Bankruptcy-Proof RTO Contracts

People hear “rent-to-own shed” and mentally translate it to “my building,” then bankruptcy hits and the paperwork suddenly matters more than every friendly phone call that came before. We’re joined by Melody Troutman, a longtime operator and recovery specialist who lives in the real world of delinquencies, filings, and hard conversations. She lays out why portable building RTO companies get burned when they deviate from their own agreements and accidentally teach attorneys and customers what they can get away with next time.

We get specific on the mechanics: checking PACER for repeat filers, why a rent-to-own agreement should be treated like an executory contract or unexpired lease, and how clear bankruptcy notification language can prevent your building from being misclassified as the renter’s asset. Melody also explains why trustee payments can wreck your timeline and your math, and how “drop dead orders” can create a clean deadline that puts possession back on the table without dragging you through endless steps.

Then we zoom out to the bigger industry risk. Tiny home marketing, utility hookups, and “living in it” upgrades can collide with contract terms fast, especially in debtor-friendly states. We talk prevention through training, delivery disclosures, refusing repeat offenders, and writing recovery-friendly court orders that protect drivers with forcible entry language.

If you work in shed sales, manufacturing, rent-to-own operations, or portable building recoveries, this one is a playbook for protecting your contracts and your margins. Subscribe, share this with your team, and leave a review with the one contract clause you think the industry is still getting wrong.

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This episodes Sponsors:
Studio Sponsor: Shed Geek Marketing

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Transcript

INTRO 0:00

You're listening to the Friday edition of the Shed Geek Podcast, brought to you by Shed Geek Marketing. At Shed Geek Marketing, we've assembled a hand-picked team of specialists from across the Shed and Portable Building industry to help manufacturers, dealers, and service providers grow smarter and scale faster. From websites to SEO to Google ads, meta-campaigns, content creation, video production, lead funnels, systems integrations, and industry-specific lead-chin tools, we help businesses build real momentum instead of chasing random marketing trends. Today, Shed Geek Marketing is holding down this title sponsor spot at the top of the show, but this could just as easily be your company, featured right here in front of thousands of industry professionals, business owners, and decision makers every single week. If you'd like information about title sponsorship, podcast advertising or our 2026 Shed Geek Media Kit, reach out to us at info at shedge.com. And now on to the podcast.

Meet Melody And Recovery Reality

Cord 0:55

Welcome back to another episode of the Shed Geek Podcast, coming to you today from Metropolis, Illinois. Beautiful and sunny. And I am joined today by the Shed Geek himself in studio, uh helping me do a little uh co-hosting, co-podcasting, whatever you would call it. Uh and today the two of us are joined by someone who is always a joy, whether you run across her at a at one of the barbecues, uh, or whether you're lucky enough like us to get to call her sometimes whenever we're just going down the road. Miss Melody Troutman, um, always a fun conversation to be had there, and we are very much looking forward to it. We've had a little preview already uh in our pre-taping. So, I think we've already discovered uh some topics that we can get into. Uh, but before we get rolling, just a couple of things so you know how to stay plugged in with us. Uh 618-309-3648. That is the Shed Geek uh hotline. That is also Shannon's personal cell phone. Please call, text any time of day or night. Uh we want to we want to hear from you and we want to help you out in any way we can. Our email is info I-N-F-O @ shedgeek.com. Uh, of course, you can go to www.shedgeek.com and fill out a lead form, or you can come and uh connect with us on our Facebook page itself or on the Shed Sales Professionals. As always, we encourage everyone to jump on Shed Sales Professionals. Uh, such a good conversation going on uh every day. Uh somebody has something valuable to add and uh and we really encourage that. If you have anyone uh who is a friend, family, um, someone that you know who is a member of the playing community, we do have a call-in line 330-997-3055, uh, where you can call in. It will hold your place, and you can actually go back in time and go explore uh the last episode that Melody was on and see just how much more fired up she is this go-around than she was last. So, go and check that out. And without further ado, uh thank you, thank you so much for joining us today, Miss Melody Troutman. And uh and tell us, tell the listeners um what have you been up to? I have a feeling you've been wrangling some sheds and some people who are not acting so nice about turning them things over.

Melody Troutman 3:21

Yeah, you're right. I don't get to deal with the um nice one or the ones following the rules or the laws, but we won't talk about the laws. Um you just gotta get things done.

PACER Checks And Bankruptcy Patterns

Cord 3:39

Oh, that's right.

Melody Troutman 3:40

But um, it seems like I don't know, in this industry, one thing that really, really gets me is how um bankruptcies are handled so differently across the country. And what I don't think what the rental companies realize is when they deviate from what their contract actually says, they're setting precedence. Because when these people file bankruptcy, like nine times out of ten, they go to bankruptcy attorneys, and you don't, you know, bankruptcy mills, you don't know how many times I've had a bankruptcy attorney tell me, well, this rental company did this, and we did this on this one. Well, I said, Well, I'm sorry, uh, but we don't do it that way.

Cord 4:27

Right.

Melody Troutman 4:28

And so, then then I proceed to have a contracts class with them, and uh, I'll literally read the contract to them if I have to.

Cord 4:38

So, let's back this up a little, Melody, because uh I think that um just so because I think a lot of our um yeah, a lot of our listeners are kind of separated from this side of what it really means to be like you know, down there nitty-gritty in the weeds of not just RTO, but actually the um I know we're not supposed to call them repos, but the whenever you are going to claim your retrieval recoveries, exactly. So, when you start thinking about um uh bankruptcies, I know that there are how kind of set the scene for us when this happens, has the contract itself it was still like valid, it was still active at the time of bankruptcy. Is that what you're seeing? Or is this well yeah?

