Military Risks for Self-Storage Facilities: Limitations and Waivers Under the Servicemembers Civil Relief Act

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Differences From State Lien Statutes

What makes the SCRA’s provisions significant is not how they restrict the enforcement of storage liens, but how they differ from some state’s statutory mechanism. In Florida, for example, the first step requires the tenant to receive written notice by personal delivery or Certified Mail to the tenant’s last known address. This notice, which must also be posted conspicuously at the self-storage facility or on the unit, must include:

  • An itemized statement of the owner's claim, showing the sum due at the time of the notice and the date when the sum became due
  • The same description, or a reasonably similar description, of the personal property as provided in the rental agreement
  • A demand for payment within a specified time that is not less than 14 days after delivery of the notice
  • A conspicuous statement that, unless the claim is timely paid, the personal property will be advertised for sale or other disposition and will be sold or otherwise disposed of at a specified time and place
  • The name, street address and telephone number of the owner whom the tenant may contact to respond to the notice.

The second step requires an advertisement of sale be published once a week for two consecutive weeks in a local newspaper of general circulation. If no such newspaper exists locally, the advertisement must be conspicuously posted in at least three places in the same neighborhood as the self-storage facility for at least 10 days before the sale. Such advertising or posting cannot start until after expiration of the time given in the notice, which cannot be less than 14 days.

The advertisement must include:

  • A brief and general description of what is believed to constitute the personal property contained in the storage unit, as provided in the rental agreement
  • The name of the tenant and the address of the self-service storage facility where the unit is located
  • The time, place, and manner of sale or other disposition, which cannot occur sooner than 15 days after the first publication.

Note the contrast between the SCRA’s need for court approval and Florida’s quasi-self-help mechanism. The difference is substantial.

Waiver of Rights

A servicemember may agree to waive any of the rights and protections afforded by the SCRA. To be valid, a waiver of rights that applies to the repossession, retention, foreclosure, sale, forfeiture or taking possession of property that is security for any obligation must meet the following requirements:

  • The waiver must be in writing.
  • The waiver must be executed as an instrument separate from the obligation or liability to which it applies. Since this requirement doesn’t allow the waiver to be included within the lease or any other rental agreement, the waiver of rights should be made a separate, stand-alone document.
  • The waiver must be executed during or after the servicemember’s period of military service. Requiring a servicemember to add his serial number, or other military designation number, to the waiver may serve as preliminary confirmation that this requirement has been satisfied.
  • The written waiver must specify the legal instrument to which the waiver applies, such as the rental or lease agreement, and if the servicemember is not a party to that instrument, he must also be specified.
  • The written waiver must be in at least 12-point type.

Given the limitations posed by the SCRA, it’s beneficial to obtain a waiver of rights from a servicemember. However, care must be taken to ensure the waiver not only satisfies all of the SCRA’s requirements, but it’s properly drafted to permit a self-storage facility to take prompt and appropriate action against a defaulting servicemember. Consequently, it’s advisable to seek the assistance of experienced counsel.

For many owners and operators of self-storage facilities, the decision to obtain a waiver of rights from servicemembers is an easy one, especially considering the manner in which the SCRA limits collection options. For those failing or refusing to obtain a proper waiver, the need to abide by the SCRA is underscored by the penalties awaiting violators.

Regardless of the chosen course of action, self-storage operators should respect the intent of the SCRA, which is to protect servicemembers who are unable to defend against a claim because they’re occupied elsewhere in service of their country.

Anita Byer is president and CEO, and Martin Salcedo is general counsel and self-storage risk management group member of Setnor Byer Insurance & Risk. Headquartered in Plantation, Fla., the company is an independent insurance agency dedicated to developing comprehensive insurance and risk-management solutions for clients throughout the United States. For more information, call 888.253.8498; visit www.setnorbyer.com.

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