What Are Your Options if a Warehouse Places a Lien on Your Property and Tries to Sell it?

Under Florida Statutes § 677.209,"[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".

In short, this means that a warehouse storing property can obtain an ownership interest in the property, and subsequently, sell such property if there are unpaid invoices related to the service of storing the property.

However, warehouses sometimes abuse the rights granted to them under Florida law. They may engage in overselling—selling property worth hundreds of thousands of dollars to satisfy a relatively small invoice. In other cases, they may sell an entity’s or person’s property to collect on a debt associated, but not directly the debt of the property owner. This latter example can occur in a situation where the freight forwarding company does not pay the fees it owes to the warehouse for a debt that goes beyond the goods being sold.

Thankfully, § 677.210 has strict and detailed lien and sale procedures when a warehouse wants to collect on its invoices with the sale of goods or products. For example, § 677.210 (2)(a), "all persons known to claim an interest in the goods shall be notified." The notification can't just be a text or an email, "[i]t must be delivered in person or sent by registered or certified letter to the last known address of any person to be notified." § 677.210 (2)(b).

Similarly, the notification can't just be a generic invoice for the total amount owed. Rather, it has to "include an itemized statement of the claim, a description of the goods subject to the lien, a demand for payment within a specified time not less than 10 days after receipt of the notification, and a conspicuous statement that unless the claim is paid within that time the goods will be advertised for sale and sold by auction at a specified time and place." § 677.210 (2)(c).

Furthermore, the warehouse can't sell the items anywhere. It has to sell it at the "nearest place to where the goods are held or stored." § 677.210 (2)(e). After the notification, the warehouse has to place "an advertisement of the sale [] published once a week for 2 weeks consecutively in a newspaper of general circulation where the sale is to be held." § 677.210 (2)(f). ?

The warehouse does not get to keep the excess proceeds. Instead, it has to "hold the balance" for any demand made by any person with interest in the property.

• 677.210 (6).

If a warehouse fails to comply with the requirements of § 677.210, "[a] warehouse is liable for damages caused by failure to comply with the requirements for sale under this section, and in case of willful violation, is liable for conversion."

For more information regarding warehouse lien enforcements, contact one of our experienced attorneys at 305-570-2208. You can also email our lead attorney Eduardo directly at?[email protected].?

We at Ayala Law PA are passionate about helping those in legal need, so please don’t hesitate to?schedule a case evaluation with us online here.