Texas Storage Auction Laws

    PROPERTY CODE

CHAPTER 59. SELF-SERVICE STORAGE FACILITY LIENS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 59.001. DEFINITIONS. In this chapter:

(1) "Lessor" means an owner, lessor, sublessor, or managing agent of a self-service storage facility.

(2) "Rental agreement" means a written or oral agreement that establishes or modifies the terms of use of a self-service storage facility.

(3) "Self-service storage facility" means real property that is rented to be used exclusively for storage of property and is cared for and controlled by the tenant.

(4) "Tenant" means a person entitled under a rental agreement to the exclusive use of storage space at a self-service storage facility.

Acts 1983, 68th Leg., p. 3574, ch. 576, Sec. 1, eff. Jan. 1, 1984.

Sec. 59.002. APPLICABILITY. This chapter applies to a self-service storage facility rental agreement that is entered into, extended, or renewed after September 1, 1981.

Acts 1983, 68th Leg., p. 3574, ch. 576, Sec. 1, eff. Jan. 1, 1984.

Sec. 59.003. APPLICABILITY OF OTHER STATUTES. (a) Subchapter B, Chapter 54, does not apply to a self-service storage facility.

(b) Unless a lessor issues a warehouse receipt, bill of lading, or other document of title relating to property stored at the facility, the following statutes do not apply to a self-service storage facility:

(1) Chapter 7, Business & Commerce Code, as amended; and

(2) Chapter 14, Agriculture Code.

Acts 1983, 68th Leg., p. 3575, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 2001, 77th Leg., ch. 1124, Sec. 3, eff. Sept. 1, 2001.

Sec. 59.004. VARIATION BY AGREEMENT AND WAIVER. Except as expressly provided by this chapter, a lessor or tenant may not vary the provisions of this chapter by agreement or waive rights conferred by this chapter.

Acts 1983, 68th Leg., p. 3575, ch. 576, Sec. 1, eff. Jan. 1, 1984.

Sec. 59.005. DAMAGES FOR VIOLATION. A person injured by a violation of this chapter may sue for damages under the Deceptive Trade Practices--Consumer Protection Act (Subchapter E, Chapter 17, Business & Commerce Code).

Acts 1983, 68th Leg., p. 3575, ch. 576, Sec. 1, eff. Jan. 1, 1984.

Sec. 59.006. ATTACHMENT AND PRIORITY OF LIEN. A lien under this chapter attaches on the date the tenant places the property at the self-service storage facility. The lien takes priority over all other liens on the same property.

Acts 1983, 68th Leg., p. 3575, ch. 576, Sec. 1, eff. Jan. 1, 1984.

Sec. 59.007. PURCHASE OF PROPERTY. A good faith purchaser of property sold to satisfy a lien under this chapter takes the property free of a claim by a person against whom the lien was valid, regardless of whether the lessor has complied with this chapter.

Acts 1983, 68th Leg., p. 3575, ch. 576, Sec. 1, eff. Jan. 1, 1984.

Sec. 59.008. REDEMPTION. A tenant may redeem property seized under a judicial order or a contractual landlord's lien prior to its sale or other disposition by paying the lessor the amount of the lien and the lessor's reasonable expenses incurred under this chapter.

Acts 1983, 68th Leg., p. 3575, ch. 576, Sec. 1, eff. Jan. 1, 1984.

Sec. 59.009. RESIDENTIAL USE. A tenant may not use or allow the use of a self-service storage facility as a residence.

Acts 1983, 68th Leg., p. 3576, ch. 576, Sec. 1, eff. Jan. 1, 1984.

SUBCHAPTER B. LIEN

Sec. 59.021. LIEN; PROPERTY ATTACHED. A lessor has a lien on all property in a self-service storage facility for the payment of charges that are due and unpaid by the tenant.

Acts 1983, 68th Leg., p. 3576, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 1985, 69th Leg., ch. 117, Sec. 12(a), eff. Sept. 1, 1985.

SUBCHAPTER C. ENFORCEMENT OF LIEN

Sec. 59.041. ENFORCEMENT OF LIEN. (a) Except as provided by Subsection (b) of this section, a lessor may enforce a lien under this chapter only under a judgment by a court of competent jurisdiction that forecloses the lien and orders the sale of the property to which it is attached.

