TV Star Learns a Hard Lesson About Storage Unit Contracts

When a storage unit isn’t paid, as a general rule, the contents of the storage unit can be sold, usually at public auction. Buyers at these auctions often find themselves with valuables, purchased at a fraction of the property value. However, one famous purchaser found that not reading the fine print on agreements with the storage company when purchasing property at auctions, can end up causing problems.

Star Buys Contents of a Unit

The case began when a former star on the popular TV show “storage wars,” Dave Hester, purchased property in a storage unit that had gone unpaid. It was reported that he paid $12,000—only to have the sale voided unilaterally by the storage company shortly afterward.

Hester sued, seeking to enforce the sales agreement between him and the storage company. But that agreement contained a clause that said that the storage company could always void the sale, for any reason, upon returning the money to the purchaser (which they did here).

Lawsuit Filed Seeking to Enforce the Sale

Hester sued, but the court found the agreement to be clearly worded, and found that the cancellation was not done out of any malice, or as a way of targeting Hester, or that the cancellation was done in bad faith.

The court noted that these clauses which nullify sales, exist so that the storage company can avoid selling people’s properly wrongfully if a problem or error is discovered. These provisions protect the renters of storage units from having property sold improperly.

Here, Herter’s sale was cancelled because the storage company realized that the renter was up to date on payment, but that a delinquency had incorrectly been noted in the renter’s file. In other words, the sale was conducted in error, and the error was caught in a timely manner.

Hester claimed that he signed the contract under duress. He claimed that because agreeing to such nullification clauses would end up costing him 25% of his income, that he had no choice but to sign the agreement, and thus, signed it under duress. But the court disagreed, saying this did not constitute duress.

Florida Storage Unit Laws

In Florida, a storage unit that has not been paid, can evict (lock out) the tenant from the unit, and sell the property inside, without a lawsuit or a court order. However, if a storage unit owner wants the security of a court order, and possibly law enforcement assistance if it is anticipated that there will be a dispute, the storage unit owner can evict the renter by filing a lawsuit.

In 2017, Florida’s storage unit laws were made even stronger. The law allows owners to issue late fees, have cars towed, and conduct any auction of personal property online, so long as it’s done through a website that conducts such auctions regularly.

Operators must publish public notice of sales of the contents of units, in a newspaper where the storage facility is located.

Call the West Palm Beach business litigation lawyers at Pike & Lustig to help with any business or commercial law litigation problem.