What Happens If You Stop Paying for Your Storage Unit?

You Missed a Storage Unit Payment: What Happens Next?

If you miss a storage unit payment, the process usually starts with a late fee, along with reminder calls, emails, or letters from the storage facility. If the bill remains unpaid, most companies will eventually deny access to the unit, place a lien on your belongings, and, in some cases, auction the contents to recover debts. However, this process usually takes time, and most storage facilities would rather work with you than go to an auction.

Your lease agreement is the most important document to review because it outlines exactly what happens if you miss a payment, including late fees, notice periods, lockout rules, and auction timelines. Here's the general process for what happens when you first miss a payment:

1. Your Unit Will Go Into Default

A storage unit goes into default when you miss a payment date as set out in your lease agreement, although many facilities offer a short grace period before considering the account officially delinquent. While policies vary (some quite widely), many storage companies give anywhere from around 5 to 15 days before applying late fees, and about 30 days before the unit is classed as in default.

When a payment is late, the facility manager will typically reach out to you shortly after the due date. They may attempt contact via:

• Phone calls
• Emails
• Text messages
• Mailed notices or certified letters
• Notices placed on your account through the facility's online portal
• Physical signs on the outside of your unit

It's crucial you maintain up-to-date contact information with the storage facility; if you're late paying and the manager can't get in touch with you, you may miss important notices about fees, lockouts, or even an upcoming lien sale.

Once a storage unit officially enters default, facilities commonly deny access until all outstanding fees are settled. Often, companies fit an overlock on the unit (in addition to your own lock), making it impossible for you to enter and retrieve possessions while in arrears.

2. Time To Talk to the Property Manager

After your unit goes into default, property managers usually wait several weeks before moving toward an auction. Additionally, many states' lien laws mandate that facilities wait at least 30 to 90 days after missed payments before starting the auction process. Throughout this period, the company will normally continue sending notices, attempting contact, and giving you opportunities to resolve matters.

If you haven't already had a conversation with the facility manager, get in touch to explain your situation. Most companies would rather work with you than go through the hassle and expense of auctioning off items in your storage unit.

Moreover, storage lien laws are usually strict. The companies wishing to use them must comply with notice requirements, timelines, and auction procedures. If managers make any procedural mistakes, their companies could run into legal problems.

Because of this, many storage companies will agree to temporary solutions, such as:

• A short-term payment plan
• Waiving or reducing late fees
• Discounted rent for a month or two
• Allowing partial payments
• Letting you move into a smaller, cheaper unit
• Giving you extra time to empty the unit yourself
• Allowing a third party (like a friend or family member) to help pay the account
• Reaching a surrender agreement, whereby you voluntarily give up the unit (sometimes with, sometimes without its contents) without going through an auction

Crucially, the earlier you contact the manager, the more options are usually available to you.

3. Your Unit Goes to Auction

Before the contents of a storage unit can be sold at auction, the facility manager must follow state lien rules and procedures. This typically includes sending multiple notices, setting a final payment deadline, and advertising the auction publicly. Public notice is generally online or in a local newspaper. Depending on local laws, companies might also need to document the contents of the unit and keep records showing they followed the correct process.

While the management team may remove personal documents, photographs, passports, tax records, and other sensitive information before the auction, this isn't always the case. A lot depends on local laws and company policies.

You normally can't obtain the buyer's details after your unit is sold due to privacy concerns. If you can get the auction winner's information, there's no guarantee they still have specific items. Typically, once your belongings have gone, they've gone forever—including sentimental items.

Should I go to the auction of my unit?

There's usually no point for you or a representative to attend the auction; bids are usually for the entire unit contents, based on looking inside from the doorway. Auctions don't usually separate contents and sell items individually. The only time it would be worth your attending is if you planned to bid on the unit yourself.

4. Your Credit May Take a Hit After the Auction

In many states, if an action earns more money than the debt, storage facilities will give the unit lessee the surplus amounts (after deducting unpaid rent, fees, and auction costs). Sometimes, though, it's not automatic and is instead on the individual to claim back that money within a certain timeframe.

Conversely, if the auction doesn't raise enough money to cover the outstanding debt, the remaining balance may still be your responsibility. The facility could pass the matter to a debt collection agency or report it to credit bureaus, which may negatively impact your credit score. In some cases, facilities may even take legal action to recover the difference.

What to Do If You Can't Afford Your Storage Unit

If you know you can't afford your storage unit anymore, the best thing you can do is to contact the property manager as soon as possible. Ignoring the problem usually makes it worse, with mounting late fees. Also, the more money you owe and the closer things move toward auction, the fewer solutions you may have.

The storage company may agree to some or all of these options when you contact them as soon as you know you'll miss a payment:

• A temporary payment plan, where you pay extra each month until the arrears are cleared
• Reduced or zero late fees
• A lower monthly rate (on either a temporary or permanent basis)
• Moving to a smaller, cheaper unit
• A short additional period to retrieve possessions from the unit
• Allowing someone else to take over your payments
• Voluntarily surrendering the unit before auction

Initiating a conversation may feel awkward, but remember that most companies would prefer to avoid auctions, where possible. Managers may be more open to finding a solution with you than you expect.