Storage Auctions

Are online storage auctions legal in Vermont?

Offline Travis

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Are online storage auctions legal in Vermont?
« on: September 09, 2014, 04:07:13 PM »
Sam recently asked:

Hi Travis. You seem to be very knowledgeable when it comes to the legality of online storage auctions. I was wondering: are online storage auctions legal in the state of Vermont? I was told they do not comply with Vermont lien law. Is this true? Any insight you could offer would be greatly appreciated.

Before I begin, I want to make it clear that I'm NOT an attorney and that this should NOT be construed as legal advice. You should seek legal counsel before relying on any of this information.

After reviewing Vermont's storage lien laws, it's my opinion that you can legally have your lien sale online; however, lien laws in Vermont are, at this time (09/09/14,) still vague. Several states have recently updated their storage lien laws to include clear and concise language which permits the use of online storage auctions and we expect more will follow. To my knowledge, no state lien law specifically restricts the use of online storage auctions.

Vermont lien laws require the time, place, and manner of the sale or other disposition be included in the legal notice. Therefore, the operator should list their facility's physical address as well as the name/URL of the online storage auction service they're using.

The person who told you that online storage auctions do not comply with Vermont lien law was probably referring to the section which states "any sale or other disposition of the personal property shall be held at the self-storage facility, or at the nearest suitable place." With an online storage auction, the tenant's property is still located at the facility and the consummated sale does occur at the facility when the buyer comes in to pay.

Storage auctions in Vermont must also be held in a commercially reasonable manner. Vermont does a very good job explaining the definition of "commercially reasonable" as follows: meaning the owner sells the goods in the usual manner in any recognized market therefor, at the price current in such market at the time of the sale; or otherwise sold in conformity with commercially reasonable practices among dealers in the type of goods sold.

As of now, tens of thousands of storage units have been auctioned off online and the self-storage industry has embraced the technology. In my opinion, online storage auctions are more commercially reasonable than physical auctions since they reach a wider audience and help operators recover more. 

Sam's response:

Thank you very much for your help Travis. This was very informative. As you know, lien law varies significantly from state to state. I had gone over Vermont lien law myself, and you hit the nail on the head:

"The person who told you that online storage auctions do not comply with Vermont lien law was probably referring to the section which states "any sale or other disposition of the personal property shall be held at the self-storage facility, or at the nearest suitable place." I think you're correct. And again, thank you for your help (and the timeliness of your response).

Regards,

Sam


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