Melody Troutman 5:32

Let's back up one let's back up one step further. But the main thing I also see an RTO company doing is when they get a notice, they do not even look at the bankruptcy on PACER. Hopefully, your RTO company is getting a full Social Security number because that's the only way you can uh look somebody up in PACER and see how many times they've filed. I had one the other day, honest to God. She was on her tenth bankruptcy. Oh my goodness. Okay, so have someone in your RTO office, please look up in PACER to see if they're a frequent flyer. Don't just throw it at the attorney and hope for the best. Okay, and anyway, and hopefully trying to be nice. Um hopefully, hopefully, the rent owned contract has been brought into this century and has a very solid bankruptcy notification in it that is very clear to the um attorney. The

Writing Bankruptcy Clauses That Hold

Melody Troutman 6:46

customer needs to give this to their attorney, the rent owned agreement. And mine is explicit, and it's it says that the renter's going to be required to either assume or reject the rental agreement as an unexpired lease executory contract. But if the if they have stopped making their rental payments before they filed bankruptcy on a rent-owned contract, anytime you have an outstanding past due balance on an RTO, it's expired and terminated because these contracts are only a one-month term. Okay, it has to be renewed every 30 days. And so, this my specific bankruptcy notification also says that renter will be required to cure the default immediately in order to assume the rental agreement and resume full monthly rental payments paid directly to the rental company. No trustee disbursements. Anytime you let the trustee make the rental payment, they take a commission out of every single payment. Plus, it's always late. And so they may pay if a proof of claim have been filed by somebody, which you shouldn't have to be doing that. Um the proof of claim might get paid, but your building's not going to get paid off because the numbers aren't going to add up.

Cord 8:21

So, they're not necessarily wanting to liquidate, like it uh it feels like this probably goes several directions because I know how messy, how messy bankrupt is bankruptcies can be. But it sounds like you're saying that you know that they're sometimes they might try and just liquidate this asset because it's a it's a movable structure that is worth, you know, several thousand dollars sitting on someone's property. Well, that's a whole one problem. But then sometimes they might actually try to take it into the bankruptcy trust, right? And then actually make the payments on it so that they don't actually lose control of an asset because they can run numbers just like anybody else can, right? And they can say, well, if we keep making the payments and keep control of the asset, then actually the payments are less than uh payments that are left on this agreement are less than what the value of the shed now is. Is am I am I tracking with you here, Melody?

Melody Troutman 9:21

Well, when you when you said the word asset, this portable building is still owned by the rental company, and it is not, and that is another part of my bankruptcy notification. I specifically state that this is not to be considered a personal asset, personal property, secured property, or secured asset of the renter, and any listing of such can compel the rental company to file objection to the plan and lift a stay and recover the rental property. I mean, it's like me, I rent cars to take business trips. It's like me trying to file bankruptcy on a Hertz rental car. I'm renting it, I have no ownership rights in it. So, how can I put it on the bankruptcy? And no, as long as you do this, it is not going to be in the estate or bankruptcy trust. And when I see a plan that says otherwise, I immediately contact their attorney and I try to be nice and I say, um, looking at this plan, it appears that they have not given you a copy of the legal binding document they signed on this personal rental property. And then I email and them tell them if you don't do this, this, and this to change your plan, I'm doing this, this, and this.

Cord 11:01

But how are you so on top of this, Melody? Because it would seem to me that some people would just obviously not give any notice to the rental company. So, like, what is the point at which you're even able to jump on it? Or are you just basically saying, hey, look, you know, you have to be on top of your delinquencies, like so you have to be so on top of them that you can notice these things immediately, because we know, you know, in this industry, some of those delinquencies can drift into that, you know, 90, 120, you know, category fairly casually when they're hidden inside some of these portfolios.

Melody Troutman 11:41

You know, one of the major red flags is if they are behind and they've not kept any quote unquote payment arrangement um to reinstate, and all of a sudden they call and want to pay off, you better know they're nine times out of ten, they're contacting attorney and they're gonna try to slam it into a bankruptcy.

Cord 12:05

Wow.

Melody Troutman 12:06

That is always a really good red flag.

Shannon 12:10

So, do you think that the like just lawyers and in general, attorneys in general, um, unless they specifically deal in this in this court, they just don't really they're just general, like uh I you know, gosh, like almost like a general practitioner, a general lawyer. I don't even know what the correct terminology is for that, but they just kind of take a case as it walks in the door, but they don't have a special discipline in bankruptcy. Have you found that people who specialize in this thing are a little bit more knowledgeable and they understand what you're saying? You know, the customer's gonna do what they do, but it stops with the lawyer, right? Like they are the ones who make the difference.

Melody Troutman 12:53

What I have found is over the years, coming up on 21 in September, is the majority of your bankruptcy meals depending on what part of the country it's in. They don't know what to do with the rent on a contract and try to slam it. They'll do a cram down and say, hey, we're gonna give you $20 a month for the next five years at 20% interest. No, not maybe five. And uh, no, I don't think so. And then I send them contract, but over the years, several of the ones that I have worked with, they know what to do with it, and they know what I'm going to expect from it. And but it's the uneducated ones, I don't know how else to say it, that really don't deal with these contracts, they don't know where to place it, which is why it's really important for that customer to give that contract to their attorney, and you hope and pray it's got a really good bankruptcy notification section in it. If not, then you're gonna be educating everybody for it's over with.

Cord 14:10

How boilerplate can those be, Melody? I mean, can that can that section? I know, you know, in my experience, a lot of these kind of clausal pieces can kind of, you know, more or less, not to simplify things too much, but can more or less copy paste, at which point I just think, why in the heck are people, why are these not being updated? Like, is this a is this a lack of education? Is this a lack of just sort of uh um attention to details? Like what how have we wound up?

Melody Troutman 14:42

Well, we're thought you should say that some of these files I'm getting, I think the um the rent on contract is from the 19th century and uh from smaller mom and pop shops that just got a hold of a contract somewhere and are just now getting into RTO. Yeah, I really think it boils down to education to where they really don't realize what all they need in their RTO contract. And the thing about it is these sections are made for protection for the manufacturer and for the rental uh the renter. But when they these old, old contract forms that I am seeing, they are so vague, and we are in such a soo happy um time. Yeah, things need to be defined and not be left open for interpretation, get to the point where they have this is what this means.

