BILL ANALYSIS �
SENATE JUDICIARY COMMITTEE
Senator Hannah-Beth Jackson, Chair
2013-2014 Regular Session
AB 983 (Melendez)
As Amended June 15, 2014
Hearing Date: June 24, 2014
Fiscal: No
Urgency: No
TH
SUBJECT
Self-Service Storage Facilities
DESCRIPTION
This bill would modify the California Self-Service Storage
Facility Act to allow:
self-service storage facility occupants to opt-in to receiving
required notices by electronic mail;
self-service storage facility owners to have a vehicle,
watercraft, or trailer towed from the facility if rent and
other charges have not been paid for 60 days, provided the
owner sends the occupant a 10-day advance notice, as
specified; and
parties to create additional rights, duties, and obligations
in a rental agreement, including the right to limit the value
of property an occupant may store in the storage space or the
right to limit an occupant's right to enter the premises or
storage space.
BACKGROUND
Existing law, the California Self-Service Storage Facility Act
(Act), governs self-service storage facilities and specifies
certain procedures to be followed when their occupants are
delinquent in their rental payments. When an occupant is
delinquent, the owner must first send a preliminary lien notice
that informs them that if they do not pay the amount due that
their right to use the space will terminate, they will be denied
access, and that an owner's lien will be imposed on all stored
property. If the occupant fails to pay the amount, the owner
may then send a notice of lien sale, which states that the
(more)
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property will be sold to satisfy the lien on or after a
specified date (not less than 14 days after mailing) unless: (1)
the amount of the lien is paid; or (2) the occupant executes and
returns a declaration in opposition to the lien sale. If that
declaration is executed and returned, the owner must file an
action in court to enforce the lien.
This bill, sponsored by the California Self Storage Association,
would authorize self-service storage facility owners to send
notices required under the Act to self-service storage facility
occupants via electronic mail if an occupant opts to receive
such notices via electronic mail. This bill would also
authorize an owner of a storage facility to have a vehicle,
watercraft, or trailer towed from the facility if rent and other
charges have not been paid for 60 days, provided the owner sends
all notices required under the Act, and provided the owner sends
10-day advance notice to the occupant 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. Additionally, this bill would specify that existing
law does not impair or affect the right of the parties to create
additional rights, duties, and obligations in and by virtue of
their 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 an occupant's right to enter
the premises or storage space.
CHANGES TO EXISTING LAW
Existing law , the California Self-Service Storage Facility Act,
specifies remedies and procedures for self-service storage
facility owners when occupants are delinquent in paying rent or
other charges. (Bus. & Prof. Code Sec. 21700 et seq.)
Existing law states 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.
However, 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 this Act.
(Bus. & Prof. Code Secs. 21702, 21702.5.)
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Existing law 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 which
contains all of the following:
an itemized statement of the owner's claim showing the sums
due at the time of the notice and the date when the sums
became due;
a statement that the occupant's right to use the storage space
will terminate on a specified date (not less than 14 days
after the mailing of the notice) unless all sums due are paid
by the occupant prior to the specified date; and
a notice that the occupant may be denied access to the storage
space after the termination date if the sums are not paid and
that an owner's lien may be imposed thereafter. (Bus. & Prof.
Code Sec. 21703.)
Existing law provides that if an owner sends an occupant a
preliminary lien notice by certified mail, the owner may, upon
the effective date of the lien, deny the occupant access to the
space, enter the space, and remove property for safekeeping.
(Bus. & Prof. Code Sec. 21705.)
Existing law 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. (Bus. &
Prof. Code Sec. 21705 (c).)
Existing law provides if a declaration in opposition to the lien
sale, executed under penalty of perjury, is not received by the
owner on or prior to the date specified in the notice of lien
sale, is not completed and signed by the occupant, if the
occupant cannot be contacted or served at the address provided
in the declaration, or if the occupant withdraws the declaration
in opposition to the lien sale in writing, the owner may sell
the property as specified. (Bus. & Prof. Code Sec. 21706.)
Existing law states 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, the owner may enforce the lien only
as follows: (1) file an action to enforce the lien in small
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claims court, provided that the amount of the lien is within the
monetary jurisdiction of the court; or (2) file an action to
enforce the lien in any other court of competent jurisdiction.
(Bus. & Prof. Code Sec. 21710.)
Existing law 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. (Bus. & Prof. Code Sec. 21709.)
