BILL ANALYSIS Ó
AB 983
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Date of Hearing: April 9, 2013
ASSEMBLY COMMITTEE ON JUDICIARY
Bob Wieckowski, Chair
AB 983 (Melendez) - As Introduced: February 22, 2013
As Proposed to Be Amended
SUBJECT : SELF-STORAGE SERVICE FACILITIES
KEY ISSUE : IS IT REASONABLE THAT A CUSTOMER OF A SELF-STORAGE
FACILITY CONTESTING THE LIEN SALE OF HIS PROPERTY HAVE THE
RESPONSIBILITY FOR FILING SUIT TO STOP THE LIEN SALE, RATHER
THAN REQUIRING THE OWNER OF THE SELF-STORAGE FACILITY TO FILE
SUIT TO ENFORCE THE LIEN?
FISCAL EFFECT : As currently in print this bill is keyed
non-fiscal.
SYNOPSIS
This bill, sponsored by the California Self Storage Association,
seeks to modify lien enforcement rules under the California
Self-Service Storage Facility Act. Under existing law, the
owner has no option to enforce the lien but to file suit against
an occupant once the occupant has returned a specified
Declaration of Opposition to Lien Sale. This bill would instead
require the occupant of a self-storage unit to bring a court
action to stop a lien sale of his property, rather than
requiring the owner of the facility to file suit to enforce the
lien. Existing state law already allows lienholders in various
industries to sell property to satisfy a lien without being
required to file suit to enforce the lien. This bill would
include operators of self-storage facilities to that group,
which already includes operators of dry cleaning, laundry,
foundry, and veterinary facilities, among others. As proposed
to be amended, this bill no longer seeks to permit important
consumer notifications to be sent to self-storage customers
solely by email, and returns mailing requirements in the bill to
current law. The bill is supported by several operators of
self-storage facilities, who contend that the bill is necessary
to streamline California lien enforcement procedures and make
them more consistent with self-service storage lien remedies in
other states. The bill has no known opposition and, should it
be approved by this Committee, will be referred to the Assembly
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Business and Professions Committee.
SUMMARY : Places responsibility on the occupant of a
self-storage unit to bring a court action to stop a lien sale,
rather than requiring the owner of the facility to file suit to
enforce the lien. Specifically, this bill :
1)Provides that if a valid declaration in opposition to lien
sale is received by the owner prior to the date set forth in
the notice of lien sale, then the following rules apply:
a) The owner shall not sell the property for 30 days from
the date of the receipt of the declaration in opposition to
the lien sale.
b) If the occupant files a complaint in any court of
competent jurisdiction and serves the owner within 30 days
of the owner's receipt of declaration in opposition to lien
sale, the owner shall not sell the goods until the court
issues a judgment on the occupant's complaint in favor of
the owner's lien.
c) If the occupant does not serve the owner within 30 days
of sending the declaration in opposition to lien sale or
the owner is granted a judgment on the lien, the owner may
advertise the goods for sale and sell the property as
provided by Business & Professions Code Section 21707.
2)Revises the statutory Declaration in Opposition to Lien Sale
notice to reflect these proposed new rules and, among other
things, inform the recipient that he must file suit to contest
enforcement of the lien.
3)Allows the owner to have a vehicle, watercraft, or trailer
towed from the premises if rent and other charges have not
been paid for 60 days and the preliminary lien notice has been
sent by first-class mail. Further requires the notice to
state the name, address, and telephone number of the towing
company and the street address of the location where the towed
property can be redeemed, not less than five days after having
the vehicle towed.
4)As currently in print, permits an owner to email the
preliminary lien notice, notice of lien sale, and Declaration
in Opposition to Lien Sale to the occupant in lieu of
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first-class or certified mail. In response to concerns raised
by this Committee, the author has decided to remove these
provisions from the bill.
EXISTING LAW :
1)Allows an owner to terminate the right of the occupant to the
use of the storage space at a self-service storage facility,
if the rent or other charges remain unpaid for 14 consecutive
days, by sending a preliminary lien notice to the occupant's
last known address and to a specified alternative address.