Cord 16:00

Absolutely. I'm just gonna take the opportunity to look straight into the camera so that our editors have a nice clean cut right here to say, you know, if you are watching this and you know someone who is using a contract that does not have this enhanced language around bankruptcies, you need to get a hold of them right now, send this clip to them. You know, they need to listen to Melody. This is these are easy solutions if you are on top of it on the front end. But on the back end, whenever that bankruptcy clause is not in there, Melody, I mean, how much does that complicate your life whenever you wind up in those situations? I've heard the term uh drop dead order bounced around a lot. I don't know if that's just cowboys, you know, uh getting down to brass tacks. Or what is tell me, like, does this have anything to do with this? These are just things I hear floating around the Shed Geek office when we talk about RTO.

AD- SHED SALES SUMMIT 17:01

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Melody Troutman 17:48

Okay.

Drop Dead Orders And Chapter 7 Rules

Melody Troutman 17:49

Well, what I what I threaten the attorney with if his um plan on the uh deadbeat renter is not suffice. I tell them that um they always want to put their rears, all of the past due in the plan. Like, nope. Um and if I deviate at all and be nice, I will give them two months to cure the default in order to reinstate the terminated rental agreement. If at the end of two months it has not been done, then that's when my drop dead order that I've had my attorney put in, it basically states all bets are off, and it allows me to have the building picked up most times, depending on the courts and uh local rules, without having to file objection to confirmation or lift to state. The language on the drop dead order has varied from state to state. Uh, I've got one that is going to hit August 2nd, as a matter of fact. And so, if they have not completely reinstated and paid the arrears by August 2nd, I've got a drop dead order kicking in.

Cord 19:17

And so, explain and explain what legally that kind of means. I mean, that means that this contract is null and void, that is my property, and I will come and do whatever I please uh with that. I mean, am I getting that? Am I characterizing that right?

Melody Troutman 19:34

Well, when I when I have mine written up, it is like, okay, I'm giving you extra time two months to pay all your past due so that you can assume and resume. Okay, but if you don't, then I have this order sitting over here saying we're done, we're not, we're done messing with you, and we're gonna pick up the building.

Cord 20:09

That's awesome.

Melody Troutman 20:10

That's kind of a very brief summary.

Cord 20:13

Right.

Melody Troutman 20:17

Yeah, now one thing too, one thing we haven't covered either was you gotta watch, you gotta watch chapter sevens because on a chapter seven, they're wiping out everybody, they're not gonna pay anybody, but they want to uh the same thing, they have to assume or reject it, and you need to be listed on that contract, needs to be listed on a part via statement of intentions. I don't ever do re-affirmations; reaffirmations are like doing uh what we just talked about. I'm giving you a couple of months to reinstate so you can assume and resume. And but we're not financing, and so they always want to cram us in with the auto loan or house loan or whatever. Like, no, we didn't loan them any money, we rented them a structure. That yeah, that we own, that they have no right to have no ownership rights in it, no, which it should be stated on the first page of your rent own agreement.

Cord 21:31

Do you think it's uh do you think it is a do you think it's a way to reduce friction? Like do you do you feel like not like having the shorter contracts that just don't have as good a language? Like do you think that people view this as a way to reduce sales friction on the front end, or do you or do you think it's just do you think it is just more simple than that, that people just don't know and so they don't have it?

Melody Troutman 22:00

Think they don't know, which is why they don't have it, but I think they also need to look at it, which they don't. I guess some of them are wearing purple colored glasses, I don't know, and think everybody that gets a building is gonna be nice and not threaten to shoot your driver and or that they won't try to get it for free in bankruptcy. But we know different. And so, I think I wish they would look at every single contract that they're furnishing their dealers. Is do I have enough language in there that is protecting me and my assets from being taken at free or reduced price? And you'd be surprised at what some of these contracts, after all of these years, are saying or still saying. But I don't know. I think some of them don't care and some of them just don't know, or both.

Shannon 23:22

I think it feels like the better job you do. Am I right here? The better job you do in preparation, uh, the less work you have on the back end. But still, yeah, your desire, your business, uh is not just to help out once it becomes a problem. You're actually trying to solve this problem and sniff this problem out in the contract initially. So, so why not, you know, there's some things you can't do. Like for whatever reason, you know, we are having a hard time educating the public as a shed seller, if you even desire to as a shed seller, for them to understand the difference in rent-to-owned versus traditional finance. It's not a federally regulated credit sale. It is a, you know, but like imagine that in your sales pitch. You know, you just start to create so many barriers to entry whenever you're trying to sell something. And a lot of people say it's not my job to educate the public, you know, when they're buying a shed on a rental agreement on all of the nuance of rent-to-own versus traditional credit sale. I mean, I still get messages from buildings I sold where people are like, hey, I finally got that paid off. I thought it was going to help my credit. I don't, I don't even know like where to start. Like it's like we've never discussed that this is going to help your credit. There is a mismatch in understanding whenever people go out to purchase, which I think is the fight that we've had litigation-wise for years for a long time, is educating the public that when you rent something and you rent a shed, it's different than when you purchase a car on finance in most cases. I know they do some buy here, pay here stuff, but you know, it's a little different than TVs and air conditioners, you know.

Melody Troutman 25:13

Uh but that's what they that's what they uh that's what they know. They think it's like a TV or air conditioner. But at the same time, when I first got into this, and I was handed an RTO contract to be on my lots, my dealer lots, and I read it and I was like, whoa, this doesn't even pertain to a portable building. And I called the owner of the company and I said, I have questions about this contract, this, this, and this. Can you explain it to me? They couldn't even explain their own contract to me. And we still to this day have that. These owners, manufacturers, even management companies, they don't even know how to explain what their call center people are supposed to enforce.

