Legislative Victories

Posted by Poppy Behrens on Feb 1, 2018 12:00:00 AM

Enhancing Self-Storage Operations Around the Country

2017 saw some positive changes relating to self-storage operations around the country. The national Self Storage Association (SSA), along with state association support, accomplished dozens of legislative modifications in eight states around the country. We wanted to highlight five of them.

California And E-Mail, Online Sales
Assembly Bill 1108 permits self-storage facilities to send their lien notices via electronic mail (also allowing the tenant’s last known address to be an email address). In addition, the revised law provides that a “commercially reasonable” sale in the enforcement of a tenant’s rent default would include a sale conducted via an auction website.

The new law requires that the rental agreement must state that notices may be sent to the occupant by electronic mail and further require that the occupant provide a “written signature” on the rental agreement consenting to receive lien notices by email. The statute also requires verification of the delivery and an “Acknowledgement” of the tenant’s receipt of the email by a variety of methods. If the acknowledgement cannot be shown, the notices must then be sent by verified mail.

The revision to the law becomes effective Jan. 1, 2018, and remains in effect only until Jan. 1, 2021.

Florida And Online Sales, Towing, And Late Fees
Florida House Bill 357 amended its lien law to permit lien sales to be conducted online, added the right of an operator to tow vehicles rather than to sell them, and added a late-fee provision entitling operators to charge a monthly late fee of $20.00 or 20 percent of the monthly rental rate, whichever is greater.

That change took effect July 1, 2017.

Delaware And Online Sales, Towing, And Late Fees
Senate Bill 46 provides that the Tenant be requested to provide information of “next of kin, emergency, or secondary contact” in the rental agreement and that the facility owner must endeavor to contact that party within the process of conducting the lien foreclosure. As per a previous legislative change, such notice can be sent by email if the Tenant consents to such method of delivery. The revised statute also now permits the advertisement of the lien sale to be placed in the “electronic version” of the local newspaper or on a “publicly accessible independent website that regularly conducts online auction of personal property”.

The revised law permits the lien sale itself to be conducted online and includes, as well, the option to tow vehicles rather than sell them. Further, the law sets forth an approved late fee being the greater of $20.00 per month or 20 percent of the monthly rental rate.

The revised law went into effect immediately upon the governor’s signature this summer.

Hawaii And Email, Online Sales
Senate Bill 288 added the right of storage operators to tow vehicles rather than having to sell them, and the right of the facility owner to communicate with their tenants via electronic mail. The Hawaii statute, although permitting email, requires that notices be sent via both email and by regular mail (the notice of final demand, the third notice, needs to be sent by both electronic mail and certified mail).

However, the advertisement of the sale can either be published in the paper or published by a means deemed commercially reasonable. The lien sale itself can be conducted online on an auction website.

The revised Hawaii statute includes additional requirements to request the phone number of the alternate contact and, finally, if the rental agreement provides a maximum value of the goods stored, that limit cannot be lower than $1,000 and must be printed in bold type or underlined.

Nebraska’s First Lien Law
Certainly, one of the most exciting legislative changes to occur was the success in providing the operators in Nebraska a true self-storage lien law to utilize, rather than the previous antiquated law that involved the abandonment of personal property (Disposition of Unclaimed Property Act).

Under the new Nebraska “Self-Service Storage facilities Act”, Legislative Bill 492, operators have been given the right to communicate with their tenants via email, advertise the scheduled lien sale online, and sell their tenant’s property via an online auction website. The new law additionally provides for the ability of an operator to deny access upon default, to limit the value of the property stored and to tow vehicles rather than sell them, essentially implementing most of the updated legislative model currently being added to state lien laws around the country. The new statute does not include a provision on late fees at the current time.

The law went into effect this summer with the governor’s signature.

Remember, the laws are constantly changing. Operators, especially in multi-state businesses, need to keep up with these ever changing requirements. Stay tuned; more are coming!

Scott Zucker is a partner in the law firm of Weissmann Zucker Euster Morochnik, P.C. in Atlanta.