Interpreting Canada Self-Storage Law: Evolving Legal Landscape Creates Operational Variation

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British Columbia: Choosing Which Act to Follow

Whereas Ontario has a statute specifically mentioning storage, British Columbia, Canada’s third most-populous province, puts operators in a position where they must interpret multiple statutes and pick the one that applies to them. One option is the Warehouse Lien Act; the other is the Real Estate Services Act, enacted in 2004.

An owner-manager in British Columbia who prefers not to be named says his 60-unit, 16 RV-storage facility in a small town adheres to the Warehouse Lien Act. He describes the statute as “really old and not really applicable to self-storage.” But when he started his operation, also in 2004, his attorney advised him to use this statute and align his rental agreement with it.

The owner sees several problems with the act, most notably that it doesn’t specify a timeframe for the beginning of lien procedure. It does specify the timeframe for sending out registered letters to delinquent tenants and how long an operator must wait before auctioning, as well as an auction-announcement publishing requirement two weeks before an auction. However, that creates other problems, the operator says.

For example, what if he hauls all of a delinquent tenant’s goods to the auction site (his auctioneer prefers a neutral location as opposed to the storage facility itself), and the delinquent tenant pays at the last minute? Does the tenant have the right to keep his space? The law doesn’t specify what should happen. In one instance, a tenant paid one day before the owner was ready to remove the belongings from the unit. He said it was very close to being a legal mess.

By contrast, Jay Lynne Fleming, president and CEO of Storage for Your Life Solutions Inc. in Vancouver, says her facilities operate under the Real Estate Service Act. “[It] is much clearer with respect to its process because it deals with physical buildings as rental space instead of warehousing. We as self-storage owners are only in the business of renting space. We do not occupy the space; the tenants’ belongings occupy the space. There’s no reason it’s not rental of property, just like you’re renting an office, an apartment, or a garage for your car,” she says.

Unlike some statutes, the Real Estate Services Act doesn’t allow the operator to take possession of someone else’s goods and sell them. Instead, it allows the operator to charge late fees, just like a landlord would to an apartment lessee. After 45 days of delinquency, the landlord turns the bad debt over to a bailiff. This is similar to turning someone over to a collections agency in the United States.

The bailiff, a private, non-government entity with the legal authority to assume the debt, buys the debt and tries to collect the funds. If the delinquent tenant pays the bailiff, he can keep his space. If not, the bailiff assumes possession of the unit contents, and the facility gets its space back without liability.

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