BILL ANALYSIS
AB 655
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Date of Hearing: April 14, 2009
ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS
Mary Hayashi, Chair
AB 655 (Emmerson) - As Introduced: February 25, 2009
SUBJECT : Self-service storage facilities.
SUMMARY : Makes various changes to the remedies and procedures
of the California Self-Service Storage Facility Act (Act) for
self-service storage facility owners when occupants are
delinquent in paying rent or other charges. Specifically, this
bill :
1)Permits an owner who sends an occupant a preliminary lien
notice by first-class mail with certificate of mailing to,
upon the effective date of the lien, deny the occupant access
to the space, enter the space, and remove property for safe
keeping.
2)Requires an owner to send an occupant a notice of lien sale
stating that any stored property will be sold to satisfy the
lien after a specified date that is at least 21 days from the
date of mailing unless the amount of the lien is paid, and
that the occupant may challenge the lien sale by filing a
court action.
3)Requires the lien sale to be advertised in a commercially
reasonable manner of public notice, as specified.
4)Eliminates an occupant's right to return a declaration in
opposition to the lien sale.
5)Permits a person claiming a right to the stored goods prior to
any lien sale to pay the lien amount and one month's rent in
advance, in which case the owner must retain the property
pending a court's disposition of the property, and prescribes
procedures to be followed if a court order is not obtained.
6)Permits an owner to assess a late fee equal to the greater of
$20 or 20% of the monthly rent, and to recover reasonable
expenses incurred in collecting rent and enforcing a lien.
EXISTING LAW :
AB 655
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1)Permits an owner who sends an occupant a preliminary lien
notice by certified mail to, upon the effective date of the
lien, deny the occupant access to the space, enter the space,
and remove property for safe keeping. However, if the owner
sends the notice by first-class mail with certificate of
mailing, the owner may not remove the property for at least 14
days following the effective date of the lien.
2)Requires an owner to send an occupant a notice of lien sale
stating that any stored property will be sold to satisfy the
lien after a specified date that is at least 14 days from the
date of mailing unless the amount of the lien is paid or the
occupant returns a declaration in opposition to lien sale in a
specified form.
3)Requires the lien sale to be advertised in a newspaper of
general circulation or posted in conspicuous places in the
neighborhood of the proposed sale, as specified.
4)Permits a person claiming a right to the stored goods prior to
any lien sale to pay the lien amount and reasonable expenses,
in which case the owner must retain the property pending a
court's disposition of the property.
5)Provides that an owner may assess a reasonable late payment
fee if an occupant does not pay the entire amount of rental
fee, as specified based upon the rental amount.
FISCAL EFFECT : Unknown. This bill is keyed non-fiscal.
COMMENTS :
Purpose of the bill . According to the author's office, "AB 655
updates the California Self-Service Storage Facility Act by
making it more consistent with other statutory lien enforcement
procedures and allowing owners to utilize new methods of
communication.
"AB 655 will eliminate the Declaration of Opposition to Lien
Sale and replace it with a clearer Notice of Lien Sale to
delinquent occupants to inform them of their right to file suit
to stop the sale of their property. In most instances the
occupant would be able to file suit in small claims court and
once the legal documents are served, the sale of the occupant's
property may not proceed until a hearing is held. Currently,
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most delinquent occupants are confused by the Declaration and
its intentions; therefore, its elimination would clarify the
law. Additionally, this bill will provide more time for the
occupant to act after being notified by mail than under current
law as well as allow the owner to mail the notice by first class
mail with certificate of mailing. This less expensive method of
sending the notice provides a single method of delivery and
thereby avoids procedural errors that could be made under the
current Act.
"Methods of communications have significantly changed in the 30
years since the original law was enacted. This bill eliminates
the current requirement that the sale be advertised in a
newspaper of general circulation, but instead requires that the
sale be advertised in a commercially reasonable manner. Under
AB 655, owners will be able to take advantage of new
communication methods of providing public notice, including
posting on the Internet. Other methods of communication include
posting notice at the facility, the facility Web site, local
publications used to advertise the sale of used property, and
direct communication to potential buyers.
"This legislation will also adjust the late fees with a more
reasonable calculation of $20 or 20%, whichever is greater.
This approach was adopted by the Self Storage Association and
has been enacted in the majority of states that have late fee
laws."
Background . The Act was enacted in 1980 and has been the self
storage industry's primary remedy for dealing with occupant
delinquencies for almost 30 years. The law permits the storage
operator to regain possession of the storage unit and dispose of
any contents when occupants do not pay the rent.
Existing law permits an owner to send a preliminary lien notice
either by first-class mail with certificate of mailing or
certified mail. Either notice method permits an owner to deny
an occupant access to the space on the effective date on the
lien, but an owner who selects the first-class mail method must
wait an additional 14 days before removing the property.
Currently, an owner must send a blank declaration of opposition
form to the occupant with the notice of lien sale. If the
occupant completes this form and returns it to the owner prior
to the date of the lien sale, the owner must seek a court order
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to enforce the lien. This bill puts the onus on the occupant to
either pay the rent or file a court action to prevent the lien
sale.
Support . The California Self Storage Association writes in
support, "We are not supportive solely [because AB 655] reduces
some onerous outdated provisions which will help all properties
in the state operate in a less costly manner. We also truly
believe that this is consumer friendly in that it will be easier
for operators to reach their customers that fall behind on their
rent obligations."
Opposition . The California Newspaper Publishers Association
(CNPA) writes in opposition, "AB 655 mistakenly supposes a lien
sale advertisement is merely an attempt to attract speculators.
Lien sale advertisements, published in newspapers are designed
to deputize the entire community on the issue. CNPA believes
that published notices of lien sales in newspapers distributed
in the judicial district in which the property is located
provide the best way to inform the entire community that an
important public event is to occur in the community - an event
that severs an individual's legal relationship to personal
property."
Double referred . This bill is double-referred to the Assembly
Judiciary Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
California Self Storage Association (sponsor)
103 Self Storage Facility Owners and Managers
Numerous individuals
Opposition
California Newspaper Publishers Association
Analysis Prepared by : Whitney Clark / B. & P. / (916)
319-3301