Welcome to this Special Edition of the Self Storage Legal Monthly Minute. This is an opportunity to connect with you to share a quick update on legal issues which affect the self storage industry. I hope that you will take the time to read the update and consider how the information may impact your own self storage business.
Keeping Up with the Law:
Has your state changed its Self-Storage Act recently?
By Scott Zucker
Within the last few years, more than twenty states have amended their state Self Storage Acts, impacting the operation of self-storage facilities around the country. It is crucial for self-storage operators in the states where the laws have changed to review the revised laws and amend their leases and operational procedures to match the requirements of the current laws. Some of the states that have made changes to their state lien laws include ARIZONA, ARKANSAS, COLORADO, CONNECTICUT, FLORIDA, GEORGIA, ILLINOIS, INDIANA, KANSAS, KENTUCKY, MAINE, MARYLAND, MICHIGAN, NEVADA, NEW JERSEY, NORTH CAROLINA, OHIO, OREGON, RHODE ISLAND, SOUTH CAROLINA, TENNESSEE, TEXAS AND UTAH. Generally, most of the changes have involved five main areas: Notice to Tenants, Late Fees, Limitation of Value of Stored Goods, Vehicle Towing and On-line Advertising and Sales.
Certainly, one of the most significant updates has been to the method for notifying tenants of the impending lien sales of their stored property. Now, many states permit the use of either verified mail (the sending of a first class letter with a United States Postal Service certificate of mailing or other method of sending that confirms mailing) or the use of electronic mail. States that have made changes to their Lien notice requirements include: Arizona, Arkansas, Colorado, Connecticut, Florida, Georgia, Indiana, Kansas, Kentucky, Maine, Maryland, Michigan, Nevada, New Jersey, North Carolina, Oregon, Rhode Island, South Carolina, Tennessee, Texas And Utah.
Another change has been to the regulation of late fees pursuant to statute. These restrictions on what can be charged for late fees are independent of the fees that can be charged for enforcing the landlord’s lien over the stored property. States that have recently changed their late fee laws include Arkansas, Illinois, Kentucky, Maine, Maryland, Nevada, North Carolina, Ohio, Oregon and Tennessee.
A statutory limitation of value has also been added to a number of the state laws. Accordingly, in Arkansas, Georgia, Illinois, Indiana, Maine, Maryland, New Jersey, Oregon, Rhode Island and Tennessee, if the rental agreement contains a provision limiting the value of the goods stored, the tenant is now limited to that maximum value if a claim is made regarding the loss or damage to the stored goods.
The states that have added a towing right (in lieu of a lien sale) for cars and boats stored on a self-storage property now include Colorado, Georgia, Illinois, Indiana, Kentucky, Maine, Maryland, Nevada, New Jersey, North Carolina, Ohio, Oregon, Rhode Island, Tennessee and Utah.
Finally, some of the recent legislative changes have included provisions that either permit on-line advertising in lieu of newspaper advertising or permit alternative advertisements of the sale as long as such ads are deemed to be “commercially reasonable”. Such states include Arizona, Colorado, Indiana, Michigan, North Carolina, Ohio and Kentucky.
Because of these ever-evolving changes, it is important for self-storage operators to take the time to review their current leases and operational documents and update them to reflect these current changes. The enforceability of these new laws may very well depend on the language incorporated in the tenant’s lease or the wording of the tenant’s lien notice letter. The self-storage laws are there to assist self-storage operators, but those operators must also comply with the laws to take advantage of the benefits those laws provide.
Until next month – Happy storing!
Scott I. Zucker
Weissmann Zucker Euster Morochnik P.C.
One Securities Centre, Suite 650
3490 Piedmont Road, Atlanta, GA 30305
404.364.4626 direct – 404.364.2320 fax