This article will likely be the last installment of the Self Storage Legislation Update series for a while. Most state legislatures have now adjourned their session for the first part of 2021. There are still several initiatives on the ballot in the respective states, but progress is stalled until the legislature reconvenes either in the fall or next year. The first legislative session of 2021 did wrap up with two pretty big wins for operators in the self storage industry. Both Texas and Louisiana successfully passed much-needed updates to help operators in the lien enforcement process. Read below for details on new lien law requirements in these states, and check out part 1 and part 2 in the series for lien law legislation changes in other states that will impact self storage operators in 2021.
Self Storage Legislation Changes in Texas
Texas storage operators are fortunate to have incredible resources provided by the Texas Self Storage Association and their legal counsel, Connie Heyer. The Goldbook in Texas is invaluable because it is comprehensive and takes much of the guesswork out of lien enforcement. Operators in very few states have such helpful resources at their fingertips.
The step-by-step guidance provided by the TSSA does include selling motor vehicles and vessels. These resources made it easier to enforce a lien on a unit containing a motor vehicle. However, the TSSA hoped to modernize the statute this year by adding towing provisions for operators as a legal remedy for delinquent tenants.
Senate Bill 1181 passed and was signed into law by Governor Abbott on May 24, 2021, but the law will not go into effect until September 1, 2021. The law first adds the definition of a “vehicle storage facility” to the self-service storage facility statute. A vehicle storage facility is defined as “a garage, parking lot, or other facility that is (A) owned by a person other than a government entity and (B) used to store or park at least ten vehicles each year.”
To tow delinquent vehicles, the intent to use the tow remedy must be explicitly stated in the rental agreement, and this new rental agreement must be signed. Once the tenant is delinquent to the point of lien enforcement, send the Notice of Claim following the same procedure as you would for any other unit. In addition to the current requirements for the Notice of Claim letter, if the unit contains a vehicle, the letter must also include the following statement:
A statement that if the tenant fails to satisfy the claim on or before the 14th day after the date notice is delivered, the property may either be: (a) sold at public auction (in compliance with Texas law), or (b) towed to a vehicle storage facility and disposed of by the vehicle storage facility under Subchapter D, Chapter 2303, Occupations Code
If the tenant does not respond within 14 days, you may have the vehicle towed. One caveat to this is the vehicle storage facility must agree, in writing, to accept possession of the property.
Link to bill — https://capitol.texas.gov/tlodocs/87R/billtext/html/SB01181S.htm
Self Storage Legislation Changes in Louisiana
Senate Bill 101 was signed into law on June 7, 2021, by Governor Edwards but is not effective until August 1, 2021. While storage operators are still required to advertise their lien sale, they can now do it on a newspaper of general circulation or on a publically accessible website that conducts personal property auctions.
Before the bill, the statute confusingly read the operator shall publish the legal ad once in a newspaper of general circulation AND may publish on a publically accessible website that conducts personal property auctions. As of August 1, 2021, the law will read “shall be published in a newspaper of general circulation OR on a publically accessible website that conducts personal property auctions.”
StorageTreasures is a publicly accessible website that conducts personal property auctions. This means you can use your auction listing on StorageTreasures as your legal ad. However, it is important to note; the bill did not change any of the required elements of the legal ad. For example, the self storage statute requires the legal ad to include the tenant’s name and unit number. If you choose to use your StorageTreasures listing as your advertisement, you can easily list this information in the additional information section provided on each unit listing.
The ad is also required to contain a brief and general description of the property. This should be accomplished through the description you provide when you list the auction, but be cautious the description is correct of what is in the unit. In addition to the description, the ad also must contain the address of the self storage facility. This information can be found on the facility homepage linked to each auction listing, but if so desired, you could also add that to the additional information section as well.
Link to bill — https://www.ssala.org/resources/Legislative/SB_101_LIEN_LAW_REVISION.pdf
Online Auction Tools Support Compliance with Lien Laws
If you meet all of these requirements in the auction listing, your StorageTreasures listing can serve as your legal ad. You are still required to post your ad at least ten days before the sale, so your auction listing will need to be on the website for at least ten days. You can find reports in your dashboard that will show how long your unit was listed on the website, and you can access these at any time.
There is still legislation pending in Florida, Ohio, Pennsylvania, Louisiana, Illinois, Missouri, Vermont, and New York. There are also bills related to tenant insurance in Wisconsin, Iowa, Montana, Maine, and New Hampshire. Be sure to check with your state association for an update on pending legislation.
If you have any questions about lien law changes or are interested in using our Auction Review Service to help you navigate the lien enforcement process, please reach out to your Business Development Manager for more information.
Author: Cheli Rosa
This blog post was authored by licensed auctioneer Cheli Rosa. Cheli is an Auctioneer and Marketing & Communications Manager for StorageTreasures, managed by OpenTech Alliance. She helps clients at StorageTreasures have successful auctions and increase debt recovery percentages. Cheli regularly speaks at national and state self storage association events and contributes to many industry publications. She served on the Board of the Florida Self Storage Association and has been in the self storage industry for nine years. She was formerly the Director of Marketing at StorageStuff.Bid Online Storage Auctions and the Social Media Manager for Sentry Self Storage Management. Her passion is helping clients figure out what they need before they know it themselves. She is a Mom, an avid reader, and a Pinterest addict.
