State self-storage associations continued to make legislative gains through the first quarter of 2013, with at least 14 states making progress toward updating self-storage regulations. In most instances where at least one branch of a states legislature has recently passed amendments to proposed bills, the language updates lien-law procedures and/or adds provisions for selling tenant insurance.
Most of the bills have been pushed forth by local state self-storage associations in affiliation with the national Self Storage Association (SSA). As a result, much of the introduced new language is similar from state to state, bringing a consistency to updates across the nation, particularly with regard to the vehicle-storage lien process, the allowance of delinquent tenant e-mail notifications and public notification of lien auctions.
Generally, the associations are gaining traction in having lawmakers consider amending bills to treat boat and motor-vehicle liens similarly and enabling self-storage operators to have abandoned vehicles towed from facilities rather than initiating the full lien process.
When it comes to electronic notifications regarding delinquency, associations are also having success with adding language that enables operators to send lien e-mail notifications to tenants as long as it is stipulated in their rental agreements. Some states, such as Maryland (Senate Bill 634), have added caveats that require operators to follow-up via verified mail if they do not receive a response to an e-mail or confirmation of e-mail delivery.
Although the vast majority of amended bills are still working their way through legislatures, Utah (Senate Bill 18202) and Virginia (House Bill 1731) have successfully enacted new lien laws or tenant-insurance provisions, respectively. Amended lien-law bills are awaiting governor signatures in Arkansas (Senate Bill 377) and Georgia (Senate Bill 61), while a tenant-insurance bill is on the governors desk in Indiana (Senate Bill 432).
The cumulative effect of all the legislative activity is the modernization of self-storage regulations across much of the nation. It is an exciting time in the self-storage industry, Scott Zucker, a partner in the Atlanta law firm Weissmann Zucker Euster Morochnik P.C., recently told Inside Self-Storage. After 20-plus years of antiquated legislation, were now seeing the evolution of laws that are not only up to date with the technology that is available but are more in line with the practical operation of the business of self-storage.
Among the sticking points in state assemblies has been adding language that would allow using online public notifications for lien auctions. While there was passage in Ohio (House Bill 247) and recent positive movement in Florida (House Bill 727), online public notifications were removed from the amended bill that has passed the Maryland senate.
Where it can, the SSA has lobbied for language that would enable self-storage operators to place public-notice announcements for lien sales in commercial outlets other than a local newspaper. As a result, self-storage businesses could potentially save money by publicizing auctions through less expensive channels, including the Internet.
In the bills that contain the public-notification language, the term commercially reasonable would be satisfied as long as at least three independent bidders attend the sale at the time and place advertised. The option for additional commercial placements has been met with resistance from newspaper lobbyists.
Following is a summary of some of the self-storage bills currently being considered in state legislatures:
- Connecticut lien-law improvement bill (Senate Bill 752) is currently in the senate.
- Florida lien-law improvement bill (House Bill 727) recently passed the House Judiciary Committee.
- Michigan lien-law improvement bill (House Bill 4484) and tenant-insurance bill (House Bill 4485) are both in the house.
- North Carolina lien-law improvement bill (House Bill 243) is currently with the Senate Judiciary Committee.
- Oregon lien-law improvement bill (House Bill 2706) passed the house today, while a tenant-insurance bill (House Bill 2845) is now in the senate.
- South Carolina lien-law improvement (House Bill 3563) bill is in the house.
- Tennessee tenant-insurance bill (House Bill 980) is in the house.
To view the current lien law in your state, visit the Inside Self-Storage Lien Law Registry.