This bill would provide, in addition to the right to foreclose
on a vehicle, watercraft, or trailer, the owner of a
self-storage facility may have the vehicle, watercraft, or
trailer towed from the premises if rent and other charges have
not been paid for 60 days and all required notices have been
sent. This bill would also provide that not less than 10 days
before having the vehicle towed, the owner shall 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.
Additionally, this bill would state that a towing company must
be licensed, as specified.
This bill would state that when a towing company takes
possession of the vehicle, watercraft, or trailer, the owner of
a self-storage facility shall not be liable for the property or
damage to the property.
This bill would provide that an owner of a self-storage facility
may send notices required by the Act to an occupant via
electronic mail if the occupant expressly agrees to accept
notice via electronic mail, if the rental agreement specifies in
bold type that notices will be given to an occupant by
electronic mail, and the owner informs the occupant of the
electronic mail address from which notices will be sent.
This bill would additionally provide that a Notice of Lien Sale
and Declaration in Opposition to Lien Sale must be sent via
postal mail to an occupant's last known address if, upon sending
these notices by electronic mail, the owner does not receive a
reply or receipt of delivery.
This bill would further provide that the Self-Service Storage
Facility Act shall not be construed to impair or affect the
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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.
COMMENT
1. Stated need for the bill
The author writes:
The California Self [Service] Storage law has not been updated
for some time. Through the years it has become evident that
the use of electronic notification would be beneficial to some
customers but the law does not permit this. . . . Also, the
Declaration of Opposition allows for the use of a P.O. Box.
However, this makes it difficult to identify where a party can
be served in a dispute. . . . Additionally, many times a
customer will leave vehicles and boats on the property when
they default on payments. This takes up valuable space and
there is no provision in law to have these items removed from
the property. . . . Finally, there have been issues where a
customer will assert that items left in a unit that are
damaged are worth more than the fair market value. The law is
unclear on whether parties can agree to a maximum value of the
unit's contents.
2. Notification by electronic mail
This bill would modify the Self-Service Storage Facility Act to
allow consumers to receive notices pertaining to nonpayment of
rent and liens by electronic mail, provided the following four
conditions are met: the occupant expressly agrees to accept
notice by electronic mail; the rental agreement executed by the
occupant specifies in bold type that notices will be given to
the occupant by electronic mail; the owner provides the occupant
with the electronic mail address from which notices will be
sent; and the owner notifies the occupant of any change in that
electronic mail address prior to an address change.
Staff notes that the Legislature has previously authorized
consumers to receive certain notices by electronic mail,
including under the Davis-Stirling Common Interest Development
Act, which allows homeowners to receive documents from a
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homeowners association by electronic delivery if the recipient
has consented, in writing, to that method of delivery. (Civ.
Code Sec. 4040.) Like that provision, this bill requires the
express written consent of a self-storage customer before an
owner may deliver required notices by electronic mail. Unlike
postal mail, electronic mail allows an owner and occupant to
communicate almost instantaneously about critical issues such as
the nonpayment of rent. By not having to wait for postal
delivery of such things as preliminary lien notices, this bill
arguably helps consumers react to and address problems with a
self-storage owner more quickly than would be possible using
postal mail, and eliminates the possibility that consumers will
be harmed by adverse events that could have been avoided had the
consumer received notice more promptly.
Additionally, this bill includes certain safeguards to protect
against the possibility that misdirected electronic mail would
adversely affect a consumer. For example, in instances where an
owner sends a Notice of Lien Sale and accompanying Declaration
of Opposition to an electronic mail address but receives no
reply or receipt of delivery, this bill would require an owner
to dispatch printed copies of the same to an occupant via postal
mail to help ensure they are actually received.
3. Towing of vehicles
A second feature of this bill is that it would permit a storage
facility operator to have a vehicle, watercraft, or trailer
towed from a self-storage facility prior to a lien sale if rent
has not been paid for a period of 60 days, provided the operator
gives the occupant a 10-day advance notice that the vehicle will
be towed and also notifies the occupant of the location where
the property (if towed) can be redeemed. The bill further
requires that an owner authorize only a licensed towing company
to tow and store removed vehicles offsite.
Of note, the bill states that "[w]hen 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."
Staff observes that under existing law, when a licensed towing
company takes possession of a towed vehicle, the towing company
is already liable for damage to the vehicle that occurs in
transit or during its subsequent storage. (See Veh. Code Sec.
22658(f).) Consequently, a self-storage owner is likely not
liable already for property damage caused after a towing company
takes possession of a vehicle, watercraft, or trailer under
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existing law.
However, it is unclear whether allowing a third-party towing
company to tow and store vehicles in the manner contemplated
would result in increased costs to the renters of storage units.
