Storage Debt – Cash in Hand or Dead Weight?

Storage debt

Self-Storage firms are waking up to the fact that selling goods at auction can be an expensive and time consuming exercise. This is very common with goods that are worth next to nothing as is common. Not only can sale through auction be expensive but also a regulatory minefield. If the self-storage firm is not careful they will be liable to prosecution for unlawfully interfering with the debtors goods.

Can  I sell a debtor’s goods in storage?

The sale and disposal of goods is regulated by the Torts (Interference with Goods) Act 1977 (the Act).  In situations where the debtor fails to pay for storage charges their goods may be sold providing: –

(i)               the outstanding balance is at least 3 months old; and

(ii)              the goods in storage are owned by the debtor; and

(iii)            statutory notice of sale is sent by recorded delivery or registered post; and

(iv)            sufficient particulars of the goods in store and the address of where they are held is given; and

(v)             statement of the date on or after the sale is proposed is given; and

(vi)            specification of the amount that is payable by the debtor in respect of the goods and which became due before the giving of the notice is given; and

(vii)           the outstanding balance is not subject to dispute.

How do I ensure the debtor owns the goods in storage?

One of the biggest problems is ensuring the debtor owns the goods. The easiest solution is to incorporate a term in the terms and conditions stating that the customer/debtor undertakes that they are the owner of the goods, and that they will indemnify the self-storage firm against any third party claims for title.

The proposed date of sale after giving Statutory Notice of the same must be such that it gives the debtor reasonable opportunity of taking delivery of the goods. In the circumstances 21 or 28 days from the date of notice is considered reasonable.

Master Collections offers expertise in self-storage and storage debt collection to the point where we arrange removal of the debtors goods from storage once the account has been settled.

In essence a fully serviced debt collection process inclusive of all regulatory requirements including query management.

For expert advice on storage debt collection call award winning credit professional and Legal Executive Carlo Pegna on 01920 481467 for a FREE debt recovery assessment.