Shannon 26:16

So,

Training Sellers To Follow Contracts

Shannon 26:17

where does this start? Where do you feel like from an ed like I'm big on education and entertainment? Like we love to laugh and joke and cut up, but part of these conversations need to be, you know, educational. That's why we talk about other people's experience. You've got a wealth of experience through your uh real estate, you know. Uh, you've owned a rent-owned company. Uh, you work with drivers, you work with manufacturers all the time. I had somebody after you came on the show last time say, Hey, thank you for introducing me to her. We started working with her. Uh, she's great, she gets things done, you know. And I think that uh that's kind of the crux of what you started with is you know, like uh getting the building back, solving the problem, recovering the building. That's the that's the key. But how do we take a different approach, Melody? Do you have any thoughts on it, on the industry as a whole, whether it be manufacturers, dealers, management companies, like where can we do better? Where can we be better be better?

Melody Troutman 27:19

It all goes back to education and having a solid contract. That when I look at a contract, I'm like, can I enforce this in court? Or if it comes to it, is the attorney going to be able to enforce it in court? And so I have gone to some different places, clear to the manufacturer, their salespeople, things like that, but it's gotta start. At the manufacturer, and they need to know what kind of contract that they're having, their dealers and salespeople do, and it's still going back to most of the time your um what do you call them? The salespeople aren't being trained by their boss very well. Yeah, I'm trying to be nice.

Shannon 28:18

But do you offer those services? Like, is that something you do? Will you go to a manufacturer and educate that dealer network on these things with the cooperation of the ownership?

Melody Troutman 28:32

Yes, yes. And some of them pay attention, some of them don't.

Cord 28:41

But even if all you take from it is just getting the actual language in. I mean, I totally agree with you. There has to be, you know, your average run-of-the-mill dealer needs to be able to talk just as fluently about an RTO contract as they do about, you know, 16 OC uh, you know, studs or whatever else, right? And so, I mean, that's a big part, but at the bare minimum, I mean, have the document that is being signed be proper and legal, right? Like, even if the salesperson, I mean, you know, as we well know, some salespeople um, you know, may not be as fluent in the building itself either.

Melody Troutman 29:25

But at least some of yeah, some of the sales managers are just training their salespeople. Here's the blanks, have them filled in, and you don't know how many customers I've talked to that have said, Well, I told my salesperson this, this, and this, you know, especially when it comes to tiny homes and I'm gonna live in it, and your language on that contract says no. And what do I tell him? I said, that conversation between the salesperson and you, there's no proof of that conversation. I said, the only proof of the legality of everything is that black and white document that you signed, and that is the only thing that holds up in court. None of this he said, she said stuff. I even had, I was in a bankruptcy court in Texas, and the customer told me, He says, I'm fixing not be nice. And the customer told me, he says, Well, uh, my bankruptcy attorney told me I could get this building for free. I said, Well, your bankruptcy attorney is in India, you're not gonna get it for free, and you need a new attorney. I mean, that goes back to attorneys not knowing what to do with these contracts, and it's just about I tell salespeople, and we use this in real estate, if you don't know what else to say, just tell them if you pay, it stays, if you don't, it won't. Kind of that simple. Yeah, so if you don't reinstate every 30 days, it's not gonna stay because you the contract says when you default, we're entitled to immediate possession of our personal rental property.

Shannon 31:21

Yeah, rent owns been out here for a long time, right? Like rent owned different products. Why has sheds yeah you know, yeah, buildings at structures of any kind, seemingly, at least maybe it's because we're in it so much. Maybe I have a skewed point of view, but why have they seemingly carved out uh some separate standing whenever it comes to a TV or a washer and a dryer, an errands, or a rent-to-own or a rent a center or something like that? What like when it started, were there steps that were miss taken uh in sort of launching a rent-to-owned program throughout the shed community? Because now there's this race to win business, so it oftentimes it's like let's get a lot open as quick as we can.

Melody Troutman 32:14

And uh no training, do yeah, yeah.

Shannon 32:19

Like, I mean, I you know, I don't want to not be nice too, but like that's the that's the thing that you end up hearing so often.

Melody Troutman 32:29

I again you're if your manufacturer is not training your sales manager, and your sales manager is not training the dealers, I mean it gets dropped every step of the way, and I don't know how many times you sit in court and listened to some of these cases, but I have a hard time biting my tongue, and usually after court, I have to have it surgically reattached. But anyway, it it's you just sat there shaking your head. It's like, how do they get that out of this black and white document? It's like they totally ignore everything that is in that contract. I think it's it starts from the very beginning.

Cord 33:18

Part of it is the perceived permanence, part of it's just a little bit of like human nature, right? There is a building in a backyard, and you perceive it as being permanent. And you know, I mean, these days, I mean, with mules and specialized trailers and everything else, that thing is anything but permanent, you know. We know we know from the videos that you can pick that thing up in about T minus 30 seconds and get it on a trailer in a pinch.

Melody Troutman 33:45

Wow, you know, and I tell yeah, I tell drivers, I say, back up, take off, and see what falls off.

Cord 33:53

Right.

Melody Troutman 33:53

Just get it.

Cord 33:54

Exactly. And but you know, uh, there's an obviously um, you know, I don't think it's uh it flies over anybody's head that like this is an industry that has um grown up, um you know, primarily kind of led by both those in the um you know plain community, Amish or Mennonite, um, along with just kind of good old boys. And I think that the combination of those kind of groups, obviously for religious reasons, um, you know, the Amish and the Mennonites, you know, kind of do not want to partake in the laws of the land. And so you have like an obvious gap that appears there. Um and then on a good old boy side, you know, I know this from personal experience, I may have been called a good old boy a few times myself. Um, you know, maybe they just don't um really care for the laws in general, you know, and so and so the combination of those things, but um, you know, to me, the first step back to Shannon's question of where does this education start? I mean, I don't know if we have any uh uh, you know, listeners or organizers of the NSRA, but to me it would start with uh Miss Melody here in a 6 p.m. slot saying these hard truths to a room full of people who can start to implement some start to implement some wider change. Um, you know, but I do think that's what it that is what it takes, right? It it takes a little bit of that just kind of looking, looking straight in the eye and saying, look, this is this is causing problems. And at the end of the day, this is a real threat to our industry.

