you’re in trouble, you can bet that you’ll find out about it. The storage facility will try its hardest to contact you before auctioning your items because it’s not necessarily in their interest to auction them. Holding such auctions is not always profitable, and it’s very complex, legally speaking. You’re not the only one who’s stressed about missing your monthly rent! In fact, when you get that phone call or e-mail saying you’re late with your payment, the storage facility is not only doing it because it’s a legal necessity. Rather, they’re willing to collaborate with you so that it turns out well for everybody involved. What you can do is make sure that your contact information is always up to date. If it is, the facility will do everything to contact you, inform you about the problem and work out a solution with you.

Another aspect that is often misunderstood is that you will not have time to deal with the issue before the facility must auction off your space. In order to get the precise number of days until the auction, you should check the lien laws of your state. The typical number is somewhere between 30 and 90 days. This time span between default and auction is absolutely vital — you will get letters that you need to respond to. Talk to the business you’re dealing with, as they may be willing to help you come up with a solution, such as a payment plan, discounted rent or other sorts of deals.

The auction won’t take place overnight. There are certain requirements that the storage company must meet, and these include informing you by means of a certified letter and making public when and where the auction will take place. There’s no point in attending the auction yourself or having someone there on your behalf. Most facilities will place you in contact with the buyer so that you can get some personal belongings back if you really want to and the buyer agrees.

Continuing down the path of worst-case scenarios, the facility might not get enough money to cover your debt by auctioning your space, and that is another issue. In case you’re unable to pay the remaining amount, it will affect your credit score, meaning you’ll have a harder time next time your rent an apartment, buy a home or sign up for insurance.

This is what you can do to make things better before losing your unit

• Be sure to read the lease thoroughly and double-check the fine print in your contract.
• Plan ahead of time and don’t let it get to payment arrears. Think about what you need to store and how you’re going to cover the monthly cost.
• Update your contact information and know your state’s lien laws.
• Hiding from the problem will make it worse. Communicate with the storage facility in order to explain yourself and possibly come up with a solution to avoid an auction.
• You can approach the facility first, before things get out of hand. Don’t let it get to auctioning, since you’ll lose access to all your possessions.
• Consider moving to a smaller unit. Most facilities are flexible in this sense, so throw out some of your belongings and change the size of your unit.
• Find a self storage unit at a different facility and vacate your space at the earliest opportunity. Prices vary according to amenities and location, not just unit size — you might find a cheaper option somewhere else.
• If you do ultimately lose your unit, get in touch with the buyer so that you can try to get personal items back, such as legal documents, photos, tax documents, etc.
• Address the issue before it affects your credit score. Don’t let the matter get that bad.

Defaulting on a payment is not ideal, but it can happen. Life gets in the way sometimes, and whether it’s because of a major event, a big life transition or other financial reasons, being unable to pay for your storage unit rental is more common than you can imagine. Don’t despair. Don’t try to fight the problem by ignoring it and address the issue right away, if possible. It is true that you’re dealing with a business, but you’re ultimately talking to people. It’s in everybody’s interest for you not to lose your unit!