Enforcing liens on personal property stored in self-service storage facilities and units, towing a vehicle of a lessee in default, authorizing the sale of self-service storage limited lines insurance, and providing a penalty. (FE)

Currently, an operator may charge a late fee each month that a lessee does not pay the rent within five weekdays after the rent is due. The bill changes the time for when a late fee may be charged to five days, rather than weekdays, after the rent is due.

Currently, an operator must give two notices to the lessee that he or she is in default in the payment of rent or that rent has not been paid for personal property left behind after the termination of the rental agreement. The first notice must be sent by regular mail and must contain various types of information, including that the lessee has failed to pay rent for storage of the personal property and a general description of the personal property that is subject to the lien for payment of rent.

The second notice must be sent by certified mail or first class mail with a certificate of mailing. This notice must contain a statement that there is a lien on the personal property being stored in the leased space and a general description of the property subject to the lien. The bill provides that the first notice must be sent by regular mail or electronic mail and that the second notice must be sent by electronic mail or any method of mailing offered by the U.S. Postal Service or other commercial mail delivery service that provides evidence of mailing. The notices may be sent by electronic mail only if there is confirmation of receipt. The bill also removes the requirement that the notices contain a general description of the personal property that is being stored and that is subject to the lien for payment of rent, but requires the operator to make available to the lessee, upon the lessee's request, either photographs or a video of the personal property.

Under current law, if the lessee does not redeem the property after notice by paying the rent and any other charges that the lessee owes, the operator may sell the property after advertising the sale once per week for two consecutive weeks in a newspaper of general circulation where the facility is located. The bill changes the advertising requirement to one publication in a newspaper of general circulation and removes the requirement that the advertisement contain a general description of the property to be sold. The bill also clarifies that in order for the lessee to redeem his or her personal property, he or she must make full payment of all rent and other charges owed.

Under current law, if the personal property is sold, it must be sold at a public sale with three or more bidders, offered for sale privately to at least three persons who deal with the type of property that is for sale, or sold in another manner that is commercially reasonable. The sale must take place at the facility or the unit of the facility where the property is located or at the nearest suitable place to the place where the personal property is stored. The bill expressly provides that a commercially reasonable manner of sale includes sale by means of the Internet, and provides that, in addition to the physical locations in current law, the sale of the property may be conducted at an Internet site that is reasonably expected to attract bidders. Additionally, the bill provides that an operator may postpone for up to 14 days a sale that is advertised to be held at a physical location if the weather is inclement on the day the sale was advertised to be held. The advertisement for the new date must indicate the original date, that the sale was postponed, and the reason for the postponement. At least five days before the sale, the operator must send notice to the lessee, by regular mail or, if receipt is confirmed, by electronic mail, stating that the sale was postponed and providing the new date, time, and place of the sale.

Under current law, if the operator sells the personal property, the sale proceeds must first be applied to satisfy the lien for the overdue rent and other charges and then any balance must be delivered to the Secretary of Revenue to be disposed of as unclaimed property. The bill changes this so that the proceeds first must be applied to satisfy the lien, then any balance must be returned to the lessee. If the operator is unable after due diligence to locate the lessee, however, the operator must deliver the balance to the Secretary of Revenue as under current law.

Towing vehicles stored in self-service storage units and facilities Under current law, if a vehicle is parked without authorization on private property, the vehicle may be removed (towed) immediately, at the vehicle owner's expense and without the owner's permission, if: 1) a citation for illegal parking has been issued; or 2) the private property is posted with a clearly visible notice that it is private property and vehicles parked without authorization may be immediately towed. A vehicle illegally parked on private property may be towed only by a towing service at the request of the property owner or property owner's agent or of a traffic officer or parking enforcer. Before the vehicle is towed, the towing service must notify a local law enforcement agency of the make, model, vehicle identification number, and registration plate number of the vehicle and the location to which the vehicle will be towed. The vehicle owner must pay the reasonable charges for towing and, if applicable, storage of the vehicle, as well as any service fee, not exceeding $35, imposed by the municipality where the vehicle was parked. However, the towing service may not collect any towing or storage charges if the towing service failed to notify law enforcement before towing the vehicle. The towing service may impound the vehicle until its charges are paid and, if the charges are not paid within 30 days or arrangements for installment payments are not made, the vehicle is considered abandoned and may be disposed of as are other abandoned vehicles.

Under this bill, an operator may have a vehicle stored in a unit or facility towed, at the vehicle owner's expense, without the permission of the vehicle owner and without an illegal parking citation being issued, if: 1) the lessee failed to pay rent or other charges under a rental agreement for at least seven consecutive days after the due date; 2) the operator provided to the lessee two notices containing certain information related to the lessee's default and the second notice was sent after the lessee had failed to pay rent or other charges for more than 60 consecutive days after the due date under the rental agreement; and 3) the lessee failed to timely redeem the vehicle. Provisions of current law relating to the towing of illegally parked vehicles from private property also apply, including that the vehicle may be towed only by a towing service at the request of the operator or of a traffic officer or parking enforcer.

Self-service storage insurance The bill authorizes, and establishes requirements for, the sale of self-service storage insurance (insurance) by an operator, or by an employee or representative of the operator, covering personal property stored in the unit or at the facility. The operator or employee or representative is not required to hold a certificate of authority as an insurer or a license as an insurance intermediary to offer or sell the insurance only if the operator complies with the statutory requirements; the insurer issuing the insurance supervises, or appoints a supervising entity to supervise, the administration of the sale of the insurance; the supervising entity, or insurer if no supervising entity is appointed, maintains a registry of operators and locations at which operators or employees or representatives may offer or sell the insurance, which registry must be made available to the commissioner of insurance (commissioner) upon request; and any operator who is an individual, or any employee or representative of the operator, who intends to offer or sell insurance must complete a training program, developed and administered by the insurer or supervising entity, that provides basic instruction about the insurance.

Under the bill, the insurance is issued to the operator as a group or master commercial policy, and an individual (customer) who leases a unit or space in a facility from the operator may purchase coverage under the insurance policy to protect his or her personal property stored in the unit or at the facility from loss or damage during the term of the rental agreement for the unit or facility space. The bill prohibits an operator or employee or representative from advertising or representing that he or she is an insurance intermediary if he or she does not hold such a license; provides that an operator may not base an employee's or representative's compensation primarily on the number of customers who purchase coverage; requires an operator to remit all moneys collected from customers to the insurer; and authorizes an insurer to compensate an operator for billing and collection services.

The bill requires an operator to separately itemize any charge for the insurance that is not included in the cost of leasing the unit or space, and, if the charge for the insurance is included in the leasing cost, that must be clearly and conspicuously disclosed. Additionally, at every location where the insurance is offered to customers, the operator must make available written materials that provide specific information, such as the identity of the insurer, the amount of the deductible, the terms of coverage, how to make a claim, that the coverage may duplicate coverage under the customer's homeowner's or renter's policy, and, if insurance is required as a condition of leasing the unit or space, that the customer may satisfy that requirement by presenting evidence of other comparable insurance coverage. The bill specifies what happens if the insurer changes the policy terms or the operator or insurer terminates the policy; under what circumstances an insurer may terminate a customer's coverage; and the penalties that the commissioner may impose if an operator or an employee or representative violates any of the new provisions.