Disclaimer: storEDGE is not a legal entity and may not be held responsible for outdated legal information.
Editor’s note: This post was originally published in February 2014 and has been completely revamped and updated for accuracy and comprehensiveness.
Do you know the lien laws in your state? As a self storage operator, you’ll undoubtedly run into delinquent tenants and send a unit through the auction process at some point. If you’re new to the industry or moving into a new area of the country, you’ll need to do your research to ensure you’re obeying your state’s lien laws, such as requirements for lien notices, ad placements, and more before auctioning off a storage unit. Learn all about the latest trends and check out our go-to industry resources for information on lien laws below!
Self storage lien laws have been in constant review since the Internet (and Storage Wars!) took off in popularity and home computers, laptops, and smartphones became common place. Now, postal mail is no longer the preferred communication for most tenants, and many states have updated their lien laws or are beginning the process of modernizing their laws. Check out the latest trends below to find out what’s happening to lien laws around the country.
Over the last several years, self storage lobbyists have been very successful in their efforts to modernize state lien laws, and as a result, state legislatures have been making big 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, New Jersey, North Carolina, Oregon, and Utah. In 2014, Illinois, Indiana, Kentucky, Minnesota, Pennsylvania, and South Carolina also updated their lien laws to include email delivery. By 2016, Delaware, Louisiana, Massachusetts, Missouri, New Mexico, and Virginia had followed suit. In 2017, California, Hawaii, and Nebraska also reformed their lien laws to allow operators to send lien notices through email.
As of August 2018, the following states allow for lien notices to be sent via email:
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Image courtesy of the SSA Globe
Restrictions for self storage lien notices vary from state to state. Some include asking for permission from customers when they rent from you, others involve verifying that the email was opened, sending out a certified letter via postal mail in addition to the lien notice email, or sending out a paper copy if the owner doesn’t get a notification that the email was delivered.
Another growing trend in the self storage lien process is that of requiring alternate contacts on lease agreements. When sending legal notices during the lien process, some state laws require self storage businesses to send lien notices to both the tenant and an alternate contact with a differing mailing address from that of the tenant. In states with this statute, an alternate contact is required to be listed on the lease and default notices are sent to both the tenant and the alternate contact. Think of the alternate contact as a backup when trying to contact a delinquent tenant - the alternate address will be used as another form of contact should the tenant move or or not receive their mail. Note: in some states, you can legally use a tenant’s secondary address as an alternate contact. In these cases, the alternate contact would be just another address in which you can reach the tenant, not a different person.
As of October 2018, only five states require the notification of alternate contacts in the self storage lien process:
Under Minnesota law, the alternate contact does not have any claim to the contents of the storage space - the person is simply an additional form of contact for collections. The trend of including alternate contacts on lease agreements is pro-self storage: the goal is to make collecting from delinquent tenants easier for self storage owners and managers.
To find out if alternate contacts are coming to your state (and what rights they have to the content of a renter’s storage unit), check out your state’s lien laws or reach out to your state’s self storage organization to get in touch with a self storage legal expert.
With the way the legislation has been changing in recent years, it’s fair to assume that there will be more bills in the future moving states toward full lien modernization, allowing owners to send out lien notifications via email and removing certified postal mail and newspaper advertisement requirements.
For states that require storage facilities to monitor whether or not an email was received, facility management software (like storEDGE!) can assist owners by streamlining communication and tracking the receipt of emails and auction notices during the delinquency process. When looking at management software, owners and managers should ensure that their software can adapt to suit the lien laws of their state.
At storEDGE, our tech team works hard to stay ahead of upcoming legislature that changes self storage lien laws, but we’re no legal experts. We frequently reference the Self Storage Association (SSA) Public Library Resources and the Inside Self Storage (ISS) news page for information on ever-changing self storage lien laws.
Check out the above resources and bookmark them in your browser to stay ahead of the self storage lien law curve.
If you live in a state that hasn’t seen a lien law revision and are interested in modernizing your lien process, you have two options you can pursue:
If you’re in a state 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.
Thanks for reading! If you liked this blog post, you may also like: Interview: Talking tech and self storage buildings with Janus International Group, How to choose the right self storage contractor for your new build, and 15 metrics every storage owner should be tracking.