Are Online Storage Auctions Legal In Your State?

Update - April 25th, 2014 - OnlineStorageAuctions.com, now offers a legal alternative to online only storage auctions which complies with lien laws in all states. Also, the site is completely free to use. There are no buyer or seller fees. Visit the home page for more information.

Over the past few years, a handful of companies which hold storage auctions online have emerged on the scene. Sealed Online Bids, which has taken a revolutionary idea to the next level. StorageUnitAuctionList just got into online storage auctions and it should be interesting to see which company ends up the leader in this niche. I'm actually a big supporter of online storage auctions because I believe that the concept is the future of storage auctions; however, there seems to be a question as to whether they are legal in my state (Texas) and some other states.

This legal dilemma boils down to whether or not a storage auction can be conducted online or whether it must be held at a physical location. Some state’s self storage lien laws are vague and don’t specify where the sales are to be held; therefore, one could reasonably assume that an online storage auction would be permissible. Texas’s self storage lien laws, along with a handful of other state’s, are not so vague. Chapter 59 of the Texas Property Code, section 59.045 clearly states: A sale under this sub-chapter must be a public sale at the self-service storage facility or a reasonably near public place.

So, are online storage auctions legal?

The answer is – it depends. Each state has it’s own unique storage lien laws. To my knowledge, no state’s storage lien laws specifically state that storage auctions can be held online and vise versa, no state’s storage lien laws specifically state that they can’t. The only way to know for sure is to look at your state’s storage lien laws to see if they specify a location for where the sale is to be held. You can check your states storage lien laws here: storagelaws.com/home.htm

So, what do you think? Should storage lien sales be permitted on the internet? Have you ever used one of these online storage auction companies? Would you ever buy a storage unit online? What is your interpretation of your state's storage lien laws, do they allow it?

In California they are legal. Sealed Online Bids does a lot of them. I have purchased one unit in this manner. I'm not sure that I would have went this way but I had been to the facility a couple times in the past and really liked the manager. She takes great pictures for the online auctions and always answer questions when I call her.
I totally understand why she decided to go this route. The last live auction was only three units by the time of auction. Well over 50 people showed up and it took over three hours to auction those units which were all on the second floor. It was a bunch of garbage and only one unit sold.
Last week I was very disappointed as I was bidding on a unit there and about 30 minutes before bidding closed the listing disappeared. I called her immediately and she said the owners mom came in and paid up the past due fees. I had spent some time researching the shoe boxes in the unit and had added up over $1000.00 worth at e-bay prices. Apparently the mom could not let her daughter loose such an expensive shoe collection.
There are facilities in my area that I am not sure I would feel comfortable bidding on an online unit. We will have to wait and see if it really catches on. I truly would not like to do all of my auctions this way as I love going to the actual facilities and bidding live. It is part of the fun of doing this in my opinion. 

I agree, you just can't compare it to the live auction experience.

They are legal in my state due to the fact that auctions are not even required to dispose of the liened contents. The storage facility can take possession of the contents and do what they want with them, so if they decide to hold an auction it just benefits us.

I have bid on a couple of "online" units but haven't won any. I am just not comfortable biddng as high as I would if I could see the unit in person.

Cobia, what state do you live in?

In Georgia, the renter agrees that the items placed in storage are without liens. This is because the owner of the facility actually has a lien on the items when they are put in storage at the facility. The only exception is where there was a certificate of lien on an item that pre-dates the day the item went into storage. As in the instance of a car, truck or some such.

There is one sentence in the statute that answers the OP question;

Any sale or disposition of the personal property shall be held at the self-service storage facility or at the nearest suitable place to where the personal property is held or stored.

Are Internet sales legal in Georgia – I would guess no!

And thank God for it!
 

Oh contrar, I have bid on internet storage units in Georgia! Legal or not, they are happening!

You don't have to send a note, these companies know what they're doing is wrong.

Other online storage auction companies just disregard the law in some states. What do they have to lose? Nobody is enforcing the law and they have lengthy disclaimers that put the legal burden on the storage facility in the event of a lawsuit.

LOL! i can't comment on the business model of anybody else. All I can do is is convey what is fact and according to fact, internet storage auctions are a no-no according to the statute.

Who did you do your bidding with? I might want to send a note too the Georgia AG with the information...

Read it for yourself here:
http://www1.legis.ga.gov/legis/2011_12/fulltext/sb512.htm

Edited to change the link, I posted the wrong version at first.

You know the old saying, "snitches get stitches!" LOL! Anyway, I've used the two "big" sites if that helps you any.

There is actually a third "big site" coming online at the end of this year. It will most likely dominate the others because it already has the relationships in place with the storage facilities.

There seems to be a rush for market share in this niche but the research indicates that it is still 5 years away from becoming mainstream. They have a long way to go. I think sealed online bids only has 7 or so, out of the 5000 +/- storage facilities in Texas, that use them on a consistent basis.

I'm actually considering investing in the online storage auction niche myself. But if I do it, the site will be completely free for buyers and storage facilities. The site will require the facility to have their own PayPal account so that the buyer can pay them directly. This will help avoid some messy lawsuits.

These other big three companies have spent thousands if not tens of thousands in legal fees and market research trying to figure out whether this niche will work. I want to thank them for doing the legwork.

So, who is it?

Who else, Storage Treasures.