By Anita Byer and Martin Salcedo
Owners and operators of self-storage facilities understand delinquent and defaulting tenants are part of the business. When collecting money from overdue tenants, they might turn to their state lien laws for guidance to ensure they follow legal procedures for collections and eviction. However, when it comes to tenants who are in the military, operators need to tread even more carefully and follow the Servicemembers Civil Relief Act (SCRA).
The SCRA is a federal law designed “to provide for, strengthen, and expedite the national defense” by temporarily suspending various judicial and administrative proceedings that may adversely affect the civil rights of servicemembers during their military service. This sought-after protection is generally obtained by giving servicemembers additional benefits and safeguards during their military service than those enjoyed by non-servicemembers.
In addition to dealing with default judgments, the SCRA applies to a wide variety of commercial situations, such as evictions, installment contracts, mortgages, residential and motor vehicle leases, and telephone-service contracts. In some cases, the SCRA applies to a servicemember’s dependents.
So, why should self-storage owners and operators be particularly concerned about the SCRA? Consider the following:
- The SCRA applies to servicemembers in every state and can be enforced by the U.S. attorney general in some instances.
- Violations of the SCRA may lead to imprisonment, injunctions and liability for civil money penalties, monetary damages, costs and attorneys’ fees.
- The SCRA includes requirements that are aimed directly at self-storage facilities.
Enforcement of Storage Liens
The SCRA affects how a storage lien may be enforced against a servicemember. Before reading the actual statute, however, it’s necessary to understand the following definitions.
- "Servicemember" means a member of the armed forces, as well as members of the commissioned corps of the National Oceanic and Atmospheric Administration (NOAA) and the commissioned corps of the Public Health Service.
- "Military Service" means active duty in the Army, Navy, Air Force, Marine Corps or Coast Guard; qualifying active service authorizations of the National Guard for a period of more than 30 consecutive days; qualifying active service with NOAA or the Public Health Service; and any period during which a servicemember is absent from duty on account of sickness, wounds, leave or other lawful cause. Note that members of a reserve component ordered to report for military service, and individuals ordered to report for induction under the Military Selective Service Act, are entitled to limited protection under the SCRA from the date their order is received until they report for military service or induction.
- "Period of military service" starts on the date a servicemember enters military service and ends on the date the servicemember is released from military service or dies while in military service.
- "Lien" is defined broadly to include a lien for storage, repair or cleaning of the property or effects of a servicemember, or a lien on such property or effects for any other reason.
Under the SCRA, “a person holding a lien on the property or effects of a servicemember may not, during any period of military service of the servicemember and for 90 days thereafter, foreclose or enforce any lien on such property or effects without a court order granted before foreclosure or enforcement.”
Simply stated, the SCRA requires a lawsuit and an order from the court before a lien can be enforced against a servicemember. Importantly, this requirement extends 90 days beyond the servicemember’s period of military service.
Additionally, in a proceeding to foreclose or enforce a storage lien under the SCRA, “the court may on its own motion, and shall if requested by a servicemember whose ability to comply with the obligation resulting in the proceeding is materially affected by military service: (1) stay the proceeding for a period of time as justice and equity require; or (2) adjust the obligation to preserve the interests of all parties.”
While the intent of this provision is clear, the result may not be. Since the SCRA grants the court broad discretion to either delay the lawsuit or preserve the interests of all the parties, including the servicemember, it’s possible a self-storage operator will not obtain the desired relief.