BILL ANALYSIS Ó
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|Hearing Date: June 10, 2013 |Bill No:AB |
| |983 |
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SENATE COMMITTEE ON BUSINESS, PROFESSIONS
AND ECONOMIC DEVELOPMENT
Senator Ted W. Lieu, Chair
Bill No: AB 983Author:Melendez
As Amended:April 11, 2013 Fiscal:No
SUBJECT: Self-service storage facilities.
SUMMARY: Makes several changes to the California Self-Service Storage
Facility Act.
Existing law:
1) The California Self-Service Storage Facility Act (Act) specifies
remedies and procedures for self-service storage facility owners
when occupants are delinquent in paying rent or other charges.
(Business and Professions Code (BPC) § 21700 et seq.)
2) Defines the following terms: (BPC § 21701)
a) "Self-service storage facility" as 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.
b) "Owner" as the owner, operator, lessor, or sublessor of
a self-service storage facility, his or her agent, or any
other person authorized by him or her to manage the facility,
or to receive rent from an occupant under a rental agreement,
and specifies that no real estate license is required.
c) "Occupant" as a person, or his or her sublessee,
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successor, or assign, who is entitled to the use of the
storage space at a self-service storage facility under a
rental agreement, to the exclusion of others.
1) Provides that the owner of a self-service storage facility and his
or her heirs, executors, administrators, successors, and assigns
have a lien upon all personal property located at a self-service
storage facility for rent, labor, late payment fees, or other
charges, present or future, incurred pursuant to the rental
agreement and for expenses necessary for the preservation, sale, or
disposition of personal property. (BPC § 21702)
2) Provides that any lien on a vehicle or vessel subject to
registration or identification under the Vehicle Code which has
attached and is set forth in the documents of title to the vehicle
or vessel shall have priority over any lien created pursuant to the
Act. Provides that any lien created pursuant to the Act on a
vehicle or vessel subject to registration or identification under
the Vehicle Code shall not include any charges for rent, labor, or
other services incurred pursuant to the rental agreement, accruing
more than 60 days after the date the lien imposed. (BPC § 21702.5)
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 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
the Act 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) Requires owners to send occupants a notice of lien sale that states
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 unless:
(1) the amount of the lien is paid; or (2) the occupant returns a
Declaration in Opposition to lien sale in a specified form under
penalty of perjury. (BPC § 21705 (c).)
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6) 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)
7) Requires a lien sale to be advertised in a newspaper of general
circulation in the judicial district in which the sale is to be
held, or, if there is no newspaper of general circulation in the
judicial district, posted in not less than six conspicuous places
in the neighborhood of the proposed sale. (BPC § 21707)
8) Permits a person claiming a right to the stored goods, prior to any
lien sale, to pay the lien amount and reasonable expenses. In that
event, the goods shall not be sold, but shall be retained by the
owner subject to the court's disposition of the property. (BPC §
21709)
9) 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:
(BPC § 21710)
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.
1) Requires each contract for the rental or lease of individual
storage space in a self-service storage facility to be in writing
and 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)
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2) 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.)
This bill:
1) Provides that in addition to the right to foreclose on the vehicle,
watercraft, or trailer at a self-storage facility, the owner of a
self-storage facility (owner) may have the vehicle, watercraft, or
trailer towed from the premises if rent and other charges have not
been paid for 60 days and the required notice has been sent.
2) Provides that not less than five days after having the vehicle
towed, the owner must send notice by first-class mail with
certificate of mailing to the occupant's last known address,
stating the name, address, and telephone number of the towing
company and the street address of the location where the towed
property can be redeemed. Provides that when the towing company
takes possession of the vehicle, watercraft, or trailer, the owner
shall not be liable for the property or damage to the property.
3) Deletes the requirement under current law for an occupant to be
contacted and served at the address provided in the Declaration in
Opposition to Lien Sale in order for the owner to sell the
property.
4) Recasts provisions related to the enforcement of a lien when an
owner receives a Declaration in Opposition to Lien Sale by
specifying that if an owner receives a Declaration in Opposition to
Lien Sale on or prior to the date set forth in the notice of lien
sale, the owner may enforce the lien as follows:
a) The owner may not sell the property for 30 days from the
date of receipt of the Declaration in Opposition to Lien Sale.
b) If the occupant files a complaint in court and serves
the owner within 30 days of the owner's receipt of Declaration
in Opposition to Lien Sale, the owner may not sell the goods
until the court issues a judgment 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, the
owner may advertise the goods for sale and sell the property.
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1) States that the Act shall not be construed to impair or affect the
right of the parties to create additional rights, duties, and
obligations in and by virtue of the rental agreement, including,
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. States
that the rights provided by the Act shall be in addition to all
other rights provided by law to a creditor against his or her
debtor.
FISCAL EFFECT: This bill has been keyed "non-fiscal" by Legislative
Counsel.
COMMENTS:
1. Purpose. This bill is sponsored by the California Self-Storage
Association . According to the Author, forty-eight states and the
District of Columbia have enacted self-service storage lien laws,
leaving California as the only state in the nation that permits
delinquent tenants to stop a lien sale and instead require the
facility owner to file suit to enforce the lien. The Author states
that this bill updates the self-storage lien remedy and makes it
effective, more efficient and less costly to implement and will
place the responsibility on a tenant to bring an action.
The Author believes that this bill will treat self-storage
operators similar to those in the dry cleaner, foundry, warehouse
and plastic fabricators businesses. The Author also believes that
this bill will reduce burdens on California courts because in many
instances, when a storage facility files suit, the tenant fails to
attend the court hearing, thus wasting limited court time.
2. Background.
a) 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.
b) 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.
c) Existing federal protections for military
servicemembers . Military servicemembers are likely to use
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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.
1. Prior Similar and Related Legislation. SB 655 (Emmerson, Chapter
439, Statutes of 2010) revises the existing declaration of
objection that permits and occupant of a self-service storage
facility to object to a lien sale of their items, and makes other
related changes.
SB 279 (Emmerson, Chapter 65, Statutes of 2011) requires that lien
sales, relative to property in a self-storage facility, be
advertised in a newspaper of general circulation in the judicial
district where the sale is to be held.
AB 790 (Frommer, Chapter 267, Statutes of 2003) makes technical and
nonsubstantive changes to the Act by allowing storage operators to
mail agreement termination notices via first-class mail, if
operators obtain a "certificate of mailing" from the post office
indicating the date the notices were mailed.
AB 2263 (Correa, Chapter 156, Statutes of 1996) authorizes
self-storage facilities to assess a reasonable late payment fee
for delinquent rental fee payments based on the monthly rent of the
facility.
2. Arguments in Support. Supporters, which includes individual
self-storage owners and operators believe that this bill will make
current law more consistent with other California statutory lien
enforcement procedures and align it with self-storage lien remedies
in other states. Supporters also state that the bill will
streamline and clarify current requirements while at the same time
providing a benefit to customers through improved and more
efficient communication.
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NOTE : Double-referral to Judiciary Committee second.
SUPPORT AND OPPOSITION:
Support:
California Self Storage Association (CSSA), Sponsor
RV Storage Depot
Security Public Storage
Stor-A-Lot Self Storage
Sure Save American Self-Storage
Opposition:
None on file as of June 4, 2013.
Consultant: Sarah Mason