(b) A lessor may enforce a lien under this chapter by seizing and selling the property to which the lien is attached if:

(1) the seizure and sale are made under the terms of a contractual landlord's lien as underlined or printed in conspicuous bold print in a written rental agreement between the lessor and tenant; and

(2) the seizure and sale are made in accordance with this chapter.

Acts 1983, 68th Leg., p. 3576, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 1985, 69th Leg., ch. 117, Sec. 12(c), eff. Sept. 1, 1985.

Sec. 59.042. PROCEDURE FOR SEIZURE AND SALE. (a) A lessor who wishes to enforce a contractual landlord's lien by seizing and selling or otherwise disposing of the property to which it is attached must deliver written notice of the claim to the tenant.

(b) If the tenant fails to satisfy the claim before the 15th day after the day that the notice is delivered, the lessor must publish or post notices advertising the sale as provided by this subchapter.

(c) If notice is by publication, the lessor may not sell the property until the 15th day after the day that the first notice is published. If notice is by posting, the lessor may sell the property after the 10th day after the day that the notices are posted.

Acts 1983, 68th Leg., p. 3576, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 18, Sec. 5, eff. Oct. 2, 1984; Acts 1985, 69th Leg., ch. 117, Sec. 12(d), eff. Sept. 1, 1985.

Sec. 59.043. CONTENTS AND DELIVERY OF NOTICE OF CLAIM. (a) The lessor's notice to the tenant of the claim must contain:

(1) an itemized account of the claim;

(2) the name, address, and telephone number of the lessor or the lessor's agent;

(3) a statement that the contents of the self-service storage facility have been seized under the contractual landlord's lien; and

(4) a statement that if the claim is not satisfied before the 15th day after the day that the notice is delivered, the property may be sold at public auction.

(b) The lessor must deliver the notice in person or by certified mail to the tenant's last known address as stated in the rental agreement or in a written notice from the tenant to the lessor furnished after the execution of the rental agreement. Notice by mail is considered delivered when the notice, properly addressed with postage prepaid, is deposited with the United States Postal Service.

Acts 1983, 68th Leg., p. 3577, ch. 576, Sec. 1, eff. Jan. 1, 1984.

Sec. 59.044. NOTICE OF SALE. (a) The notice advertising the sale must contain:

(1) a general description of the property;

(2) a statement that the property is being sold to satisfy a landlord's lien;

(3) the tenant's name;

(4) the address of the self-service storage facility; and

(5) the time, place, and terms of the sale.

(b) The lessor must publish the notice once in each of two consecutive weeks in a newspaper of general circulation in the county in which the self-service storage facility is located. If there is not a newspaper of general circulation in the county, the lessor may instead post a copy of the notice at the self-service storage facility and at least five other conspicuous locations near the facility.

Acts 1983, 68th Leg., p. 3577, ch. 576, Sec. 1, eff. Jan. 1, 1984.

Sec. 59.045. CONDUCT OF SALE. A sale under this subchapter must be a public sale at the self-service storage facility or a reasonably near public place. The lessor must conduct the sale according to the terms specified in the notice advertising the sale and sell the property to the highest bidder.

Acts 1983, 68th Leg., p. 3578, ch. 576, Sec. 1, eff. Jan. 1, 1984.

Sec. 59.046. EXCESS PROCEEDS OF SALE. If the proceeds of a sale under this subchapter are greater than the amount of the lien and the reasonable expenses of the sale, the lessor shall deliver written notice of the excess to the tenant's last known address as stated in the rental agreement or in a written notice from the tenant to the lessor furnished after the execution of the rental agreement. The lessor shall retain the excess and deliver it to the tenant if the tenant requests it before two years after the date of the sale. If the tenant does not request the excess before two years after the date of the sale, the lessor owns the excess.

Acts 1983, 68th Leg., p. 3578, ch. 576, Sec. 1, eff. Jan. 1, 1984.

Sec. 59.047. ADDITIONAL PROCEDURES FOR SALE OF CERTAIN PROPERTY. A holder of a lien under this chapter on a motor vehicle subject to Chapter 501, Transportation Code, or on a motorboat, vessel, or outboard motor for which a certificate of title is required under Subchapter B, Chapter 31, Parks and Wildlife Code, may follow the procedures prescribed by Section 70.006 in addition to the procedures prescribed by this chapter.

