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Self-Storage Auction Advertising: Legislative Changes and Opposition from the Newspaper Industry

By Jeffrey Greenberger Comments

This has been a busy legislative year for the self-storage industry. At the time of this writing, at least six state lien laws are in the process of being updated. One of the changes advocated by the state associations is the removal of newspaper-publishing requirements surrounding lien sales. The reasons for this are many.

The most important is the expense of newspaper advertising, particularly in a larger city, and especially in a state where the operator has to include an inventory of the sale goods in the advertisement. The costs for this can often be astronomical.

Second, the newspaper-advertising requirements in most state statutes are confusing, and there’s concern that a mistake in an advertisement or the placement of an ad might lead to a wrongful-sale lawsuit. For example, in California (before this year’s change), the requirement was to publish an ad in a newspaper in the “judicial district” in which the self-storage facility is located. California operators scratched their heads for years trying to find judicial-district maps so they could verify the right newspaper in which to advertise.

In other states, the requirement is to use a newspaper of “general circulation.” Depending on your state, this may be a newspaper of record, which can be as simple as the local newspaper or complex like an in-house court-index newspaper. Beyond this uncertainty, advertisements in newspapers of “general circulation” often are not the best place to advertise if you want to attract bidders. Thus, the advertisements are a waste of time, energy and money.

Another issue is newspaper availability. Many newspapers are folding today, so there may not be a “hard copy” newspaper of general circulation in some self-storage markets, making the advertising requirements impossible. This year the requirements were reduced in Colorado and Tennessee. Arizona, California, Michigan and North Carolina made changes to their legal advertising requirements last year. Michigan was successful in allowing for advertising in the Web version of a newspaper or another publicly accessible website.

The Battle With Lobbyists

Self-storage associations in several other states, including Florida and Illinois, tried to make similar changes and ran smack into lobbyists from the local newspaper association, which opposed them. For the most part, the argument from the newspaper industry is self-storage sale advertisements are legal advertisements and must be run as any other. Think about it: When the newspaper has a monopoly, self-storage advertising or legal notices are probably among the last good profit centers left in a newspaper-publishing business.

Ultimately, the Florida bill failed to pass this year, and the Illinois bill passed without the desired changes to the advertising requirements. Meanwhile, the California Newspaper Publishers Association has sponsored a bill to “undo” the change that was passed last year. CNPA wants to return to the “old way” of advertising in judicial districts.

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