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Public Employee Press: PEP Talk

Proposed storage facility auction moratorium

Senior MELS Attorney

In late Oct. 2020, an article appeared in The City discussing a proposed moratorium on the auctioning of self-storage customers’ possessions. Due to Covid-19, many people are in dire financial straits and have been unable to continue monthly storage facility payments. Although nothing has yet been signed into law, a number of lawmakers are proposing a halt to storage facility auctions for the duration of the Covid-19 pandemic emergency in New York, plus one year.

When a customer contracts with a facility for the storage of personal possessions, the facility takes a lien on the customer’s possessions in order to secure payment. Upon default, the facility is entitled to schedule an auction of the customer’s possessions to recover any outstanding payments. The facility does not need to file an action in court to do so.

There are minimal safeguards in place to protect consumers. The facility must provide notice of its intent in writing to auction a customer’s possessions. Facility operators now can send lien notices by personal service, registered or certified mail, by verified mail, or email, as long as certain lease conditions regarding electronic notification are met.

The notice must offer the customer the opportunity to fully cure any missed payments in order to stop the auction. In the absence of repayment in full, the auction can generally proceed within 30 days of the mailing of the notice.

DC 37 members who receive a notice of intent to sell or auction their possessions are encouraged to contact MELS as soon as they receive the notice. Prior to auction, there are some legal requirements a facility must meet in terms of noticing and correctly setting forth the value of the claim. MELS attorneys are available to review the matter for compliance and to assist members if deficiencies are found. Please call MELS at 212.815.1111.