BILL ANALYSIS Ó
AB 983
Page 1
ASSEMBLY THIRD READING
AB 983 (Melendez)
As Amended April 11, 2013
Majority vote
JUDICIARY 9-0 BUSINESS & PROFESSIONS
11-1
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|Ayes:|Wieckowski, Wagner, |Ayes:|Gordon, Jones, Bocanegra, |
| |Alejo, Chau, Garcia, | |Campos, Dickinson, |
| |Gorell, Maienschein, | |Hagman, Maienschein, |
| |Muratsuchi, Stone | |Mullin, Skinner, Ting, |
| | | |Wilk |
|-----+--------------------------+-----+--------------------------|
| | |Nays:|Eggman |
| | | | |
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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.
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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 or she 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)Permits, as the bill is currently in print, 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 first-class or certified mail. In response to concerns
raised by the Assembly Judiciary Committee, the author has
decided to remove these provisions from the bill.
FISCAL EFFECT : None
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 or her 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,
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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."
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
day after the fees were due), and the declaration allows the
occupant to state his or her opposition to the lien sale and
informs him or her of his or her 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 does not change the rights and procedures associated
with the preliminary lien notice, or 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.
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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.
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, 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.
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 Assembly
Judiciary 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. 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.
Analysis Prepared by : Anthony Lew / JUD. / (916) 319-2334
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FN: 0000396