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Delaware Governor Signs Update to Self-Storage Lien Law

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Delaware Gov. John Carney signed an update to the state’s self-storage lien law on Sept. 14 that enables facility operators to advertise and conduct their lien sales online, place value limits on stored items, charge late fees, and tow motor vehicles from spaces that go unpaid. Senate Bill 46 (SB 46) went into effect with the governor’s signature.

Similar to other recent state lien-law updates, the measure allows self-storage operators to advertise auctions in the print or online version of the local newspaper, or via a “publicly accessible” auction website. A house amendment that would have stipulated operators advertise their sales through both channels failed; however, auction notices must include the “name of each occupant whose property is to be sold,” according to the bill’s language. A single advertisement may be used “when a sale involves the property of more than one occupant.”

The law allows operators to conduct lien sales online as long as the auction website “regularly conducts online auctions of personal property.” If the proceeds from an auction are more than what’s required to settle the lien, operators must hold the balance “for delivery on demand” to the former tenant for up to two years. After two years, any unclaimed balance becomes the property of the self-storage owner.

SB 46 also includes language that absolves storage operators from liability for identity theft or “other harm” that may result from the misuse of personal information found among the unit contents sold during an auction, so long as the self-storage owner had no knowledge the information was being stored in the unit.

In addition, the measure allows storage operators to place a maximum value of stored contents based on value limits expressed in rental agreements, as long as the lease provision is in bold type or underlined.

It also enables operators to assess late fees equal to the greater of $20 or 20 percent of monthly rent. Late-fee policies must be stated in the rental agreement.

Finally, SB 46 also allows self-storage operators to have stored boats and motor vehicles towed after default reaches 60 days, but tenants must be notified of the removal by “verified” mail or e-mail communication that includes the name and full contact information of the towing company.

The measure was supported by the national Self Storage Association (SSA). “Combined with last year's effort to allow e-mail notifications of an impending lien sale and the removal of the requirement to send notices by Certified Mail, Delaware becomes the third state in the nation to have achieved full lien modernization," Marcus Dunn, the SSA's government-relations representative, said in an Oct. 2 e-mail newsletter to SSA members.

The state senate passed the bill on April 27, while the house approved it on July 2.

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