“More and more owners are unexpectedly losing their property”: a bailiff’s story

A service that has become popular in Estonia recently – mini-warehouses for companies and private clients – is fraught with danger that many are unaware of. For debts, clients can lose everything they have given for storage. Risto Sepp, bailiff for Harju County, told DV in an interview about why such cases have become much more common in 2024 and what exactly has to be sold.

The business of providing storage boxes for things has become popular in Estonia not so long ago. Companies build, rent or buy a large warehouse, divide it into many small sections and rent it out to small firms, for example, retailers, for a mini-warehouse or to individuals for storing things that do not fit at home or in the event of a move. However, they are increasingly faced with difficulties – clients do not pay rent, the delay reaches several years. Then the companies turn to bailiffs, who have the right to hold private auctions. One of them, Risto Sepp, agreed to tell DV in detail about this new problem.

Has the economic crisis affected debt? What is happening now with auctions to sell private property for debts?

The trend I see is the growth of private auctions, that is, auctions that are not held by the state, but by private individuals or companies. We can say that Estonians have started selling their property at auctions more often. Some ask to sell a car, an apartment, a computer to pay off debts. But there are other cases.

A popular business model in Estonia right now is for companies to rent out storage space. It’s quite a profitable story, and there are quite a few of these companies. The rent can be 55 euros a month or 160 euros, depending on the size. The only problem is that sometimes tenants don’t pay. And they don’t know that the contract contains a clause stating that all property left for storage is pledged to the owners of the premises. And then the company has the opportunity to let this debtor know – “listen, now we’re going to sell your things, because you owe us” – and turn to me, a third party.

The bailiff arrives at the site, makes an inventory of what is inside, and then puts the items up for auction.

And the number of such requests has increased?

Yes, there have been a lot of such requests, their number has been growing since May. If earlier there was, say, one request from a company per month, then in June there were already five from just one company.

And there are two options here. Either these companies that are turning to the bailiff have just finally learned about their rights, that is, that their property is pledged. But this is not my case – the companies that I have already worked with turn to me, they have known about their rights for a long time. So, there remains the option that people, ordinary people, simply have a harder life in the economic sense. Salaries have become, perhaps, lower, other incomes. Because unnecessary things that you have handed over for storage are the first thing you will start saving on.

Many simply do not know that they will lose their things this way. And then they are informed that there will soon be an auction, for which even a court decision is not required, since the landlord has a legal right to do so.

What is stored in such boxes? Firstly, it is simply curious. And secondly, is it possible to sell it in such a way as to cover the losses of the rental companies?

The boxes contain a variety of things. Bicycles, old documents, books, vinyl records, videos, various equipment, furniture, clothes, shoes. There was also gold, small chains, expensive Rolex watches, knives, paintings. Anything has happened. Usually people use these boxes if, for example, they are moving out of an old apartment that they rented and have nowhere to put their things. Or they all did not fit into the new one. Or if people simply do not live together anymore, and one of them had nowhere to put their things. I saw one small box that contained everything men’s – clothes, shoes, and also everything they need for life – dishes, a vacuum cleaner. I have also seen boxes where they store food – both full packs and open ones that have long since expired. But they store it. Why? Probably the habit of not throwing away food… And no one thinks that the more things, the more space you need and the more you have to pay, and sometimes getting rid of something (selling, giving away, recycling) is more profitable than storing what you don’t need.

If the box was rented by a company, then these are the remains of the goods that the company worked with before. The last thing I remember was cosmetics.

Once upon a time there were professional erotic albums with many young women, but not pornographic. Large boxes, filled to the brim with boxes of these albums, there were thousands of them. And there were even contracts, legally drawn up, about permission to shoot. All these photos were taken 20 years ago, that is, the women who were 18 then are now almost 40 years old.

That is, you can keep everything except what is prohibited by law. You can’t keep weapons, drugs, etc. Or if these were photos of rapes or something else prohibited, then that would be a big problem.

What did you do with these photos?

I showed the boxes with the albums to the police first. Just to be on the safe side. And then I told the company that was renting the box: “Listen, we have to find another way.” Because you can’t sell something like that at auction anyway because of the privacy law.

Yes, these are just erotic pictures and films, but there are not only naked women, for example, but faces are also visible there. And even if at an auction I can darken the face to show the goods, then the one who buys them does not guarantee this and can, for example, use it for blackmail.

These women are from Lithuania, Latvia, Estonia and Russia, they were young at the time and did not think about what would happen in 25 years. And now among them there may be today’s politicians and businesswomen.

Fortunately, this debtor eventually began to pay off his debts.

But more often than not, things are not so exotic. How do you find buyers for them?

A small warehouse can be, in principle, from two square meters to… how many have I seen? The largest I’ve seen was 42 square meters. And usually these boxes are used to the maximum, that is, completely filled from floor to ceiling. We photograph all the items from this box one by one. We open them if there are any small boxes. And put them up for auction.

Usually we sell all the property that was in the box as a single lot. Very rarely do we divide it. That is, there is no such possibility that, for example, I want and will take only the most valuable. No.

The starting price at the auction is determined at the request of the client who applied to the bailiff. But it must be so attractive that already in the first round, which usually takes one month, there are many applicants. Otherwise, we are simply wasting time, and the landlord, to whom we still owe, suffers even more losses due to the idle premises.

Usually there are many people who want to buy interesting things cheaply. And if there are many participants, then psychologically they want everything for little money, but they raise the price during the bidding and eventually offer a very high price.

Who are these buyers? You named such different items. Someone buys vinyl records, books, that’s clear. But if it’s also furniture, clothes, some documents, then I can’t imagine who might be interested in buying such a set at once.

There are both individuals who offer and bid, and companies. The names are repeated quite often. That is, they probably already have their own business plan and are reselling this property.

If it’s clothes and people see that it’s a good brand, suits, for example, then you just have to clean them and hang them on a hanger, and the price will be different. I think the principle is simply to buy cheap, sell expensive.

If you don’t sell for very much, how do the companies that own these boxes stay profitable?

A lot depends on how quickly they contact the bailiff. The first companies that contacted me had debtors who had not paid them for 2-3 years. And that’s a lot.

Then I told them that they should specify in their contract with clients the period when they will apply for the sale of this property. And it should be a short time, that is, two months, three months, four, no more.

I remember the tenant of one of the boxes, he was a Turk, a debtor, a private individual. He no longer lived in Estonia, moved out of the apartment he rented and simply left his belongings in a large box. There was very expensive equipment there, for example, a record player and the vinyl itself, paintings, costumes and shoes too. He already owed 7,500 euros for rent. Can you imagine? We put it all up for auction, the auction was almost over. And on the last day, this person paid off all the debt right before the auction.

Photo: personal archive of Risto Sepp

But if there is little value, then the company is at a loss, of course. For it, in this case, the main thing is to free up the space and rent it out again as soon as possible.

Now people come to me very quickly – it’s six months maximum, and usually it’s 4 months, no more.