Actually, no. But let’s put this into context. Casual observers will often assume that operators or employees of art storage businesses such as ours routinely “end up” with art that is somehow leftover or abandoned.  So we’ll get the “cool stuff” question or the “you must have an amazing collection” companion comment. Again, no. Just doesn’t happen. For a variety of reasons.

In case you haven’t forgotten…

Storage clients don’t tend to forget where they have stored valuable art. Those pesky bills we send every month are a pretty good reminder, for one thing. Many clients also have their own independent insurance on stored property, and if something happens to them the insurer has a record of what is where. Similarly, corporate collections, estates, and institutions keep records which survive and surpass the knowledge of any one individual; and heirs to potentially valuable holdings tend to have a pretty good idea where Mom & Pop have been keeping the good stuff. There are stories of mixups and deaths where it has taken heirs or other principals years to track down and be reunited with family stored art, but those scenarios are not common.

Your balance is currently.. yikes!

The truth is, a warehouse operator would rather have your timely payment than be forced to deal with items you have abandoned. Even valuable or potentially valuable art or antiques. And this is because, although specific provisions of the law vary from state to state, warehouses are very closely regulated as to the lawful manner in which they must, or can legally, dispose of abandoned property or contents of past due storage accounts. It’s a time consuming process, expensive, and results (i.e. getting paid in full) are not guaranteed. In addition, every step of the process exposes the warehouse operator to potential liability if correct procedures are not followed.

So even though that Lichtenstein with the red cherries in the bowl would look super nice over my mantle, and the owner is three or four months, or even a year behind on storage payments, I can’t have it and don’t want it.

Warehouseman’s lien

A warehouse operator does inherently have a “warehouseman’s lien” on stored property, which permits the operator to retain the goods unless or until all outstanding charges are paid. If the warehouse releases the goods, the lien is lost. So in practice you don’t get the Grandma Moses back, or for that matter even grandma’s old sofa, if you have an open balance. Makes sense. But from that point on the law typically favors the depositor of the goods. Statutes have been written specifically to prevent abuse by warehouses, which could otherwise “convert” goods to their own use, or, in layman’s terms, just walk away with stuff. If accounts remain unpaid, goods can be sold in accordance with the law.

Here’s a nice little tidbit you might enjoy from the California Commercial Code, Section 7209:

(a) A warehouse has a lien against the bailor on the goods
covered by a warehouse receipt or storage agreement or on the
proceeds thereof in its possession for charges for storage or
transportation, including demurrage and terminal charges, insurance,
labor, or other charges, present or future, in relation to the goods,
and for expenses necessary for preservation of the goods or
reasonably incurred in their sale pursuant to law. If the person on
whose account the goods are held is liable for similar charges or
expenses in relation to other goods whenever deposited and it is
stated in the warehouse receipt or storage agreement that a lien is
claimed for charges and expenses in relation to other goods, the
warehouse also has a lien against the goods covered by the warehouse
receipt or storage agreement or on the proceeds thereof in its
possession for those charges and expenses, whether or not the other
goods have been delivered by the warehouse. However, as against a
person to which a negotiable warehouse receipt is duly negotiated, a
warehouse's lien is limited to charges in an amount or at a rate
specified in the warehouse receipt or, if no charges are so
specified, to a reasonable charge for storage of the specific goods
covered by the receipt subsequent to the date of the receipt.

Got that?

What happens next?

In a subsequent post I’ll discuss what happens next in the process, which is typically that the goods are sent to auction, but only after the warehouseman has satisfied a chain of legal requirements and selected an auction venue suitable to the type of goods held in the account.

When you store with a reputable warehouse, the law protects you from unscrupulous practices, which is as it should be. So, if  that was your next question, no, we can’t sell the goods to our pals off the loading dock, hock the Hockney, or take the Thiebaud to a thrift shop where our favorite aunt happens to be a frequent browser. Section 7210 of the California Commercial Code is watching.

Betsy Dorfman