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Wednesday, February 21, 2024
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SSA Blog

©2024 by the Self Storage Association (SSA). SSA and SSA Magazine are trademarks of the Self Storage Association, Inc. Opinions expressed by authors and other contributors do not necessarily reflect those of the SSA, publisher or editors, nor do they represent the policy or positions of the SSA. Information contained within articles should not be construed as the primary basis for legal or investment decisions.

07

SSA Announces 2024 Legislative Agenda

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SSA Announces 2024 Legislative Agenda

SSA Announces 2024 Legislative Agenda

 

The SSA has a robust legislative agenda planned for 2024. SSA intends to pursue lien law amendments in Arizona, California, Florida, Georgia, Idaho, Illinois, Kansas, Maryland, Massachusetts, Minnesota, Missouri, Nevada, New Jersey, New York, Ohio, Pennsylvania, Puerto Rico, Rhode Island, Utah, and Virginia. Also, the SSA intends to continue to pursue a self storage lien law in Alaska – the last remaining state without such a law. A lien bill in the District of Columbia already had a committee hearing and will be considered further in 2024.

 

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 track all of the bills here - updated regularly)

 

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 This is an outdated requirement.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 2024, SSA intends to pursue advertising amendments in Alaska, the District of Columbia, Florida, Idaho, Maryland (consumer consent), Minnesota, Missouri, Nevada (prework for 2025 session), New Jersey, Pennsylvania (ad timing), and Rhode Island.

 

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 2024, 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 2024, 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, 40 states have established statutory protection for this provision. In 2024, SSA intends to pursue legislative changes in Arizona, Alaska, and Ohio (clean up) 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 2024, SSA intends to seek this change in Alaska and the District of Columbia.

 

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, 46 states expressly permit optional towing, while operators retain the right to sell vehicles, watercraft, and trailers if they wish to do so. In 2024, SSA intends to seek towing amendments in Arizona, Alaska, the District of Columbia, and Virginia (trespass towing for unauthorized storage).

 

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.

 

If you are uncertain about the adoption status of any of the changes outlined above in your state(s) of operation, please visit the Legal Resource Center at the SSA’s website.

 

New Amendments

 

As reported in the last edition of the SSLR (you must be a member to log in to the Self Storage Legal Review page), the SSA also intends to expand the scope of self storage facility act amendments in 2024. In addition to those changes outlined above, the SSA intends to seek amendments to address the issues of an unsigned rental agreement and nonmonetary defaults.

 

Unsigned agreement. Most owners have executed rental agreements for their tenants. However, sometimes issues may arise and there is not a signed agreement on file. This can become problematic, especially if the owner needs to enforce their lien rights. The SSA is seeking amendments to address that issue. The amendment will provide express statutory authority to bind tenants to a new rental agreement if they continue to use the space or pay rent. If this amendment is approved, then the owner is on firm legal grounds to enforce their rental agreement and their lien rights, should that prove necessary. In 2024, the SSA intends to seek this change in several states including Georgia, Kansas, and Virginia.

 

Nonmonetary default. Storage operators are familiar with the lien remedy. When the occupant stops paying the process starts -- overlocking the unit, sending notices, and finally, if necessary, selling the contents of the unit to partially recoup losses and return the unit back to inventory. However, this straightforward remedy is only available when the tenant stops paying their rent. What do you do if the tenant is good about paying their rent but, for example, is living in the unit or is using their unit for unlawful purposes? The answer has traditionally been you need to hire a lawyer and start the court eviction process. In 2024, the SSA is seeking a legislative fix to this “nonmonetary default” issue for nuisance tenants in several states including Idaho, Kansas, and Utah. If successful, it would permit owners to dispose of or sell any remaining property in the unit after a certain number of days following delivery of termination or nonrenewal notice.

 

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 2024, SSA intends to pursue a tenant insurance bill in 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. Similar bills passed in 2023 in both Arkansas and Idaho. The SSA may pursue analogous bills in 2024. Please contact the SSA if you have concerns with significant property tax increases in your state.

 

Defensive Measures

 

In addition to offensive legislation, SSA also opposes negative threats to the industry. So far in 2024, the SSA is already aware of legislation harmful to the industry filed in Florida and Georgia. Most significantly, the Georgia bill includes provisions imposing rent control on self storage operators. The SSA also expects a sales tax bill in Nebraska and legislation attacking the New York lien law remedy. Additionally, we are monitoring for a return of several negative bills filed in New York City last year. Please contact the SSA if you hear of any negative legislative proposals in your area(s) of operation.

 

 

 

 

 

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