SSA Announces 2023 Legislative Agenda
(SSA MEMBERS CAN MONITOR ALL LEGISLATIVE DEVELOPMENTS HERE)
The SSA has a robust legislative agenda planned for 2023. In conjunction with state associations, SSA intends to pursue lien law amendments in California, the District of Columbia, Florida, Indiana, Kansas, Missouri, New Jersey, New Mexico, New York, Ohio, Oregon, Rhode Island, Virginia, Texas, and Wisconsin. 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.
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 This is an outdated requirement.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, 32 states permit alternative advertising or have no advertising requirement at all. In 2023, SSA intends to pursue advertising amendments in Alaska, California, the District of Columbia, Florida, Missouri, New Jersey, New Mexico, Oregon, Rhode Island, Texas, and Wisconsin.
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, 47 states permit operators to send lien notices via verified mail as opposed to certified mail. In 2023, SSA intends to pursue amendments to permit notice to be sent by verified mail in Alaska and the District of Columbia.
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. More than 40 states permit operators to send lien notices exclusively via email. In 2023, SSA intends to seek legislative changes to permit required notices to be sent exclusively by email in Alaska.
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, 39 states have established statutory protection for this provision. In 2023, SSA intends to pursue legislative changes in Alaska, New Mexico, and Ohio 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, more than 40 states expressly permit auctions to be conducted online. In 2023, SSA intends to seek this change in Alaska, the District of Columbia, and Rhode Island.
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, 45 states expressly permit optional towing, while operators retain the right to sell vehicles, watercraft, and trailers if they wish to do so. In 2023, SSA intends to seek towing amendments in Alaska, the District of Columbia, Kansas, and Virginia.
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, 36 states recognize a late fee in statute. In 2023, SSA intends to seek a late fee safe harbor in Alaska and New Mexico.
Other Offensive Measures
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, 43 states permit owners to obtain a limited lines license to sell tenant insurance or have an express exemption from licensing. In 2023, SSA intends to pursue tenant insurance bills in Connecticut, Idaho, Iowa, and Wisconsin.
Property taxes: In 2022, the SSA passed first-of-its-kind property tax relief legislation in Indiana. The bill ensures the fairness of property taxes assessments for self storage facilities in the state. The bill requires an assessment based upon the true tax value of the facility, which must be determined based solely on the land and the improvements, less normal depreciation and normal obsolescence, and must exclude business intangible value. Business intangible value is any value of the self-service storage facility and related business operations in excess of the depreciated replacement cost of the improvements and the value of the land. Although the assessor may consider the three typical methods of assessing property, the assessor must select the lowest of the three while taking into account the requirements stated above. The SSA intends to pursue similar bills in 2023 in Arkansas and Idaho and is also looking at reform options in Kansas, New Hampshire, and Pennsylvania.
Defensive Measures
In addition to offensive legislation, SSA also opposes negative threats to the industry. Please contact the SSA if you hear of any negative legislative proposals in your area(s) of operation.