BILL ANALYSIS �
AB 983
Page 1
Date of Hearing: May 7, 2013
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Richard S. Gordon, Chair
AB 983 (Melendez) - As Amended: April 11, 2013
SUBJECT : Self-service storage facilities.
SUMMARY : Requires the occupant of a self-storage facility unit
to bring a court action to delay a lien sale for nonpayment of
rent or fees rather than requiring the storage facility owner to
file suit to enforce the lien, and allows the storage facility
owner to have a vehicle, watercraft or trailer towed from the
premises after 60 days for nonpayment of rent or fees.
Specifically, this bill :
1)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.
2)Revises the statutory Declaration in Opposition to Lien Sale
notice to reflect the proposed new rules and inform the
recipient that he or she must file suit to contest the
enforcement of the lien in a specified time frame.
3)Provides that if a valid declaration in opposition to a lien
sale is received by the owner prior to the date set forth in
the notice of lien sale, the owner may enforce the lien as
follows:
a) The owner shall not sell the property for 30 days from
the date of 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 the Declaration in Opposition to
the Lien Sale, the owner shall not sell the goods until the
court issues a judgment on the occupant's complaint in
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favor of the owner's lien; and,
c) If the occupant does not serve the owner within 30 days
of sending the Declaration in Opposition to the Lien Sale,
the owner may advertise the goods for sale and sell the
property, as specified.
4)Revises the statement allowing the parties to create
additional rights, duties, and obligations in and by virtue of
the rental agreement to include, but not limited to, the right
to limit the value of the property the occupant may store in
the storage space or the right to limit the occupant's right
to enter the premises or storage space, as specified.
5)Makes other technical and clarifying amendments.
EXISTING LAW :
1)Defines a self-service storage facility to mean "real property
designed and used for the purpose of renting or leasing
individual storage space to occupants who are to have access
to the space for the purpose of storing and removing personal
property or for storing individual storage containers provided
to occupants who have exclusive use of the container for the
purpose of storing and removing personal property as
specified." (Business and Professions Code (BPC) Section
21701)
2)Requires each contract for the rental or lease of individual
storage space in a self-service storage facility to be in
writing and shall contain, in addition to the provisions
otherwise required or permitted by law, a statement that the
occupant's property will be subject to a claim of lien and may
even be sold to satisfy the lien if the rent or other charges
due remain unpaid for 14 consecutive days, and states that the
provisions shall not apply and the lien shall not attach
unless the rental agreement requests and provides space for
the occupant to give the name and address of another person to
whom the preliminary lien notice and subsequent notice
required may be sent. (BPC 21712)
3)Provides that if any part of the rent or other charges due
from an occupant remain unpaid for 14 consecutive days, an
owner may terminate the right of the occupant to the use of
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the storage space at a self-service storage facility by
sending a notice to the occupant's last known address and the
alternative address as specified, and requires the notice to
be sent by certified mail, postage prepaid or by regular
first-class mail if the owner obtains a certificate of mailing
indicating the date the notice was mailed and contains
specified information. (BPC 21703)
4)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. (BPC 21705)
5)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. (BPC 21706)
6)Provides that if a valid Declaration in Opposition to Lien
Sale is received by the owner prior to the date set forth in
the lien notice, the owner may only enforce the lien as
follows:
a) File an action to enforce the lien in small claims
court, as specified; or,
b) File an action to enforce the lien in any other court of
competent jurisdiction, in which case the summons and the
complaint may be served by certified mail, postage prepaid
addressed to the occupant at the address provided by the
occupant in the declaration of lien sale and service shall
be deemed completed on the fifth day after the mailing as
specified. (BPC 21710)
7)Provides, under the federal Servicemembers Civil Relief Act,
that 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.)
FISCAL EFFECT : None. This bill is keyed non-fiscal by the
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Legislative Counsel.
COMMENTS :
1)Purpose of this bill . This bill would shift the
responsibility for bringing an action in court to stop a lien
sale triggered by nonpayment of rent or other fees from the
owner of a storage facility to the occupant of a storage unit.
Current law requires a storage facility owner desiring to
enforce a lien on property in delinquent storage units to file
suit against the occupant after the occupant files a
Declaration of Opposition to Lien Sale document. This bill
reverses that dynamic by instead requiring the occupant of the
delinquent storage unit to bring a court action to stop the
lien sale after appropriate notice by the owner. Furthermore,
AB 983 explicitly authorizes facility owners to have vehicles,
watercraft or trailers towed after 60 days of nonpayment and
notice to the occupant. It also clarifies the facility
owner's right to limit the value of the property that the
occupant may store in the space, and the right to limit the
occupant's access to the space. This bill is sponsored by
California Self Storage Association.