Added by Acts 1999, 76th Leg., ch. 70, Sec. 1, eff. Sept. 1, 1999.

I just read the following legal notice:

Legal Notice of Public Sale
To be held at:
StorageBattles.com
In accordance with the
provisions of M.G.L.,  - (Massachusetts Storage Lien Law)
Chapter 105-A, American
Mini Storage will hold
a public auction online
at StorageBattles.com of
delinquent storage units to
satisfy operator’s lien.


The problem is, this storage facility is in Houston. Why are they having a lien sale under Massachusetts law you ask? This must be how the online storage auction sites are beating the system in states where the sale must be held at the storage facility. They operate out of Massachusetts where it's legal to have an online storage auction.

What do you think, is it legal?

The problem is, this storage facility is in Houston.

I couldn't find any listing for this auction in Houston.

I couldn't find any listing for this auction in Houston.

And that's exactly why buyers in Houston pay us to find the auctions for them. 

Here is another one in Austin. Different storage company. The strange thing is, in both legal notices, the storage facility didn't list their address.

NOTICE OF PUBLIC SALE To
be held at:w
ww.storagebattles.com
Spare Space Storage
Date: January 31, 2013
Begins at: 12:00 AM
In accordance with the provisions
of M.G.L., Chapter 105-A,
Spare Space Storage will hold
a public auction online at www.
storagebattles.com of delinquent
storage units to satisfy
operator’s lien.

State AG ?

Here is my question:

If a Texas storage facility has a online storage auction and the online auction company operates out of Massachusetts is the lien sale subject to Massachusetts law or Texas law? My instinct tells me the facility is still subject to Texas law.

My other questions is: which branch of the Texas government regulates and enforces proper lien sale procedures?

Yep, just found it. The storage facility is required to publish their address in the legal notice.

Sec. 59.044.  NOTICE OF SALE. (a) The notice advertising the sale must contain:

(1)  a general description of the property;

(2)  a statement that the property is being sold to satisfy a landlord's lien;

(3)  the tenant's name;

(4)  the address of the self-service storage facility; and

(5)  the time, place, and terms of the sale.


Apparently Storage battles is giving storage facilities horrible legal advice. They're actually encouraging the facility to substitute their address with StorageBattles' web address as seen in the following statement found on their website.

"Before you post online you have to make sure to follow the lien laws in your state as you do normally, the only difference is you must state the auction is being held online at ww.storagebattles.com (where you would normally have the facility's address) and you choose the end date of your choice."

I sent StorageBattles an email asking them what's up with having Texas storage facilities advertise legal notices subject to M.G.L.,  - (Massachusetts Storage Lien Law) Chapter 105-A. I'll post an update when and if I get a response. If I don't hear back from them, I'll file a complaint with the Texas Attorney General's office and let them work out the legality.

Well, I know that, and you know that but they continue to have lien sales online.

As usual, Storage Battles responded ambiguously to the email. It's going to take a lawsuit to get answers.

I went ahead and filed a "soft" complaint with the Texas Attorney General's office. I didn't really complain about them, I just explained the situation, quoted the law and asked if what they're doing is legal. A friend of mine at the TXSSA said that it will probably take a lawsuit before we ever have clarification.

Finally got a response from Storage Battles.

Travis:

You and I have spoken in the past about Sealedonline bids, Kevin Zorgny, and his
reasoning and thoughts about online auctions in Texas.  I am not sure if you
remember?  As you probably know, we have "merged" and consolidated under
StorageBattles.com in Scottsdale, AZ unitizing our personnel and infrastructure.

I would like to be able to speak to you sometime regarding our and our Attorneys
thoughts regarding the interpretation of Texas Statutes, as we are not looking to do
anything illegal or trying to be non-compliant.  That is not the type of company I
run.

I also would like the opportunity to publicize on you web site, as we do with other
site, only after you feel assured that we are in compliance.

We can do this via phone or email, whichever you prefer.

Best Regards,

Jim

James Grant
President/CEO
StorageBattles.com
7281 E. Earll Drive
Scottsdale, AZ. 85250


My response:

Jim,

I scan thousands of legal notices every month, so when I noticed two legal
notices without the facility address listed, I just thought I would bring
it to your attention. Don't think that I'm trying to "regulate" what your
doing, look at it more as friendly advice that could help your clients
avoid problems under Texas law.

