What is the legal process for removing or selling the RV?

Mini- Storage Messenger - What is the legal process for removing or selling the RV?

QUESTION: This month’s question: We have an RV occupant with an expensive unit that has not paid in over six month period. We have sent him a certified letter, denied him access, and blocked the vehicle from being moved. What is the legal process for removing the RV or selling the RV? My guess is that there is possibly a finance company looking for the RV as well if he cannot pay the basic rent.

Answer: This is a topic that used to be rare. It used to be that at least the occupant with the expensive vehicle would pay their rent (not always on time), however, with the recent downtrend in the economy, the credit crunch, the housing crisis, etc., all of a sudden we are finding people are simply abandoning their expensive “toys” at the self-storage facility when they give up paying the payments on the vehicle, they simply give up paying for the storage as well.

While the question posed is state specific, i.e. the process for terminating a vehicle and potentially selling it is different state by state, there are a few common issues you need to think about.

First, check to see if your state self-storage statute has a procedure for selling a vehicle. An example of this would be the California Self-Storage Statute. It is not the easiest statute to follow but at least it gives you certain rights to eventually sell a vehicle. If your state self-storage statute does not specifically contain the right to sell a vehicle, check for other type of vehicle liens, such as in Texas; or, you could be in a state, like Ohio, where there is no provision for the sale of a vehicle at a self-storage facility.

Second, especially on an expensive vehicle, there is probably, a lien on the vehicle and the bank or lending institution may be looking for the vehicle to repossess it. You can often determine who has a lien on the vehicle (if you do not have this information in your file) by making a request for a duplicate title (a copy of the title) from your local Department or Bureau of Motor Vehicles. This is not the license bureau. You may not even have to buy a copy of the title or registration in order to determine who the lienholder is, sometimes the BMV will tell you directly, because it is a matter of public record. However, do not expect to get any of this information over the phone.

If there is a lienholder and if the occupant is in default on the lien, your best course of action, presuming you have put the occupant through the default procedure and are now at a point where you are ready to sell or otherwise dispose of the vehicle, is to arrange a “friendly redemption” if your state statute permits that. What I mean by a friendly redemption is to arrange for the lienholder to pay you what is owed in order to achieve release of their secured property. Not every state self-storage statute permits such redemption, check with your local attorney.

Third, you need to consider what the value is of the vehicle you want to sell. In every state that I can think of the self-storage statute says your lien is superior to any lien except those recorded and of public record previous to the storage of the vehicle. This often would include the lien on the title to the vehicle in the storage facility, as lending institutions generally do not provide titles to the borrower until their lien is stamped on the title. Thus before you sell a vehicle, remember you may be incurring all of the costs and liabilities solely for the purpose of paying the bank.

Fourth, you may want to also consider whether or not the state you are in has an exemption for a motor vehicle. Sometimes you can sell a car, even if it is free and clear of a bank lien, and still only be selling the car to turn money over to the former occupant for their vehicle exemption. This means in most states that the occupant has a right to the first “X” dollars of a vehicle you seize and sell to satisfy a debt. Thus, often it may not be worth even selling a vehicle with no lien on it if it has a low value.
Finally, consider eviction as a way to remove a non-paying vehicle from your facility. Sometimes it can be a little more expensive, because there is a filing fee and perhaps a small attorney fee involved, but the rights, remedies, and paperwork are much cleaner and protect you so much more.

You can send your questions, comments, or suggestions for future topics to Jeffrey Greenberger at info@selfstoragelegal.com or mail them to Jeffrey Greenberger c/o Katz Greenberger & Norton LLP, 105 E. Fourth Street, Suite 400, Cincinnati, Ohio 45202 or you can reach Mr. Greenberger at (513) 721-5151, or visit his website at www.selfstoragelegal.com.