Your Tenant Stopped Paying. Now What?

Your Tenant Stopped Paying. Now What?

Just as an apartment tenant leases a space, a tenant utilizing a self storage business also rents a space. Both can get evicted if they are delinquent in payment. If you own a self storage business, you’ll want to be familiar with the self storage eviction process, just in case you ever need to use it.

As an investor, you are protected by numerous state laws. Even if a self storage tenant stops paying rent, you have remedies to ensure you’re not left entirely in the red on the unit. Learn more about the resources that can help you below.

Everything You Need to Know About Eviction From Storage Units

Self storage eviction hinges on two things: state laws and the agreement between the self storage business and tenant. As an investor, you’ll want to consult with an attorney who can help you draw up an agreement that will protect you if non-payment arises. Long before any need for eviction occurs, you’ll want to get familiar with the agreement and have some way of contacting your tenants. Ideally, get multiple forms of contact information from your tenants.

What Happens When Storage Units Are Abandoned?

In many states and at many self storage businesses, once a tenant is late with payment, the company makes multiple attempts to contact them. After 30 days of non-payment, the business will typically cut the lock on the unit and replace it with their own lock. Some will also add a letter to the front of the door, warning the tenant they cannot enter their unit.

Most states require self storage units to make attempts to contact a tenant, sometimes even by letter. If a tenant continues to not pay, the unit is considered abandoned and the contents may be auctioned off.

How Long Before a Storage Unit Is Considered Abandoned?

Lien laws in each state determine how long it takes for a self storage unit to be abandoned. In some states, a unit’s contents can be sold in 30-90 days as long as proper state laws are followed. In Texas and some other states, for example, notices of self storage auctions must be published in newspapers at least two weeks before the auction date.

Once a self storage tenant stops paying rent, their account is delinquent as soon as their bill is overdue. The unit is not considered abandoned until state lien laws determine it is. Contents cannot be sold until all state requirements are met. Even then, most investors try hard to contact the tenant to secure the rent and arrears rather than go through the time-consuming and riskier route of an auction.

What Should You Do Next in the Eviction Process?

Once your tenant has stopped paying rent, make every attempt to follow up with them. Keep in mind that many people have faced difficulties making payments due to the pandemic. It can be useful to try different contact methods rather than letting the unit sit unusable and unpaid. 

Investment Real Estate, LLC has several self storage owner resources you may also like to review if you’re taking the next steps to eviction. Contact us today to talk to our self storage professionals.

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