LEGAL Q&A: Advice from Tenant Access to Requests for Auction Buy-backs

by Connie Niemann Heyer, TSSA legal counsel

QUESTION 1: We have a tenant storing with us but he has gone AWOL. There is a person, call him Party B, listed in the blank in TSSA lease paragraph #1, whom the tenant has authorized us to speak with (at our discretion) about the lease and who can authorize lock-cutting. Party B has, from what we can tell, been the primary person paying the monthly rent. Neither we nor Party B can reach the tenant. Party B would like to change the lease to his own name. (The tenant was the fiancé of Party B’s daughter and subsequently broke it off, so now the tenant wants to have nothing to do with the family.) Party B has apparently always had, and still has, the access code and a key to the unit.

Party B doesn’t want to just move the things to another unit because he is in poor health, this is why he wants a new lease in the same unit. What can, or should, I do to help Party B?

ANSWER: As you noted, there is nothing to prevent Party B from renting another unit from you and moving all of the items in the original unit to the new unit. Any tenant who has given someone else his access code and key provided that person the ability to move/remove the tenant’s things. You need not and probably should not (to keep yourself out of the middle of any potential dispute between your tenant and Party B) get involved by helping Party B move. But there is certainly nothing wrong with renting Party B a unit.

The other alternative is for Party B to quit paying and take his chances that he will be able to buy the unit at auction. Perhaps when the tenant is informed that his unit is going to foreclosure (and nonpayment has the potential to result in legal proceedings that could affect his credit) he will cooperate by signing the Authorization and Release form to abandon the unit, thus allowing you to lease that same unit to Party B.

QUESTION 2: I had a tenant ask about charges to his account. As I was explaining the charges, I started referring to the notes I took when I spoke with him in a previous phone conversation. The tenant then demanded a copy of the notes. Am I required by law to supply a copy of those notes? (Sometimes I make notes as to whether the tenant was uncooperative, etc.)

ANSWER: No, unless you are in a lawsuit and your records are subpoenaed, and your notes are part of the records that are subpoenaed, you are not required to supply the tenant a copy of your notes.

QUESTION 3: If the owner of the storage facility where you work tells you that you can use a unit, does another employee have the legal right to open the unit and look inside of it, with or without a witness?

ANSWER: The answer to this question will depend entirely upon the terms of use the facility owner and manager came to. For any unit, whether a manager or a tenant uses it, you should have a written rental agreement (even if there is no rent). If you do not have a written agreement, then you have an oral agreement, and your right to exclusive or non-exclusive use will depend upon the terms of your oral agreement. If you did not address whether you had the exclusive right to use this unit, then the facility owner may have a good argument that he/she told you could use the unit, but never told you that no one else would have access to the unit or use of the unit. If you have not already,

I would suggest that you firm up the terms of use of the unit, preferably in writing via a rental agreement.

QUESTION 4: On the day of our auction, we received payment in full via mail for a unit that was previously delinquent. However, we didn’t receive the mail until after we had the auction, so the items were already sold.  The tenant is demanding their things back, or the address of the person who bought their unit. What should we do?

ANSWER: Unless you have an agreement with your buyers (in other words, unless this is in your sale rules or other agreement with your buyers), you may give the tenant, at your discretion, the contact information for the person who bought their unit. But that puts the buyers in an awkward situation. Many of our members provide the tenant’s contact information to the buyer and leave it to the buyer to arrange any buy-back deal. You have no legal duty to put the tenant and buyer in contact. However, it often works out well to give the buyer the tenant’s contact information. Often the ten- ant’s main goal is to get back items of sentimental value, which are not worth much to the buyer, so the buyer simply gives the items of sentimental value back to the tenant.

Regarding the attempt at payment, the tenant has the right to redeem his property “prior to its sale” according to Chapter 59, Section 59.008, of the Texas Property Code. If the mail was delivered by the mail carrier after your sale, then the tenant did not redeem the property “prior to its sale” and has no right of redemption.

It is a good idea during any auction to close off any payment lock box and direct people with a note to the physical (or online) auction site if they wish to pay/redeem. It is also a good idea to check the mail prior to any auction, and it sounds like you did.

QUESTION 5: We overlocked our tenant for nonpayment and he went to court and got a writ of re-entry. What is this? The judge let the tenant get back into the unit to get his things, but the tenant had not paid us. How can he do this?

ANSWER: Assuming you are using the TSSA lease, in my opinion the judge was incorrect in issuing a writ of re-entry. A writ of re-entry is something that a judge can issue upon request if the judge thinks a landlord has improperly locked out a tenant. Texas statutes allow for a writ of re-entry in these improper lockout situations. However, you did not improperly lock out a tenant if he was behind in rent because the TSSA lease expressly allows overlock if a tenant is behind in rent or other amounts. State law expressly states that language in a lease supersedes language in state law requiring advance notice of a lockout. Unfortunately, there is not a lot that can be done now, but next time, you might want to hire a lawyer to help the judge understand the intricacies of self-storage lien law.

QUESTION 6: We used an online auction service for a recent foreclosure, but the winning bidder hasn’t shown up to empty the unit. How do we handle this situation? Do we have to hold another auction, or can the unit be sold to the next highest bidder?

ANSWER: This will depend on your auction rules. Many online auction sites post auction rules that all bidders have to agree to in the course of signing up to bid. Check those rules and see if they address this issue. Most of these websites also allow facilities to add their own rules to any existing rules bidders must agree to as a condition of bidding. If you have added the TSSA sample auction rules (tailored to your specific needs for your facility), this situation is addressed in these rules, so you would have the right to sell to the second-highest bidder. In short, check the rules for your auctions, and if they don’t address this situation, revise them so you are covered.