Melody Troutman 35:31

You know, so much of the industry that education could be so preventative, but they're just it seems like the industry is just so set on, well, let's just teach them how to be a good salesperson. Okay. Um, I want to be a good real estate agent, but if I don't know what my contract says, I'm in trouble.

AD-LUXGUARD 35:58

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Shannon 37:26

Being a good salesperson is part of that.

When Rent To Own Sounds Like Ownership

Shannon 37:36

You know, I don't know. I mean my mind starts to wander to things like uh, you know, the vernacular that we use, rent to own. Does it just need to straight be rentals? Like, should the language change to where you hear ownership, you begin to think, like Cord said, that a building that goes in my backyard is mine, it's perceived as ownership. They don't even realize as many buildings I've sold, and not because I've promised someone something different, it's because the sales cycle didn't allow enough time for me to get in the nuance that, hey, this is a rental agreement. I mean, we discussed it as we went through the contract, but sometimes these customer interactions are 15 minutes. They're ready to get one and get out, and the sales cycle is so short, and you're trying to slow them down long enough to say, hey, I want to get some of these details in here. And even when you tell them, it's as you said, it's in the dust. That conversation's in the dust because it really still comes down to what they signed.

Melody Troutman 38:32

What you just said, as many buildings as you've sold is of many buildings that you have rented. As you've rented more buildings than you have sold.

Shannon 38:44

Yeah, I have not even changed it in my own language. I've tried to go with recovery and get away from repo. Uh, but changing that language to rent, because you clearly understand when you talk to a person, and I have sold like this before. Uh, I have rented like this before, Melody. Um, where I've explained to a person that uh that uh, you know, if you moved here to our little community in Metropolis and you were gonna work for nine months, you would not buy a house, you wouldn't purchase a house. It's not really worth it. You're gonna rent temporarily because it's just you know gonna be a better money saver. Now, long term, you know, you may want to purchase a home where you're gonna be for 30 years because you see more value in it than renting. You're renting this building. Just the same as you would rent a home, you're renting this building because people seem to understand at the basic level renting an apartment versus purchasing a house. And if I can make that correlation, that seems to register that like you're renting this like a port a potty. We're gonna leave it here every month as long as you keep paying. But if you don't, we're gonna have to come pick it up.

Melody Troutman 39:59

When you said renting a home, that brings me to another part that's a little bit off of bankruptcy. But anyway, especially when they're living in it, have modified it, connected it to utilities, and on the bankruptcy try to claim it as the homestead. Um, I stress to the attorney, there is not a landlord-tenant relationship whatsoever between the rental company and that renter. And we're not going to establish one. I don't care what all you've got it connected to. That is not a tenant rental agreement.

Cord 40:47

Now, now do you put do you put some of that language like non-modification language into your oh oh yeah.

Melody Troutman 40:57

Oh yeah. Let me see here. I've got it handy.

Cord 41:02

Because that may just beg the I mean, look, there is so much crossover. I mean, we've been talking with lots of people about, you know, um, I think most shed companies are now offering the upgrades, right? Uh closed cell insulation, electrical package, you know. I mean, when you're offering those packages, there's an assumption. I mean, if we're just cutting to brass tacks, and I mean this may, you know, maybe enough people have listened for their 30 minutes and they've tuned out. So maybe we've only got a few listeners left here as we get, you know, to the 45-minute uh part of the episode. But if we're just being honest, Melody, should all of those units that there is at least a presumption that there's going to be utilities attached, should those only be eligible for finance agreements?

Melody Troutman 41:52

That that right there, some of those options are in direct contradiction of the contract, which says can't be connected to water, sewer, electric gas, TV services, nor shall it be connected to or otherwise affixed to any real estate or another structure. That's and not intended for human occupancy. I am waiting on somebody to get a bee in their bonnet in one of the states that is very debtor-friendly, and for an attorney general to get a hold of it and basically accuse in marketing a bait and switch. But you can live in it, and you cannot connect it to the utilities even if they send it to you with the mini split until you pay for it. And then that's where you're gonna have attorneys arguing.

Cord 43:06

That's

Utilities Tiny Homes And Homestead Claims

Cord 43:07

a huge now. I mean, that's it is that part of the market has gotten really big in the last, I mean, I guess you'd say since the COVID era. I mean, that that sort of upsell packages, I mean, you know, like that's but you're right. I mean, you know, at some point you go from the perception of permanence to permanence, right?

Melody Troutman 43:31

Like at some point that's where that's where um I mean, if they're sitting there telling you they're gonna live in it, you need to switch them if at all possible, if it's available, from an RTO contract to some type of finance contract, or else you're gonna have problems in court.