2)Author's Statement . According to the author, "[This bill]
updates the lien remedy [process] and makes it effective, more
efficient and less costly to implement. California is the
sole state in the nation that permits delinquent tenants to
stop a lien sale and require the facility owner to file suit
to enforce the lien by executing and returning a simple form.
It also provides that in addition to the selling [of] vehicles
or boats in accordance with owner's lien rights the owner may
have vehicles or boats towed from the premises when rent and
other charges are not paid for 60 days."
3)The California Self-Service Storage Facility Act . The
California Self-Service Storage Facility Act (Act) was enacted
in 1980 and has been the self-storage industry's primary
remedy for dealing with occupant delinquencies. The Act
permits the storage operator to regain possession of the
storage unit and liquidate the contents when occupants fail to
pay the rent. The Act also imposes specific requirements for
rental contracts, late fees, and the attachment and sale of
property by owners for non-payment of rent and fees.
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Rental contracts for storage space must be in writing, and the
contract must specify any applicable late fees and include a
statement that the occupant's property will be subject to a
lien and may be sold to satisfy the lien if rent or other
charges remain unpaid for 14 consecutive days. Self-storage
facility owners may charge reasonable late fees if the renter
does not pay the entire amount for rent and other fees as
specified in the rental agreement.
4)Self-storage lien enforcement process. Under existing law,
after the occupant is 14 days overdue in paying rent for the
unit, the facility 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 additional
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
to be completed and returned by the occupant. The notice of
lien sale informs the occupant that the lien sale may commence
after another 14 days. The Declaration informs the occupant
of their existing rights under law, and temporarily allows
them to stop the lien sale. In addition, the owner may
thereafter deny the occupant access to the storage space.
If the occupant signs and returns the Declaration to the owner
before the date of the lien sale specified in the lien notice,
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.
Under existing law, individuals in the laundry, dry cleaning,
foundry, and plastic fabrication businesses may obtain a lien
sale on personal property left in their possession without
having to first file suit under specified conditions and if
certain notices are sent.
This bill does not alter the procedures and protections
currently associated with a preliminary lien notice or the
notice of lien sale. It simply requires the occupant of a
self-storage unit to bring a court action to stop a lien sale
of his or her property rather than requiring the owner of a
storage facility to file suit to enforce the lien sale.
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5)Existing federal protections for military servicemembers.
Military servicemembers are 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. However, this bill
will not affect them.
Servicemembers enjoy special consumer protections under the
federal Servicemembers Civil Relief Act (SCRA), which provides
that 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. Since
this federal requirement applies to military personnel
regardless of whether or not they return the Declaration, this
bill does not affect their additional protections.
6)Arguments in support . The California Self Storage Association
writes in support, "[This bill] will modify the Declaration in
Opposition to Lien Sale by providing a clear notice to
delinquent occupants that they have the right to file suit to
stop the lien sale. In most instances the occupant would be
able to file suit in small claims court and once the legal
documents are served, the sale may not proceed until a hearing
is held. Moreover, the legislation provides the occupant with
additional time after mailing notice than provided under
current law."
7)Double referred . This bill was heard by the Assembly
Judiciary Committee on April 9, 2013 and approved by a 9-0
vote.
8)Previous legislation . AB 655 (Emmerson), Chapter 439,
Statutes of 2010, revised the preliminary lien notice,
declaration of objection, and made other related changes to
the enforcement process for self-storage liens.
AB 790 (Frommer), Chapter 267, Statutes of 2003, authorized an
owner to provide preliminary lien notice by regular
first-class mail (in addition to certified mail) if he or she
obtains a certificate of mailing indicating the date of
mailing; but prohibited the owner from removing property until
14 days after the lien date if using this method rather than
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certified mail.
AB 2263 (Correa), Chapter 156, Statutes of 2000, authorized
the owner of a self-storage facility to assess occupants a
late payment fee for delinquent rental fee payments, as
specified, and provided that liens imposed include late
payment fees.
REGISTERED SUPPORT / OPPOSITION :
Support
California Self Storage Association (sponsor)
BACO Realty Corporation
Bancap Self Storage Group, Inc.
Carlo Development
Dollar Self Storage
Optivest Properties
Security Self Storage
SKS Management LLC
Storage Pro, Inc.
West Coast Self Storage
Opposition
None on file.
Analysis Prepared by : Elissa Silva / B.,P. & C.P. / (916)
319-3301