Ostensibly, the owner of a storage facility would be able to
pass any towing and/or outside storage costs on to the renter
via a rental agreement or contract, ultimately resulting in
increased costs being imposed on the consumer. Staff notes that
the 10-day advance notice requirement would give a renter one
last chance to take corrective action prior to his or her
property being towed.
4. Additional provisions
Finally, this bill would enact a series of additional clarifying
changes to the Self-Storage Facility Act. One such change may
be more substantive than clarifying. Under existing law, the
Act expressly states that it 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 a rental agreement.
(Bus. & Prof. Code Sec. 21713.) This bill would amend that
provision to state 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. This "clarifying" change in the
statute could be interpreted as giving a storage facility
operator new authority to restrict an occupant's right to enter
the premises or storage space by contract in a manner more
restrictive than that provided for in the Act, which allows for
the termination of an occupant's right to use the storage space
after 28 consecutive days of non-payment of rent. To eliminate
any possibility that such a construction could be applied to
this section of the bill, the author has agreed to strike the
proposed language in the following amendment:
Author's Amendment :
On page 9, lines 1 and 2, strike "or the right to limit the
occupant's right to enter the premises or storage space"
Additionally, the author has noted that a number of other
changes proposed in an earlier version of this bill have been
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unintentionally retained in the current version. The author
offers the following amendments to strike these inadvertent
changes:
Author's Amendment :
On page 5, line 39, strike "by" and insert "within 14 days of
"
On page 6, strike line 38, strike the entirety of page 7, and
insert:
DECLARATION IN OPPOSITION TO LIEN SALE
You must complete all sections of this declaration. If the
owner cannot contact or serve you at the physical address and
telephone number that you provide below, this declaration
shall be void and the owner may sell your stored property. I,
_____ (occupant's name) _____, have received the notice of
lien sale of the property stored at _____ (location and space
#) _____. I oppose the lien sale of the property because
(provide a brief explanation of the reason the owner's lien
may not be valid. For example, "I have paid my rent and other
charges in full"):
My current address and telephone number are:
(physical address)
(city)
(state)
(ZIP Code)
(telephone number)
I understand that the lienholder may file an action against me
in any court of competent jurisdiction, including small claims
court, at the address provided above, and if a judgment is
given in his or her favor, I may be liable for the court
costs. I also understand that this declaration is not valid
if (a) the address provided in this declaration is not my
current address or (b) I change my address at any time prior
to service of an action on the lien and I do not provide the
owner the address within 10 days of the change.
I declare under penalty of perjury that the foregoing is true
and correct, and that this declaration was signed by me on
_____ (date) _____ at _____ (place) _____.
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(signature of occupant).
Return this declaration to:
(self-service storage facility address)
Support : A Storage Place - Hemet; American Self Storage;
American Self Storage of Santa Maria; American Self Storage of
Stockton; Chancello Group, Inc.; Caster Properties/A1 Self
Storage; RV Storage Depot; Schmitt & Co.; Security Public
Storage; SKS Management; StoragePRO, Inc.; Storage Solution;
Sure Save American Self Storage
Opposition : None Known
HISTORY
Source : California Self Storage Association
Related Pending Legislation : None Known
Prior Legislation :
SB 279 (Emmerson, Chapter 65, Statutes of 2011) required lien
sales concerning property in a self-storage facility to be
advertised in a newspaper of general circulation in the judicial
district where the sale is to be held.
AB 655 (Emmerson, Chapter 439, Statutes of 2010) revised the
existing declaration of objection that permits an occupant of a
self-service storage facility to object to a lien sale;
standardized the time frame in which an owner may deny an
occupant access to a space, enter the space, and remove the
property for safe keeping; and enhanced the notice of lien sale.
AB 790 (Frommer, Chapter 267, Statutes of 2003) authorized an
owner to provide a 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 certified
mail.
AB 2263 (Correa, Chapter 156, Statutes of 1996) authorized
self-storage facilities to assess a reasonable late payment fee
for delinquent rental fee payments based on the monthly rent of
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the facility.
Prior Vote :
Senate Committee on Judiciary (Ayes 2, Noes 3) (Failed passage,
reconsideration granted)
Senate Business, Professions and Economic Development Committee
(Ayes 10, Noes 0)
Assembly Floor (Ayes 72, Noes 3)
Assembly Business, Professions and Consumer Protection Committee
(Ayes 11, Noes 1)
Assembly Judiciary Committee (Ayes 9, Noes 0)
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