Shannon 43:52

We we've even had to watch that uh with finance and with marketing copy. I mean, if you go sell insurance, you have to pass. State boards because there's certain things that you can say and there's certain things you can't. Now, luckily, we haven't got to that point yet where you're going to have to start watching your marketing copy when you say tiny home. Home indicates a house, home indicates a homestead, that you can live here. So, now you've set a precedent that said, because I sell a tiny home, that it is qualified to be uh livable and habitable. Um this is a shed, it's not meant to be habitable. With that being said, we know that it's impossible to police every building that you put out on rent month to month. Uh but I am curious your thoughts on if they're telling you up front, because I have a I have a story where we did have a driver get a gun pulled on them. I really didn't want to rent this thing to the person. Um I yeah, I don't even want to say where it went, but let's just say, you know, I mean, like I started getting accused of things in the sales process that made me say, okay, fine, let's get it done. I was looking out, look, I become a little makeshift um, I become a makeshift uh uh money manager as I was a salesperson. I start like going through the details with them. This is a 16 by 60. It was a building that came back on recovery because the lady found out she had cancer. They were renting it, did a really good job. Uh, you know, uh they were living in it. We suspected they might be the 16 by 60, but they actually did really good electric work in it, or what appeared to be, right? How do you know? Um, and then this this next couple comes and buys it, and I'm really trying to talk them out of it. And people were like, you know, especially my anybody I worked with was like, why do you keep talking people out of buying buildings? I was like, Well, I'm trying to talk them into making good decisions. I don't know that I'm trying to talk them out of buying a building, I'm trying to talk them out of buying this building or living in the building because I got the impression that that's the direction they were gonna go. What are your thoughts on denying that service?

Melody Troutman 46:03

Well, on that, because um how do I put this? I don't want to say a normal rent-owned customer, but anyway, they're they can't afford they either can't afford a regular apartment or their credit's so bad that they can't even rent a house, and so this is their only option, it seems, but um they're looking at the payment, but that's I do think that the salespeople are skipping that. It's like I don't think they're realizing the renter is realizing how much of uh real renewal payment they're gonna be paying, and then at the same time trying to quote unquote do all of the improvements so they can live in it. Most of them are in the situation they're in because they don't know how to do budgets, they usually don't have a steady job, and they're looking at this as a fix for a home, and I don't think they have taken into account everything like you had just said, um all of the funds.

Shannon 47:28

So, in that case, is the man is the manufacturer in a sense its own worst enemy? Whenever you bring on some sales uh locations, these sales locations can't wait to get their percentage, so they're willing to uh overlook the fact that someone might be living in it and just get it sold, even though the 16 by 60 might be coming back in four months or eight months or 18 months.

Melody Troutman 47:55

And your driver can tell when he delivers it, your driver knows when he's gonna be back. I mean, we know that. Normally in certain areas, they don't ever pay and they keep it until they're taken to court and it's picked up, and then they move on to the next manufacturer.

Shannon 48:20

And for those who won't take them to court, what what's the option? For those who are unwilling to go with a writ or you know, use the legal service, uh, and essentially just give the shed away for what can you do.

Melody Troutman 48:36

Yeah, it makes it makes it bad on other companies that don't want to give their building away. And I have been known to say, if you want a free building, go down and see so-and-so, they won't do anything about bringing it back. I mean, it's uh this company, this company, uh no, you're not gonna get it for free, and I am gonna get it back. So sorry, I was bad.

Shannon 49:08

There's only there's so many stories that I know that you've just encountered on the road. Uh, of course, I see you active on the SSP page, the shed haulers page. You're a you're a champion uh of the shed haulers uh over there. I see that you're constantly looking for somebody to go find. You're giving give you're giving people work, but I think if you really had your way of solving it here, you would you would you would an ounce of prevention is worth a pound of cure. You would solve these things before they become an issue.

Melody Troutman 49:42

Exactly. Exactly.

Shannon 49:44

But you also know that's not gonna happen. What about APRO? I'm

State Statutes APRO And Market Risk

Shannon 49:47

sorry, we're going long. I know we're already 45 minutes in, but uh what about APRO? Do you attend APRO? Do you do you look at them as uh, you know, this they're I've viewed them so far as a governing body of all rent to own? And I know a lot of the folks from the NSRA or the industry go to it. I know the NSRA is kind of cut out to be our makeshift mini version of APRO, if you will. Is that something that you feel like uh you go to? Should manufacturers you know attend there? Should they look into the greater laws of you know how APRO is 50 different states with different rent-own, you know, whatever uh laws? What's your best advice, I guess?

Melody Troutman 50:35

I did I do have on my computer, and I'm trying to remember who put it out, that it lists all the states, and for each state, it does list their RTO statutes pertaining to that state, and all you have to do is click on it. Uh, I have tried to tell people about this before, but you like can't even find it anymore, so it's a good thing I saved it. So I don't know where that information went to or got buried, but it sure would be. I just got through research in a couple of states that I personally, if I had a rental company, I wouldn't be buying contracts in that state just because I look at everything through a liability standpoint of what is their small claims limit in court? Will I be able to file it in small claims? And if not, uh how much is it going to be in attorney fees to get that building back? And one company I talked to concerning one state, I'm like, there's you're just giving the buildings away in that state. And I said, is that just a tax write-off for you? Yeah. Me, I'm over here having a heart attack. You know, I'm like, oh my word, you know, why don't you just put free buildings out on your lots and just give them away like that instead of paying a commission? But anyway, that's just my thought. That's why they make the big bucks.

Cord 52:13

Well, yeah.

Melody Troutman 52:14

But whenever go ahead.

Cord 52:18

Uh

Delivery Stops Repeat Offenders And Fraud

Cord 52:19

it makes me think how many different avenues there are for the out. You had kind of you had kind of said, you know, that the driver knows when they pull up to that location. Um, you know, I guess my question would be, I mean, I know it makes things awfully messy, whatever that the relationship is between the manufacturer and the dealer, but you know, if that uh and even potentially the RTO company, I guess, depending on whose interest that driver's looking out for, but I mean, if they pull up, like, is there recourse to refuse to deliver a shed that that person has paid a down payment on? I mean, is that realistic? Can you refund and not deliver? Is there a clause that's about you know something to do with site preparation or something like that that could basically give the driver a way to be like, oh my goodness, like uh, you know, and I and I guess it all these all these different pieces are so disparate, right? We've this industry, I mean, there are some companies that have now completely gone vertical and they can control this top to bottom, and that's great for them, but you know, for the majority of companies out here, they just don't have the resources, you know, to have uh drivers on staff plus the you know, manage the RTO in-house and all that. I guess what I'm kind of asking is like at how many different places in this process could somebody just say, you know what, okay, I've seen enough right here. Is that possible, Melody, or once that contract is signed?

