To mix metaphors, if at first you don’t succeed, then get back on that horse and ride! At this time a year ago CSSA officials were trying to figure out why Bill AB 983 had not advanced through the 2013 session of the California Legislature following a promising start. After a few changes were made to make the bill more palatable to legislative members in 2014 the good news is that it made it through the legislature and was recently signed into law by Governor Brown on September 29.
The bill, intended to help self storage operators dealing tenants storing vehicles, boats or trailers as well as the value of stored property, finally gathered steam as the summer progressed and was voted to become a law prior to the summer session of the California State Legislature closing on August 31.
“I am pleased with the changes that we were able to get passed on AB 983 because they serve to help every owner/operator in California,” said Erin King, Executive Director of the CSSA. “We hope to address the issue of e-mailing lien notices in the future with the California legislature. I know the CSSA and SSA will continue to work on getting it through in the coming years. Whether we go back next session or wait a year or so remains to be decided.”
In essence, here are the major points of the bill that self storage owner/operators and managers need to know:
The new law will go into effect on January 1, 2015 and will provide self storage operators with an additional remedy when delinquent tenants store vehicles, boats or trailers. Instead of going through the complicated and often very slow Department of Motor Vehicle procedures for selling licensed vehicles and boats, operators will have the option of having vehicles and boats towed from the facility when rent is not been paid for 60 days or more. The towing will often prove to be a better option than the DMV lien process for vehicles and boats. The operator loses its lien on the vehicle or boat once it is towed; however, the operator can still bring an action in small claims court for unpaid rent and other charges.
The law requires the operator to send the occupant notice at least 10 days before the vehicle or boat is removed from the facility. The notice must be sent to the occupant’s last known address by first class mail with a certificate of mailing. The notice must include the name, address and telephone number of the towing company and the street address of the location where the vehicle or boat will be stored. The storage operator will have no further liability for the vehicle or boat once it is towed from the facility.
The bill also makes a technical change to the Declaration in Opposition to Lien Sale form. The current form requires the occupant to provide an “address” where he or she may be served. The revised form states that the occupant must provide a “Physical Address.” This change was made because some delinquent tenants would provide a post office box and not a physical address where the owner could serve a suit to foreclose when a Declaration was returned.
The bill also makes it clear that self storage operators may include a provision in the rental agreement that limits the value of the property that customers store. Such provisions have proven very effective at limiting damages when tenants bring suits for loss of or damage to stored property.
Storage operators that do not now have a limit on the value of property a tenant may store should consider including one in their rental agreement. It is recommend that the basic limit be set at an amount that reflects the value of property that the typical tenant stores. It is also a good idea to allow this amount to be increased with the written permission of the facility operator. The California Model Rental Agreement offered by the CSSA includes a value limitation that states:
Occupant agrees not to store property with a total value in excess of $5,000 without the written permission of the Owner. If such written permission is not obtained, the value of Occupant's property shall be deemed not to exceed $5,000.
Most operators set their basic value of property at between $2,500 and $10,000, depending on the area where their facility is located. The lower value is more commonly found in the rural areas of the state and the higher amount in cities like Los Angeles, San Diego and San Francisco.
“Many thanks to the national SSA, Carlos Kaslow and everyone else who helped get AB 983 passed,” concluded King. “We know we still have work to do and we will remain committed to bringing about positive changes for the self storage industry in California.”