Requires that this preliminary lien notice contain, among
other things, a statement that the occupant may be denied
access to the storage space (not less than 14 days after
mailing of the notice) if the sums are not paid and that an
owner's lien may be imposed thereafter. (Business &
Professions Code Section 21703. All further references are to
this code.)
2)Provides that if the preliminary lien notice has been sent and
the total sum due has not been paid within 14 days of the
termination date specified in the preliminary lien notice, the
lien imposed by this chapter attaches as of that date and the
owner may deny an occupant access to the space, enter the
space, or remove any property found therein to a place of
safekeeping. (Section 21705(a).)
3)Requires the owner to send to the occupant a notice of lien
sale that states, among other things, that (a) the stored
property is subject to a lien and the current amount of the
lien, and (b) the property will be sold to satisfy the lien
after a specified date that is not less than 14 days from the
date of mailing the notice, unless the occupant executes and
returns by certified mail the attached Declaration in
Opposition to Lien Sale (accompanying the notice of lien
sale). (Section 21705(b)(1).)
4)Provides that if the completed Declaration in Opposition to
Lien Sale is not received by the owner prior to the date
specified in the notice of lien sale, then the owner may sell
the property, as provided. (Section 21706.)
5)Provides that if the completed Declaration in Opposition to
Lien Sale is timely received by the owner, then the owner may
enforce the lien only by filing an action to enforce the lien
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in small claims court, provided that the amount of the lien is
small enough, or else in any other court of competent
jurisdiction. Further provides that if the owner is granted a
judgment in favor of the lien, the owner may advertise the
goods for sale and sell the property. (Section 21710.)
COMMENTS : This bill, sponsored by California Self Storage
Association, seeks to modify lien enforcement rules under the
California Self-Service Storage Facility Act. Under existing
law, the owner has no option to enforce the lien but to file
suit against an occupant once the occupant has returned a
specified Declaration of Opposition to Lien Sale. The bill
would instead require the occupant of a self-storage unit to
bring a court action to stop a lien sale of his property, rather
than requiring the owner of the facility to file suit to enforce
the lien.
According to the author, this bill would make the Self-Service
Storage Facility Act more consistent with other statutory lien
enforcement procedures in California, as well as with
self-storage lien enforcement in every other state. The author
states:
Forty-eight states and the District of Columbia have
enacted self-service storage lien law. California is
the sole state in the nation that permits delinquent
self-storage tenants to stop a lien sale by executing
and returning a simple form, and that then requires
the facility owner to file suit to enforce the lien.
This bill would place the responsibility on the tenant
to bring an action.
Brief summary of self-storage lien enforcement process. Under
existing law, after the occupant ("customer") is 14 days overdue
in paying storage fees for the unit, the facility owner
("owner") may mail a preliminary lien notice to inform the
occupant that if the overdue fees are not paid, a lien may
attach to the stored property after 14 more days. On the 28th
day that the storage fees remain unpaid, the lien attaches and
the owner may mail to the occupant the notice of lien sale and a
blank Declaration of Opposition to Lien Sale ("declaration") to
be completed and returned by the occupant. In addition, the
occupant may be denied access to the storage space thereafter.
The notice of lien sale informs the occupant that the lien sale
may, at earliest, occur after another 14 days (i.e. on the 42nd
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day after the fees were due), and the declaration allows the
occupant to state his opposition to the lien sale and informs
him of his existing rights under law.
If the occupant signs and returns the declaration to the owner
before the date of the lien sale specified in the notice of lien
sale, then the owner must file suit against the occupant to
enforce the lien. If the declaration is not returned in time,
then the owner may proceed with the lien sale. In short, under
existing law the earliest the lien sale can occur is 42 days
after the initial unpaid fees were due, and the owner has no
option to enforce the lien but to file suit if the occupant has
returned the declaration.