Melody Troutman 53:55

I have seen it didn't matter the size of the company, you can have disclosures that you have the renter sign that explains the delivery requirements, and that uh, you know, site prep requirements, and that if the driver goes out and those items have not been taken care of and it's virtually undeliverable, that uh the building will be brought back to the lot. And yeah, they the money can be refunded, it all depends on what their contract says. I've seen some of them say that if they don't cancel the order or take care of things within three days, no, you're not gonna get it, you know, your um first month's rent back. But all a lot of that could be avoided. Also, it's like, how many times do you keep taking some manufacturers? Just keep letting the dealers write up a contract on somebody that you've already recovered buildings from three to five times. Really? Why do you keep doing that? Just so you can say your sales numbers are at a certain point.

Cord 55:20

That's not that's not a credit check. I mean, we've had these conversations with uh Shannon. Um, oh goodness. Uh oh gosh, now I'm not gonna be able to come up with data true. Data true.

Shannon 55:33

Is that data true?

Cord 55:34

Yeah. And you know, the sort of metric is basically um using an outside proxy for credit worthiness. But that's not an outside proxy.

Melody Troutman 55:47

I call it a deadbeat list.

Cord 55:50

That's not, but that's not even, I mean, you know, even on the legality side, that's not an outside proxy for credit worthiness. That's the same thing as saying no shoot, no, no shoes, no sir, shirt, no service, right? That is a person making a decision based on their own company's experience, you know, uh, with uh a customer. That's not that's not equivalent to any kind of a credit check. And I'm with you. I mean, you know, I don't know if you have to, you know, whatever. It does it technically have to be in an Excel sheet or on a piece of paper, or can people not recognize? My goodness, we have seen that name three times already.

Melody Troutman 56:30

Yeah, and I mean, I there's several companies that I will email and I'll say, hey, check for this name or address in your database. And you know, uh, if it's in a certain area, uh make sure you don't buy any contracts or let your dealers know you won't accept any contracts with this address or this name. And so, and a lot of times when I've done that too before, they say, Oh yeah, they got me for two buildings, or oh yeah, you know, these people are making the rounds and working the system. Yeah, and so and the bad thing about it is you have some of the drivers that are involved in that in certain areas, unfortunately.

Cord 57:20

Well, they almost have to be. I mean, to for some of these sheds to abscond so quickly, you have to have the equipment to do it, which I mean, you know, it's not like a mule sitting on the side of the road. That's a specialty piece of equipment, you know.

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Melody Troutman 58:32

They're literally now, I mean, they're these people are going to also go into dealer lots, taking pictures, advertising them on Facebook for sale, writing up a fake contract in somebody's name, and getting free delivery to the address, only the place they're delivering it to.

Shannon 59:09

I've heard even worse stories. I've heard of even beyond drivers being part of some of these situations eventually. And I can't I can't pay my bills, you know, on the on the truth of these, you know, rumors, you know, so I have to go with what I know and not what I hear. Um, Lord knows there's enough rumors to go around. You know, we could write a book. Uh probably just between me and you alone, be a be a bestseller, but we might get sued a bunch of melody, so we better not do that.

Melody Troutman 59:40

Um, you know, I'm just telling you what I see with clients.

Shannon 59:45

I know. I think it's bad enough with the client. It's worse whenever the industry partakes in it. But you know, um it is it is I think good wins in the end, and I think that you just have to keep putting the you know your right foot in front of your left foot and nose to the grindstone, and you're gonna figure it out. But what are the legal percussions? You know, I don't know. I I don't know about blacklist, I don't know uh, you know, about right of refusal whenever it comes to service. I have to admit that like I would love to be educated on that, and I would love you know to take courses. A lot of your contracts I don't care where it's at.

Melody Troutman 1:00:26

Yeah, a lot of your contracts say that the lease has to be approved, the rental agreement has to be approved uh by the rental company before it's delivered. Does that happen? Not hardly ever. And then we have these problems, but that language is in there. It is in there.

Shannon 1:00:47

Do you think that it's just like gotten so competitive that it's just you know, we're what are we willing to look past to win?

Melody Troutman 1:00:58

And who's doing the looking and it and it and it's like it's like I told this one person, I seen you drowning, and I threw you a life jacket, but you cussed me out instead.

Shannon 1:01:18

You know, you're trying, yeah, you're trying to help, but you're not, I don't know, maybe sometimes well, you do offer these services, which for one, I think that's great. Uh that you do. How do people get in touch with you? How do people find you? Like, you know, we'd love to advertise with you, we'd love to put your name out there, get some blog content out there. Um, I mean, I love that you organize the Oklahoma BBQ. There's more to you than even what people see here just on the podcast in the industry. You've been in it for years. Uh, you are, and I said this before, and I'll say it again off-air. You are, in my opinion, opinion, uh true definition of what I see in terms of like women leadership in the industry. Um, I believe that you are bold, uh, and I believe that you are uh a force, there's no doubt, uh, because you take the time to know your stuff. And look, I don't know what the legal you know requirements are here, court, if we need to do a whole, you know, this episode is a disclaimer. This episode is not legal advice, uh kind of thing.

Melody Troutman 1:02:30

But I yeah, no, I'm not an attorney. I've just learned by mistakes and know how to enforce a contract. And it's like I tell I have a really, really good friend that was in RTO, sweetest people ever. But they had a voice dripping with honey, and I said, you have got to be firm, and you know, be firm. You need to have a schedule of um how can I put this? You know, uh a schedule of, you know, hey, you're gonna get this, you know, if you're 30 days past due, you get this, have a schedule of what you're gonna do and stick with it to, you know, get it reinstated, solve the problem. But there are some people, be honest with you, that are just too sweet and nice that shouldn't be in the RTO because they'll give you the shirt off of their back, which I get very upset about because when people know that these tight people are that away, they take advantage of them.

