Legislation has been introduced in Missouri and New York that, if passed, would change the administering of the lien-law process for self-storage operators in those states. The proposal in Missouri would expand notification options and enable value limitations on stored items, while the New York measure is designed to expand protections for tenants.
In Missouri, House Bill 1225 is supported by the Missouri Self Storage Owners Association (MSSOA) and the national Self Storage Association (SSA). It is similar to recent legislation passed in other states, in part due to lobbying efforts by the SSA and its affiliates. The bill would enable self-storage operators to use e-mail when notifying defaulted tenants of impending lien procedures, place public advertisements of a lien auction in media other than a local newspaper, and use online-auction websites to conduct a lien sale.
E-mail/verified mail is much more likely to be received by a past-due customer than Certified or First-Class Mail. Many of our customers are storing because they are moving, and as such, their mailing address is possibly in flux. But e-mail is completely portable, MSSOA Chairman Jim Whitesides wrote in a letter to association members. Electronic messages are more likely to be received and read, and therefore, better serve the purpose of notifying customers of their account status.
The measure would also enable operators to place limitations in rental agreements on the value of stored goods. In the case of a lien sale, the value limit designated on the rental agreement would be considered the maximum value of the stored property and the maximum liability of the operator for any claim for loss or damage to the items, according to the bills language.
The bill would also lengthen the period of default from 30 to 45 days. In addition, new language addresses motor vehicles, including boats and RVs, and would enable operators to have vehicles towed after delinquency exceeds 60 days.
In New York, Sen. Tony Avella introduced Senate Bill 6201 on Jan. 8 with the intent to provide greater protection to the occupants of self-service storage facilities by strengthening the notice requirement in relation to the lien sale, according to a press release issued by state senators office. The bill would update the lien-enforcement section of the current law to require that two lien notifications (instead of one) be sent to the tenant as well as to an alternative person designated on the rental agreement.
The bill would also allow tenants at least 30 days after receiving the second notification to satisfy the lien. Currently, operators can move forward with a lien sale 10 days after the tenant receives a single notice.
Given the increased demand for storage auctions through reality shows such as Storage Wars, it has become even more important to ensure that storage unit occupants are given sufficient notice to recover their personal property before it is auctioned off, Avella said. In order to prevent premature and wrongful sale of property, this legislation strengthens the notice requirement in relation to the owners enforcement rights and gives greater protections to consumers.
The measure is opposed by the New York Self Storage Association (NYSSA) and the SSA, which called the alternative-person requirement a puzzling development. It isnt clear what potential legal ramifications the requirement could have on rental agreements, unit access or privacy laws. Both associations are working in opposition to the bill.
It is the associations position that the additional requirements as proposed in the bill are unnecessary and would constitute an undue burden on self-storage business owners in New York, said Matthew D. Powers, president of the NYSSA. We are advocating on behalf of the industry in New York by meeting with and educating legislators in Albany to increase their understanding of what the self-storage business is all about and to clear any misconceptions about the lien-law and auction-sale process and how it is utilized by the industry.
- Missouri House of Representatives: House Bill 1225
- New York State Assembly: Senate Bill 6201
- The Monday Morning Globe, 1/13/14: Legislative Year Kicks-Off with Friendly Missouri Bill, Questionable New York Proposal and Virginia Sales Tax Measure