This bill allows occupants to sue to stop the lien sale, but
does not require the owner to sue to enforce the lien. This
bill does not change the rights and procedures associated with
the preliminary lien notice, nor the notice of lien sale. It
does, however, shift the burden from the owner to the occupant
to file suit in cases when the occupant has completed and
returned the declaration of opposition. If the value of the
property is sufficiently modest, the occupant may avoid higher
filing fees and file the suit in small claims court. Under this
bill, the sale is stopped automatically for 30 days if the
declaration is returned and received by the owner. If the
occupant files suit and serves the owner within those 30 days,
then the lien sale is stopped unless and until the court issues
a judgment in favor of the owner's lien. If the owner is not
served within 30 days, then the sale may proceed.
Proponents contend it is not unusual or unreasonable for
lienholders to be able to sell property to satisfy a lien
without being required to file suit to enforce the lien. For
example, under Civil Code Section 3052, persons in the laundry,
dry cleaning, foundry, veterinarian, plastic fabrication and
other businesses may obtain a lien on personal property left in
their possession and, if specified notifications are given, may
sell the property to satisfy the lien without having to file
suit. This bill would establish similar authority to sell
property to satisfy a self-storage lien without filing suit,
without altering the current two-step notification requirements
intended to preserve due process in these cases. As previously
mentioned, according to the author, this bill would align the
burden to sue in California with self-storage lien law in 48
other states.
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According to the sponsor, in the vast majority of cases where
the owner files suit to enforce a lien, the occupant who
returned the declaration fails to appear at the hearing.
Although it is unknown to what extent occupants who do appear at
trial tend to prevail, the Committee notes that requiring the
owner to file suit against the occupant may not be particularly
consumer protective as a matter of policy if it ordinarily
results in additional costs or fees being added against the
occupant because of the lawsuit.
Existing federal protections for military servicemembers.
Military servicemembers may be especially likely to use
self-storage facilities during deployment overseas-which also
may cause them to miss notifications from the facility owner if
for some reason a rent payment is not received. The Committee
notes, however, that servicemembers enjoy special consumer
protections under the federal Servicemembers Civil Relief Act
(SCRA). Under the SCRA, an owner holding a self-storage lien on
the property of a servicemember may not, during any period of
military service of the servicemember and for 90 days
thereafter, enforce the lien without filing suit to and
obtaining a judgment. (50 U.S.C. App. § 537.) Violation of
this prohibition is a misdemeanor offense. Since this federal
requirement applies to military personnel whether they return
the declaration of opposition or not, this bill does not affect
the restrictions on lien enforcement imposed by the SCRA for the
benefit of our military servicemembers.
Author's Proposed Amendments to Return Mailing Requirements Back
to Current Law . The bill as currently in print would authorize
facility owners for the first time to provide the preliminary
lien notice, notice of lien sale, and declaration of opposition
by email. Existing law requires that these documents be sent
either by first-class mail or certified mail, as specified.
These important documents inform occupants of the itemized fees
due, their rights to redeem their property under the law, and
the procedures and options available to them to protect their
property rights and avoid a lien sale. In general, consumers
are not likely to be aware that a notice has not been received
if an electronic mail transmission is for some reason
unsuccessful, and the risk of unknowingly failing to receive
such documents if transmitted electronically is the loss of the
occupant's property.
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As noted above, the author proposes in Committee to delete
selected provisions of the bill relating to email, in order to
return mailing requirements back to current law.
Prior Legislation: AB 655 (Emmerson), Ch. 439, Stats. 2010,
revised the preliminary lien notice, declaration of objection,
and made other related changes to the enforcement process for
self-storage liens.
REGISTERED SUPPORT / OPPOSITION :
Support
California Self Storage Association (sponsor)
Bancap Self Storage Group, Inc.
Chancellor Group, Inc.
RV Storage Depot
Security Public Storage
Willow Glen Storage
Opposition
None on file
Analysis Prepared by : Anthony Lew / JUD. / (916) 319-2334