New Trends Hit Self Storage Lien Laws
The last several years, state legislatures have been making changes to self storage lien laws across the country.
The biggest trend is allowing facility owners and managers to send out lien notices via email. In 2013 alone, 10 states altered the wording of their laws to allow for this new way of delivering legal notices: Arkansas, Connecticut, Florida, Georgia, Maryland, Nevada, North Carolina, New Jersey, Oregon and Utah.
All the laws are created differently and have different restrictions for their lien notices. Some include asking for permission from customers when they rent from you, and others involve sending out a paper copy if the owner doesn’t get a notification that the email was delivered
With the 2013-2014 legislative session underway, four states have legislation that would change the lien notice process.
New York Senate Bill 6201
While most of the self storage lien law legislation is targeted at simpler legal notification via email, New York’s bill is focused on benefiting the tenant. If the legislation is passed, owners will have to send two lien notifications instead of the one that they were previously required to. It would also force owners to send the lien notices to an alternative person that the customer must include on their rental agreement.
“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,” New York Senator Tony Avella, the bill's sponsor, told Inside Self Storage.
"In order to prevent premature and wrongful sale of property, this legislation strengthens the notice requirement in relation to the owner's enforcement rights and gives greater protections to consumers."
The bill also gives tenants 30 days after receiving the second lien notice to satisfy the lien. Before, storage owners could sell 10 days after the one required notice was received by the renter.
- It gives the tenant more time to take care of their bill before the unit goes to auction. Additionally, storage owners may be more likely to receive the payment, which could be more ideal than sending a unit to auction.
- The alternative person receiving a lien notice gives a greater chance that the renter will be notified. Owners can feel more confident that they’ve done everything they can to collect payment for the unit.
- It will likely cost owners more money to deliver these notices.
- The process for sending an additional lien notice will take more time.
Missouri House Bill 1225
The alterations to the Missouri bill, Illinois bill and Washington bill are much like the other lien law bills that have been passed and would allow for self storage operators to send out lien notices via email.
“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."
When Florida passed a similar bill, The Self Storage Association said, “If the some 2,600 self storage companies utilize the new process, the industry could save more than $6 million annually, statewide.”
That would mean big savings for Missouri self storage operators because, as the bill is written now, they won’t have to make sure the notice is received. The Illinois and Washington legislation would require owners to send out certified mail if there isn’t receipt of email delivery.
The Missouri bill also extends the number of days delinquent before an operator can put a lien on the renter from 30 to 45.
- It would save self storage owners money by not having to pay for certified mail unless the renter doesn’t open the email in Illinois or Washington.
- It would save self storage operators time by being able to handle accounts from behind a computer.
- Operators must wait longer to put a lien on renters in Missouri.
- The current draft of the Missouri bill doesn’t require owners who are emailing lien notices to get delivery confirmation, so they can’t be sure that renters are actually receiving the notice.
With the way the legislation has been falling in recent years, a solid hypothesis is that there will be more bills that align with the Missouri, Illinois and Washington bills and allow owners to send out lien notifications via email.
If states require storage facilities to monitor whether or not an email was received, business management software capabilities will need to step up and provide a streamlined process. Owners will want to make sure they choose software that can adapt to the lien laws of their state.
If you live in a state that hasn’t seen a lien law revision and are interested in the email options, you have two venues you can pursue:
- Contact your state’s SSA. They are there to lobby for the legislation you want passed and were a vital component in other states creating revisions to their laws.
- If you can’t get your SSA on board, you should contact your individual state representative. Make a case to him/her and they can introduce a bill into the legislature. You can give testimony and try to convince the committee, house and senate to pass your bill. The best-case scenario would be to rally as many self storage owners and managers you can to testify to your state’s legislature.
New York, Illinois, Washington and Missouri. If you’re in one of the four states that currently has lien notices legislation and you feel particularly strongly for or against it, get in contact with your state representative or testify before the legislature. It’s much easier to alter the course of a bill while it’s still in the legislature as opposed to waiting until it’s a law.