Shannon 1:03:47

They'll take all their shirts because they have no there's givers and takers, and trust me, they will take and take and take and take and take, and they have no shame about it.

Melody Troutman 1:03:57

Yeah,

Court Orders For Safe Recoveries

Melody Troutman 1:03:58

oh, and one thing we didn't cover too is on your writs or order delivery or whatever the court and state calls it. Um I never let the attorney just come up with what they want because over the years I've had too many deputies and constable meet the driver and say, Oh, we can't do that because the gate's locked or whatever. I have, I always have them put, I request forcible entry to remove any locks, gates, disconnect utilities, any obstacles, including not limited to threatening animals, anything that obstructs the path of the recovery driver to be able to get that personal rental property in order to recover it safely. I'm gonna be dealing with a major problem tomorrow at one o'clock, because the attorney was not allowed to put that kind of language in their orders, which I'm preparing for the worst and hoping for the best, but that's something else. Whenever you have an attorney, I don't think nine times out of ten that the rental companies are even reading the petitions that the attorney is filing for them or reading what they're asking for in the judgment or these writs. Again, educate, educate yourself, look at everything and don't just leave it up to their discretion and hope that they're doing the best for you because some of these attorneys, I've just been shocked. I'm like, why didn't you ask for this? Why didn't you ask for that? You know, number one, yeah, you can ask for the money, but the goal is always go after possession because if they were going to pay. They would have already paid by now. And that's why you're in court in the first place. They wouldn't pay.

Cord 1:06:06

Yeah. I mean, and that's just a um an everlasting piece of wisdom. You know, I mean, that's just the truth, and it will always be the truth. And there are um, you know, obviously we uh we pray for people to change their ways, but people are people, and you know, you just have to be able to move forward. So um, Melody, you always offer so much wisdom to the podcast, so much wisdom to the industry. Um, I hope that someone is listening because um, you know, I do think that you need to look down, look over the top of those glasses, uh, and look at look at some look at some people uh a little stern uh you know from a breakout room or from a stage or whatever that might be, because um, you know, this is the kind of information that that uh allows the industry to actually um mature, right? And operate in a formal business like way that keeps everybody happy and everybody fed and uh and the industry moving along.

Contact Info And Final Takeaways

Cord 1:07:13

So, the best way to reach out to you is at the melodytroutman@yahoo.com. Is that the best way for people to reach out directly?

Melody Troutman 1:07:22

Yeah, 479-841-4575.

Cord 1:07:28

Very good. So reach out, reach out to Mel directly. Um, you all know you can always reach out to us. We'd be happy to put you in contact, uh, happy to make that connection uh over uh phone or email or whatever that might look like. Um, and we will have a clickable link uh in the newsletter accompanying this episode. So, please check out Melody. Uh and Melody continue to do good work and keep us informed uh and give us a little bit of a stern talking to whenever we need it, you know.

Melody Troutman 1:08:01

Here's one more stern talking to. If you have sales reps, their bosses need to be telling them before they hire a salesperson, please vet them. So don't you don't hire um a dirty dealer.

Cord 1:08:20

Right. Yeah, yeah. Uh maybe there should be a list for that too. Oh gosh, we can't. Another disclaimer.

Melody Troutman 1:08:28

Yeah, yeah.

Shannon 1:08:29

That goes even beyond uh customers, doesn't it?

Cord 1:08:32

Yeah. Well, thank you so much, Melody, for joining us today. Uh, we've thoroughly enjoyed it as always. I was writing down uh I was writing down ideas for episode names, uh, and I thought I thought it'd be funny to put uh something in the episode title that's something to the effect of uh this may be a bit technical, but wow, uh what an informative podcast on RTO, something like that.

Shannon 1:08:58

Because we're in the I'll tell you what, but my goodness, I remember I remember the episode title from the last one, the building bounty hunter is what we came up with. So uh that was a lot of fun. I do really appreciate you. I've just getting to know you. I love going to the Oklahoma barbecue, it's maybe the only one I've been to consistently every year. Love all the rest of them. Trust me, I do. Uh they're a blast. But uh, it's always a joy to see you and Travis. And uh I think you guys just put on a really good barbecue out there. And you know what? We eat like kings when we're out there, and for some reason, my wife seems to have the ticket game figured out because she's walking away with I look, I don't even buy me tickets anymore, I just get them to her. She wins everything. I don't have any luck. We had a truck full of stuff coming back, and I was like, How do you do that? And she's like, I'm just lucky, I guess. I tell her, I remind her she has me, Melody. So, you know, she must be away happy. Yeah, yeah. I can't win nothing. I want a hammer. I can't win nothing at those things. I just spend all the money on her. I tell her, Go, you're gonna clean up. But uh no, I really mean it when I say appreciate what you guys do. It's great, you know, you build community in the industry. And honestly, I mean, I how much more can we, you know, explain that like if you actually do a good job, you're almost out of business. Like you're trying to help people, like that's the whole thing here. You're trying to eliminate problems. And I don't know, there's just, you know, there's an educational piece here that we're missing. Maybe we just need to have you on more. I feel like I roped you in already once or twice. Maybe we can get you on here more often. Don't answer that live. Don't answer that now.

Cord 1:10:46

Oh, no problem.

Shannon 1:10:47

At least say no, at least have the decency to say no to me when no one else is listening.

Cord 1:10:53

Well, again, thank you, Melody. Thank you, Shannon, for jumping in and co-hosting. Thank you all for listening. We hope that you have had just as good of a time and learned just as much as we have today. And we look forward to seeing you next time on another episode of the Shed Geek Podcast.

OUTRO 1:11:12

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