The SSA has a robust legislative agenda planned for 2022. SSA intends to pursue lien law amendments in California, Florida, Georgia, Illinois, Minnesota, Missouri, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, South Carolina, South Dakota, Vermont, and Virginia. Also, SSA intends to pursue a self storage lien law in Alaska – the last remaining state without such a law.
As background, the SSA typically seeks seven core amendments to laws in states that have not previously adopted them. Overall, these amendments aim to reduce costs, streamline operations, and limit liability for the operator as outlined in more depth below.
SSA members can monitor all legislative developments here
Newspaper advertising. Historically, nearly all state lien laws required advertisements in the newspaper before an operator could proceed to sale. This is an outdated requirement. In recognition of the decline of newspaper readership and the growth of online channels, the SSA seeks to allow storage operators to advertise online through auction websites and sites such as Facebook Marketplace and Craigslist. Currently, 28 states permit alternative advertising or have no advertising requirement at all. In 2022, SSA intends to pursue advertising amendments in Florida, Georgia, Illinois, Minnesota, Missouri, New Jersey, New York, Pennsylvania (reduction of advertising requirement from 2 to 1), Rhode Island, South Carolina, South Dakota, Vermont, and Virginia.
Notice by verified mail. SSA seeks to amend state lien laws to eliminate the requirement that lien notices be sent via certified mail and instead permit those notices to be sent by verified mail. Verified mail is a term of art and includes U.S. Mail with certificate of mailing. U.S. Mail with certificate of mailing provides proof that the notice has been sent and automatically forwards to a new address. This provides a greater assurance that the tenant will receive the notice and is less expensive than certified mail. Currently, 46 states permit operators to send lien notices via verified mail as opposed to certified mail. In 2022, SSA intends to pursue amendments to permit notice to be sent by verified mail in Alaska and Vermont.
Notice by email. Many self storage tenants are in transition and prefer to receive lien and other notices via email. Unlike physical addresses, email addresses typically remain the same when an individual moves. Approximately 40 states permit operators to send lien notices via email. In 2022, SSA intends to seek legislative changes to permit required notices to be sent exclusively by email in Alaska, South Dakota, and Vermont.
Contractual value limitation. Many operators include in their rental agreement a limitation of the value of the property that the tenant may store in the unit. Value limitations are a necessary tool for operators because they have no reasonable means to know the type or value of property that customers are storing on a self-service basis. Currently, 37 states have established statutory protection for this provision. In 2022, SSA intends to pursue legislative changes in Alaska, South Dakota, and Vermont to recognize this provision in statute.
Online sales. Online sales can expand the audience of potential bidders by allowing bidders to submit bids without attending a one-day sale in person. More bidders can increase the likelihood of higher bids. SSA seeks to expressly permit operators to conduct any lien sales online while also retaining the ability to hold those sales “live” at the facility. Currently, 36 states expressly permit auctions to be conducted online. In 2022, SSA intends to seek this change in Alaska, New York, Rhode Island, South Carolina, South Dakota, and Vermont.
Optional towing. Many storage operators do not want to go through the process for selling vehicles, watercraft, and trailers. The process can be cumbersome, and many operators are not frequently called upon to conduct these sales. Towing avoids the need for a sale and allows operators to return the space to inventory faster. Currently, 43 states expressly permit optional towing, while operators retain the right to sell vehicles, watercraft, and trailers if they wish to do so. In 2022, SSA intends to seek towing amendments in Alaska, Ohio, South Dakota, and Vermont.
Late fee safe harbor. Many states have a late fee safe harbor of up to $20 or 20% of the monthly rent, whichever is greater. These amounts strike an appropriate balance to compensate the operator for delinquent payment while not being overly burdensome to the tenant. Currently, 34 states recognize a late fee in statute. In 2022, SSA intends to seek a late fee safe harbor in Alaska, Rhode Island, South Dakota, and Vermont.
Tenant insurance. Outside of the lien laws, the SSA has supported legislation to establish licensing or licensing exemptions to sell tenant insurance. These policies cover loss of or damage to tenants’ stored property. Currently, 42 states permit owners to obtain a limited lines license to sell tenant insurance or have an express exemption from licensing. In 2022, SSA intends to pursue tenant insurance bills in Iowa, Idaho, and Rhode Island.
[Defensive Measures]
In addition to offensive legislation, SSA also opposes negative threats to the industry. The pandemic presented unique challenges, such as proposed lien sale moratoriums in both New York and Michigan. The SSA was able to either defeat many of the negative bills or significantly limit their impacts, while also handling pro-active legislation, as shown in the legislative timeline below:
In 2022, the SSA’s agenda will also include opposition to tax issues and negative lien law changes in states such as Arizona, Nebraska, New Jersey, New York, Virginia, and West Virginia. SSA also expects to oppose threats in major markets such as Miami, Chicago, Seattle, and New York City. Please contact Joe Doherty and Daniel Bryant if you hear of any negative legislative proposals in your area(s) of operation.
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