A storage facility could use Massachusetts law if the the contract
originated in Massachusetts, the property was moved to Massachusetts or
possibly if your company/website was based out of Massachusetts. It's just
my opinion, but having storage facilities in other states use
Massachusetts law is sketchy at best. It would be like a doctor in Texas
writing prescriptions for medical Marijuana and claiming it's justifiable
under California law. Just my thoughts. I hope to hear more about this.

Respectfully,
Travis Lane
AuctionsTX.com
StorageAuctionForums.com


His response:

Travis:

Thanks for getting back to me again.  I don't think of you regulating, and I
appreciate all constructive criticisms that will make us a better, more productive
web site. 

This might be more information than you wanted, but I want to keep lines of
communication open between us.

Below are template examples of lien notices that go out to clients regarding the
auctions.  I do not see where you say that the location is not on the web site.
After reviewing what you sent, I think they are in compliance.  Could you please
elaborate where the location is missing?

As for you comments on the Texas statute, here are ours and our Attorney's thoughts
in order to be compliant and commercially reasonable sale.  We have different
requirements than Sealedonlinebids did. 

1.  All auctions that are posted on our site must have the storage location address
listed, as this is where the sales location transaction is to be done. 

2.  Our site has a visitor counter, and if at least 5 different bidders do not
review the listing, it will automatically cancel.

3.  The facility manager has the right to cancel the auction at any time if the unit
is cured.

4.  We send out at least 80,000 email notifications to potential bidders as well as
using sites similar to your to notify bidders.  Over 150,000 people will be notified
about this auction

5.  We are just a portal for auctions.  After the unit has been won, the buyer and
the seller are both notified via email.  They then coordinate the finalization of
the transaction that must be done at the facility.  The contents must be picked up
at the facility within 72 hours.  A sale in concluded when consideration is passed,
and then a sale is concluded.  All buyers must go to the facility and pay in cash
for their unit.  A cleaning deposit is posted on the unit listing, and upon cleaning
out the unit, it will be returned. 


From our Attorney:

Section 59.045 is entitled Conduct of Sale. That section states "A sale under this
subchapter must be a public sale at the self-service storage facility or a
reasonably near public place."

I understand that the nature of the question is whether or not sales utilizing
StorageBattles is a public sale at the self-service storage facility or a reasonably
near public place. Based only on a review of this subchapter it is my general
opinion that the sale would meet the requirements of Section 59.045. Although a
buyer makes their bid on the internet, a "sale" (under my interpretation of the
Act), has not occurred until money has been exchanged between the parties.  Be aware
that the highest bidder picks up the property at the storage facility and pays the
bid price at the facility. An analysis of that section, in my opinion would involve
the definition of a "sale." If the sale is the transaction between the highest
bidder and the facility, most certainly that transaction occurs at the facility.

Sale Law and Legal Definition:  Sale is defined as the transfer of ownership or
title to property from one person to another for money or credit. Sale is also
defined as the act of selling.  Bus.Edge
Group,Inc.v.ChampionMortg.Co.,519F.3d150,154 (3dCir.N.J.2008)


Travis, as you and I both know, the Texas statutes were written in 1984, before
anybody had any indication of the power or reach of the internet.  In 1982, the
Internet protocol suite (TCP/IP) was standardized and the concept of a world-wide
network of fully interconnected TCP/IP networks called the Internet was introduced.
Access to the ARPANET was expanded in 1981 when the National Science Foundation
(NSF) developed the Computer Science Network (CSNET) and again in 1986 when NSFNET
provided access to supercomputer sites in the United States from research and
education organizations. Commercial Internet service providers (ISPs) began to
emerge in the late 1980s and early 1990s. The ARPANET was decommissioned in 1990.
The Internet was commercialized in 1995 when NSFNET was decommissioned, removing the
last restrictions on the use of the Internet to carry commercial traffic.  How could
any state statutes written in 1984 have predicted or taken into consideration any of
this?


Thanks again for your comments, and I look forward to working with you and your site
in the future.

Best regards,

Jim


James Grant
President/CEO
StorageBattles.com
7281 E. Earll Drive
Scottsdale, AZ. 85250



My response:

In response to: Could you please elaborate where the location is missing?

