Legal Considerations for Titled Property in Self-Storage: Understanding Liability and Lien Sales for Boats, RVs and Other Vehicles

By Scott Zucker Comments
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Parking Liabilities

At facilities where the operator is required to park the vehicle or boat instead of the tenant, especially due to lack of access to the parking spaces and to avoid the risk of damage to other vehicles or the facility, the operator must carry the appropriate insurance. He should also get written permission from the tenant to move the property for that purpose. Although this type of “valet” parking is not always used, depending on the configuration of the storage facility, it may be less risky for the operator park the boat or RV then it would be for the tenant to navigate the parking areas himself.

Title and Registration Concerns

The enforcement of a self-storage lien for titled property is significantly different from the lien-enforcement action for non-titled property. A boat or RV cannot be sold at a public auction without first satisfying a transfer of title requirement. The transfer of title can be easy if the customer or owner of the property voluntarily agrees to sign the title over to the facility or to the high bidder at an auction. It’s not so easy when the owner of the property cannot be located and the title must be transferred though legal means.

Generally, when a tenant defaults and a foreclosure occurs, the self-storage owner cannot officially sell the vehicle or boat in question until he has first obtained the vehicle title. The process of getting the title can be accomplished a number of ways. Title transfers are usually managed through the governmental entity where the property was originally registered. With a boat, it may be the Department of Natural Resources (DNR) or even the Department of Watercraft. With RVs, it will likely be the Department of Motor Vehicles (DMV).

A facility operator should be aware that some self-storage statutes do not even include a lien for boats and RVs. However, even without a lien, the operator can seek a replacement title for the vehicle or boat by claiming the vehicle has been abandoned at the facility. Fortunately, most state statutes provide specific procedures for obtaining replacement titles on abandoned vehicles and boats.

Commonly, storage owners must first attempt to notify the vehicle owner by Certified Mail, and inform him the vehicle will be deemed abandoned within 30 days if not otherwise claimed. Concurrently, the storage owner must request in writing from the appropriate state department a printout of all possible vehicle owners and lien holders of the vehicle in question.

If the vehicle owner doesn’t respond within 30 days after the notice of abandonment, the storage owner can then file an application either with the governmental agency that holds the registration for the vehicle or with the local court to proceed with the foreclosure and sale of the vehicle. In addition to verifying all required prior notices have been sent, the applicant (storage owner) must provide the agency or court with the DMV or DNR printout of all owners and lien holders of the vehicle he obtained from the state.

All owners and lien-holders of the boat or vehicle are then notified of the application for abandonment. If no objection is filed in response to the application, the abandonment will be confirmed by the agency or court. If the process is handled by the courts, the storage owner should still proceed with sending the regular foreclosure letters and advertisements to sell the vehicle at public sale that he would normally send under his lien procedures, even after the court orders the right of foreclosure and sale. At the sale, the purchaser of the property can get a certified copy of the court order allowing the sale or a new title as issued by the DMV or DNR.

Many self-storage laws are being revised around the country to make the process of handling lien sales for boats or RVs much easier. Some states now allow, after notice to the tenant, the opportunity for the vehicle to simply be towed from the premises in lieu of a sale, entitling the towing company to later handle the sale of the property.

Facility operators who rent space for the storage of boats and RVs should take these legal aspects into consideration. Be sure your rental agreement provides provisions for the storage of boats and RVs, and tenants understand their responsibilities. In addition, read your state’s lien laws and speak with your attorney if you have any questions about your rights and responsibilities when it comes to the storage of high-valued and titled property.

Scott Zucker is a partner in the law firm of Weissmann Zucker Euster Morochnik P.C. in Atlanta. He specializes in business litigation with an emphasis on real estate, landlord-tenant and construction law. He is a frequent lecturer at national conventions, and is the author of Legal Topics in Self-Storage: A Sourcebook for Owners and Managers. To reach him, call 404.364.4626; e-mail scott@wzlegal.com.

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