The SSAA has established guidelines for members to follow when it is necessary to sell up a default storer. There is no self-storage legislation that dictates exactly how and when we can sell up a defaulting storer. Instead, our guidelines have been developed in response to legislation, common law, and are influenced by the experiences of members over the past two decades.
In short, we have established a best practice that balances the law and practicality, with a firm eye on minimising legal risk.
1. Send all the notices
The SSAA has a range of notices which should be sent to storers warning them that their account is overdue and they are at risk of having their goods sold or disposed of.
The content of these notices and the recommended timetable you should follow when sending them is set out in the MAP (Manual of Advice and Procedures) available from the members only section of the SSAA website.
When the storer has elected to receive electronic communication only, you need not send any traditional or “snail” mail. Instead, notices should go by email and SMS. When the storer has NOT elected to receive communication electronically, you should still send email and SMS notices BUT YOU MUST ALSO send notices by traditional mail.
When traditional mail is the preferred method of contact (ie. the storer has not consented to electronic only), the SSAA advises that certain notices should be sent in duplicate — one copy by traditional mail, and the duplicate by registered or trackable/traceable mail.
Note: There is no legal requirement to send any notices by registered mail. However, we recommend that you do use registered mail for certain notices so that you can prove or demonstrate that you took action to notify the storer that they were overdue and at risk of having their goods sold.
In the past, various members who have had to defend their actions at VCAT, NCAT or other tribunals have found that being able to produce evidence (ie. registered mail delivery or return notice, or trackable mail data) that notices were sent has been a highly influential factor in determining that the facility has been reasonable and done all it could to alert the storer. This has been the case even when mail was returned to the facility because the storer had refused delivery, moved addresses or not collected.
You should also retain any proof of receipt of SMS, email or proof of opening of electronic messages.
You can use Facebook or other social media to contact the storer. So long as the message is private, and it is used in addition to contact through the designated contact details provided by the storer, you can send any of the notices through social media. Again, keep proof that the message was sent and received (where relevant).
A copy of notices should also be sent to the ACP (Alternate Contact Person). Notices should be addressed to the storer c/o the ACP. This is particularly important when traditional mail is being returned to the facility.
2. Undertake a PPSR search
The PPSR has been up and running for a number of years now. You should undertake a PPSR search using the storer’s name and date of birth immediately before cutting the lock. This is to ensure there is no listing over the storer’s property. When the space is found to contain a motor vehicle, watercraft or aircraft, you will need to undertake another PPSR search using the VIN or serial number.
When the storer is a company — a registered company, not merely a partnership or business name — the search done prior to cutting the lock is performed under the company name and ACN (Australian Company Number).
Please note: an ABN and an ACN are not the same, and you cannot use the ABN for this search. If you do not have the ACN it is possible to obtain it from the ASIC website.
When the search reveals that there is a security interest listed over goods, you may need assistance from the SSAA. Generally, if the items listed are NOT in the space you can ignore the security listing. For example, when the security interest is in relation to tools and there are no tools found in the space, you need not contact the registered security holder. On the other hand, when the search reveals that there is finance owing on a vehicle and the vehicle is in the space, you will have to contact the security holder and negotiate. You should avoid selling any items that have any interest registered over them. Contact the SSAA for specific advice if this arises.
3. The dreaded inventory
Over the years many members have appeared before various tribunals regarding complaints from storers relating to sell-up. Almost without fail, the tribunal demands to see the inventory of the goods taken by the facility at the time of default. This is usually required to demonstrate what was in (or not in) the space at the time.
Clearly, the logic here is absurd. If a dodgy facility wanted to steal or hide items that the storer may have, they would just leave them off the list! Nevertheless, an inventory is considered crucial.
An inventory should be undertaken concurrently with sorting items. You should not offer for sale any items that have not been examined by you, as you may have a liability to the purchaser. We have heard horror stories over the years of sell-ups that have not been sorted and the purchaser has ended up with used syringes, firearms or child pornography. Where you facilitate the sale of illegal items, even when you did not know the items where there (ie. they might have been in a sealed box) you may be liable. Furthermore, if the purchaser suffers an injury from items sold to them, you may be liable in negligence.
When you find hazardous items — used syringes or items containing biohazards, broken glass, items impregnated with mould or infested with parasites — you may dispose of them. You should take a photograph of the items to prove why you have taken the action, and dispose. Depending on the nature of the hazard, you may elect to dispose of the entire contents of the shed.
This may occur, for example, when used syringes are found in a unit. It would be reasonable to argue that there is a high risk of needle stick injury to staff if they continue to sort through that space. Take a photo of the syringes, and take photos of the other contents (just several group, overall photos) and dispose.
Please forward any photos of hazardous goods to the SSAA for us to add to our collection. These photos may help demonstrate what sort of items regularly turn up when spaces are cleared, and are intended to be used to assist any member challenged at law over disposal of goods.
Staff should never reach into boxes or bags. Items should be carefully tipped out onto the floor so staff can see what they are handling, and make informed decisions about whether items should be handled at all.
If you uncover potentially hazardous items during a sell-up and are uncertain whether or not you may dispose of the entire unit, please contact the SSAA for advice.
You should support your inventory by videoing the cutting of the lock and the inventory process itself (when possible). At the very least you should take as much video footage as possible, panning over the contents of the space.
You are advised not to sell private or sensitive items such as passports, photos or birth certificates. These should be removed from the auction list and placed aside for collection by the storer. Even though the SSAA considers it best practice, you are not required at law to return these items to the storer. How long you keep them for, whether you require a payment from the storer to collect them and other practical aspects are a matter for you to determine.
4. How to sell properly
The SSAA recommends selling up by online auction. You should list the entire contents (hazardous items removed) as one auction lot. This will mean that you clear all items, not just the more valuable ones (and save yourself a trip to the dump).
Service member ibidonstorage runs a successful, industry specific auction platform. Other options include eBay and graysonline. It is recommended that you run the sell-up as an auction and not at a fixed price. This is because an auction is an open market bidding process in which the price paid for the items reflects what the market was prepared to pay for them. This might be important if the storer claims the items were more “valuable” than the amount you received when you sold them.
If you have run a two-week auction campaign and included a detailed inventory and many photographs of the items and the final sell price reached was $10, then this is what the items are “worth”. It is easier for a storer to argue items were worth more than you got for them if you fix the price and sell on Gumtree or to a secondhand dealer (one man’s treasure and all that!), and much more difficult for a storer to run an argument that the items are in fact worth $10,000 if the auction only reached $10.
Remember! Only offer for sale items you have inspected. You may have a liability to the buyer for hazardous goods, and could be criminally liable if you sell illegal items.
All of these “rules” have been established in response to members’ direct experiences. The SSAA closely monitors the outcome of any self-storage related legal challenges, including unreported tribunal matters. We have modelled our recommended best practices to reflect those challenges and their outcomes.
You may elect to approach selling up a storer in a method you consider less onerous — and it is certainly your business prerogative to do so. However, if you want to ensure your next sell-up does not come back to bite you, make sure you follow the SSAA’s best practice as set out in the MAP.
AND WHEN IN DOUBT … contact the SSAA for assistance.
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