Legal Overview:
Purpose
The “Self-Service Storage Facility Act” became part of
Definition of a Facility
The Act defines a “self-service storage facility” as “any real property designed and used for the purpose of renting or leasing individual storage space to occupants who are to have access to such for the purpose of storing and removing personal property.” It clearly distinguishes such facilities from warehouses for purposes of Article 7 of the Uniform Commercial Code, removing facility owners from the obligations imposed under those UCC provisions.
The Lien
At the heart of the Act is the establishment of a facility owner’s lien on all personal property stored at a facility to cover the owner’s claims for “rent, labor, or other charges, present and future, in relation to the personal property, and for expenses necessary for its preservation, or expenses reasonably incurred in its sales or other disposition pursuant to this Act..”
The critical features of the owner’s lien are 1) it attaches as of the date the personal property is brought to the facility; 2) it is superior to any other lien or security interest except for statutory liens and security interests perfected prior thereto by proper filing; and 3) it terminates with respect to personal property only when the property is removed from the facility or is sold or disposed of pursuant to the Act to satisfy the lien.
Enforcement of the Lien
The three required steps in the enforcement process—1) notice of amount due and demand for payment; 2) advertisement of intent to sell; and 3) sale or other disposition of property—are laid-out in clear detail in the Act.
Notice and Demand
Written notice must be given to an occupant either in person or sent by certified mail to the last known address (the last provided in writing by the occupant). The notice must contain 1) an itemized statement of the amounts due and the dates when they became due, 2) a brief description of the property subject to the lien, 3) a notice of denial of access to the property (if such denial is allowed under the rental agreement), 4) contact information for responding to the notice, 5) a demand for payment within not less than 14 days, and 6) a conspicuous statement that, unless the claim is paid within the stated time, the property will be advertised for sale and will be sold at a specified time and place.
Advertisement
At the expiration of the time period identified in the notice, the facility owner is then legally authorized to pursue the sale of the occupant’s property by next publishing an advertisement of sale once a week for two consecutive weeks in a newspaper of general circulation in the locale of the facility. If there is no such paper, then the advertisement must be posted in six conspicuous locations in the vicinity of the facility for a period of ten days.
The advertisement must include 1) a brief, general description of the property; 2) identification of the facility and its address; 3) identification of the occupant and of the storage space (by number, if any) where the property is located; and 4) the intended time, place and manner of sale. In no event may the sale occur less than 15 days after the date of first publication of the advertisement.
The sale or other disposition of the property must take place in a manner consistent with the terms of the notification sent to the occupant. It must take place at the facility or at the “nearest suitable place” to where the property is stored. The facility owner may satisfy the lien from the proceeds of the sale, but must hold any excess proceeds for delivery on demand by the occupant. The excess proceeds become the property of the owner if no claim is made by the occupant within two years after the date of sale.
A purchaser who, in good faith, buys the occupant’s property at a sale to satisfy a lien under this Act, takes title free of any rights of the occupant or any other person against whom the lien is valid, even if the facility owner did not fully comply with the lien enforcement requirements of the Act.
At any time prior to the actual sale or disposition of the property, the occupant may redeem the property by paying all amounts necessary to satisfy the lien and to cover reasonable expenses incurred by the facility owner in preserving and attempting to sell the property.
Conclusion
The Act provides a clear and concise framework for addressing financial disputes between owners of self-service storage facilities and those that lease the facilities to store their personal property. The lien established by the Act offers facility owners a degree of legal protection against the financial harm that can be caused by irresponsible or unscrupulous customers. The enforcement procedures instituted by the Act guide facility owners to use responsible collection procedures and assure lessees that their legitimate due process rights against overzealous collection efforts are being protected. And, finally, the protection offered by the Act to good-faith purchasers of property sold to satisfy a lien allows the process to operate smoothly and efficiently.