In two legal notices:

NOTICE OF PUBLIC SALE To
be held at:
storagebattles.com
Spare Space Storage
Date: January 31, 2013
Begins at: 12:00 AM
In accordance with the provisions
of M.G.L., Chapter 105-A,
Spare Space Storage will hold
a public auction online at www.
storagebattles.com of delinquent
storage units to satisfy
operator’s lien.
Unit# 1284 BMW International,
M. Deshay
Unit# 3313 Chris Trease
Unit# 1206 Ricky Brooks
Unit# 3113 Jessica Bunch
Unit# 1196 Roberto P Voicu
Unit contains contents of
household goods.
All units to be, sold in entirety
to highest bidder:
All contents must be removed
same day, Payment due immediately
upon bid acceptance.
Spare Space Storage reserves
the following rights: (1) to
refuse any and all bids; (3) to
cancel the auction at any time
for any reason.
1-21-2013 & 1-31-2013

&

Legal Notice of Public Sale
To be held at:
StorageBattles.com
Begin Date: February 2nd,
2013 1:00pm
End Date: February 11th,
2013 at 1:00pm
In accordance with the
provisions of M.G.L.,
Chapter 105-A, American
Mini Storage will hold
a public auction online
at StorageBattles.com of
delinquent storage units to
satisfy operator’s lien. Unit #
3005 Mary Hernandez; Unit
# 3029 John D Mesa; Unit #
4040 Adolph Lopez
Unit contains contents of
household goods. All units
to be, sold in entirety to
highest bidder. All contents
must be removed same day,
Payment due immediately
upon bid acceptance.
American Mini Storage
reserves the following rights:
(1) to refuse any and all bids;
(2) to cancel the auction
at any time for any reason.
Contact Jennifer, Manager
at 713-957-3666.
1-25-13; 2-1-13-2-jd


I think the facility managers are just confused by the following statement on your website: "the only difference is you must state the auction is being held online at storagebattles.com (where you would normally have the facility's address)"

Also, I respect your attorney's opinion, but if "the sale" takes place when the buyer pays the facility manager in cash, it is no longer "public."

Yes, our laws, along with many other states', are antiquated. Do I hope they amended the laws to allow online storage auctions? Yes, but as of now, these storage facilities are at great risk of being sued.

Travis Lane
AuctionsTX.com
StorageAuctionForums.com

Also, I respect your attorney's opinion, but if "the sale" takes place when the buyer pays the facility manager in cash, it is no longer "public."

I think you're nitpicking words. The intent of the law is that the sale or auction be open to the public. An online auction meets that criteria. As to payment, the buyer arrives and makes good on his winning bid and takes ownership of the contents within the unit. The auction and payment are two process of the same deal and are not mutually exclusive and therefor compliment one another.

Follow up emails:

His response:

Travis:

I thought you meant on my web page.  Thank you for a heads up.  I will our member
services quality control person get on it immediately.

As for your other comment, it is a public sale as long as anybody can bid on it,
which they can, and after the public sale is finished, then they can simply complete
the transaction and pass the consideration.  Athough i understand your thoughts, and
respect your opinion, I must bow to my $400 per hour corporate attorney who
specializes in storage and litigation.

Jim


James Grant
President/CEO
StorageBattles.com
7281 E. Earll Drive
Scottsdale, AZ. 85250


My response:

Jim,

At $400 an hour, I would tell you anything you wanted to hear as well!

I respect your opinion as well; however, I must bow to Connie Niemann Heyer, attorney for the Texas Self Storage Association, who stated that she does not consider auctions that take place online only, to be meeting the strict letter of the law requiring that the sale take place at or near the storage facility. Her opinion was published in the TSSA’s magazine.

I guess we will just agree to disagree. Jim, I think you made a very smart move buying out your competitor. I also think online storage auctions are the future once we get all of the legal issues worked out. I wish you the best of luck and if I can be of any assistance to you in the future, feel free to call on me.

Respectfully,
Travis Lane

The sale isn’t “Public” since to make a bid a person has to have a credit card on file with the auction company. The sale is exclusive, it doesn't let all individuals participate…

Open to the public doesn't mean it has to be setup so that every single person on the face of the Earth can participate. In keeping with your line of thinking, local auction exclude those that don't have the cash to bid and only cater to those that have cash. So it's the polar opposite of online bidding.