WAREHOUSE LIENS – WHAT YOU CAN DO AND WHAT YOU SHOULD DO
January is a good time to review your storage receivables and see how many of your customers are past due in their payments – you probably have more than one or two. What can you do?
First, you should follow your normal collection process – phone calls, emails, maybe even letters (snail mail). Hopefully you have a standard collection policy; if you don’t, January is a good time to set one up – including the number of days an account is considered “past due”.
Next, examine your storage documents – a warehouse receipt or storage contract – to make sure that this document allows a lien for unpaid storage charges. Without such a document, you may have no right to a lien.
If the paperwork allows you to establish a lien, follow the procedure to the letter! In most states the procedure includes Certified letters, newspaper notices, auction notices and a specified number of days for each process before you can sell the goods. Check with your state’s moving & storage association, your legal advisor, or a licensed auctioneer who handles mover’s storage warehouses. (The rules are completely different for self-storage, so make sure to specify what type of stored property is subject to your lien.)
If there is an error in the process, you may be liable to the storage customer for the full value of the goods (not just $1.00 per pound), so be careful, and check to see if you have insurance for auction sales.
If you need a copy of the Uniform Commercial Code please email firstname.lastname@example.org
Courtesy of Carole Botcher, MOVE-PAK CONSULTING – www.movepakconsulting.com or 213-760-7444.