Relates to liens on self-service storage facilities.
TITLE OF BILL: An act to amend the lien law, in relation to liens on self-service storage facilities
PURPOSE OR GENERAL IDEA OF BILL: The purpose of the bill is to provide greater protection for the occupants of self-service storage facilities by strengthening the notice requirement in relation to the lien sale.
SUMMARY OF PROVISIONS:
Section 1 of the bill amends subdivision 7 of section 182 of the lien law to require two notices be provided to the occupants as well as an alternative contact person prior to conducting a lien sale. It requires that the second notice be personally delivered or sent between five and ten days after the first notice has been delivered. The occupants will have at least 30 days from the receipt of the second notice to pay the amount due or bring a special proceeding to dispute the validity of the lien or the amount claimed.
Section 2 of the bill amends subdivision 2 of section 182 of the lien law by adding a new sentence to paragraph (c), requiring every occupancy agreement to state conspicuously that the occupant's personal property in a leased space will be subject to a claim of lien and can be sold to satisfy the lien if he/she defaults or fails to pay rent for the storage of personal property abandoned after the termination of the agreement. It also adds a new paragraph (d) to require that every occupancy agreement to ask for the name and address of another person to whom the required notices may be sent. However, failure of an occupant to provide an alternative address shall not affect an owner's remedies under this section or under any other provision of law.
Section 3 provides for this act to take effect January 1, 2016.
JUSTIFICATION: In recent years, storage auctions have gained much popularity as a result of televisions shows such as Storage Wars and Auctions Hunters where bidders uncover treasures and antiques that are worth thousands of dollars. These shows have not only increased awareness of storage auctions, but also attracted more people to participate in the auction process in the hope that they too will find valuable items. Given the increased demand for storage auctions, it has become even more important to ensure that storage unit occupants are given sufficient notice to recover their personal property before it is auctioned off.
Under the Lien Law, self-service storage facility owners have lien enforcement rights to collect overdue fees and to recover their storage space from delinquent occupants by conducting a lien sale of their personal property. Unlike most auctions, where a bid is placed on a single item, it is a usual commercial practice for bidders in storage unit auction to bid on the entire contents of the unit.
Prior to conducting this auction, storage facilities owners are required to deliver a pre-lien notice to the occupant, stating that the goods will be advertised for sale and sold at public or private
sale unless he/she pays within a specified time, that are not less than 10 days.
However, the problem arises when this one-time notice is not properly delivered to the occupant. Since storage auctions can allow the sale of the entire contents of the unit without inspecting and inventorying each item, occupants may be unfairly prejudiced if they do not receive the notice, especially when the stored property includes valuable items. In addition, the current law provides only 10 days for the occupant to bring a special proceeding upon the service of the notice to dispute the validity of the lien or the amount claimed. For people who are unfamiliar with the legal proceeding, 10 days may not give them enough time to file the necessary paperwork to initiate the proceeding.
In order to prevent premature and wrongful sale of property, the legislation strengthens the notice requirement in relation to the owner's enforcement rights. Under this bill, the occupancy agreement must include a conspicuous notice that the occupant's personal property in the leased space will be subject to a claim of lien and can be sold to satisfy the lien upon default of abandonment of the stored items. In addition, the owner must make two attempts to contact the occupant as well as any alternative person that the occupant lists in the occupancy agreement. The bill allows at least 30 days from the receipt of the second notification for the occupants to cure the default by paying the outstanding fees. Furthermore, it extends the time limit for bringing special proceeding from 10 days to 30 days of the service of the second notice.
PRIOR LEGISLATIVE HISTORY:
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
EFFECTIVE DATE: This act shall take effect January 1, 2016.
STATE OF NEW YORK ________________________________________________________________________ 6201--A IN SENATE (PREFILED) January 8, 2014 ___________Introduced by Sen. AVELLA -- read twice and ordered printed, and when printed to be committed to the Committee on Judiciary -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the lien law, in relation to liens on self-service stor- age facilities THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subdivision 7 of section 182 of the lien law, as added by chapter 975 of the laws of 1983, is amended to read as follows: 7. Enforcement of lien. An owner's lien may be enforced by public or private sale of the goods that have been removed from the storage space at a self-service storage facility, in block, or in parcel, at any time or place and on any terms which are commercially reasonable after DUAL notice to all persons known to claim an interest in the goods. The
[notice]NOTICES shall include an itemized statement of the amount due, the description of the property subject to the lien, the nature of the proposed sale, a demand for payment within a specified time not less than [ten]THIRTY days from receipt of THE SECOND notification and a conspicuous statement that unless the claimant pays within that time the goods will be advertised for sale and sold at public or private sale in a commercially reasonable manner. The [notice]NOTICES shall further include the time and place of any public or private sale and it shall state that any person claiming an interest in the goods is entitled to bring a proceeding hereunder within [ten]THIRTY days of the service of the SECOND notice if he disputes the validity of the lien, or the amount claimed. The [notice]NOTICES shall be personally delivered to the occu- pant AND TO THE ALTERNATIVE PERSON, or sent by registered or certified mail, return receipt requested, to the occupant to the last address provided by the occupant AND TO THE ALTERNATIVE ADDRESS, pursuant to the occupancy agreement. THE SECOND NOTICE SHALL BE PERSONALLY DELIVERED OR SENT BETWEEN FIVE AND TEN DAYS AFTER THE FIRST NOTICE HAS BEEN PERSONALLY DELIVERED OR SENT.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD13207-04-4 S. 6201--A 2
S 2. Paragraph (c) of subdivision 2 of section 182 of the lien law, as added by chapter 975 of the laws of 1983, is amended and a new paragraph (d) is added to read as follows: (c) Every occupancy agreement as required by this section shall contain the following conspicuous notice: "Notice: The monthly occupancy charge and other charges stated in this agreement are the actual charges you must pay. YOUR PERSONAL PROPERTY IN A LEASED SPACE WILL BE SUBJECT TO A CLAIM OF LIEN AND CAN BE SOLD TO SATISFY THE LIEN IF YOU DEFAULT OR FAIL TO PAY RENT FOR THE STORAGE OF PERSONAL PROPERTY ABANDONED AFTER THE TERMINATION OF THE AGREEMENT". (D) EVERY OCCUPANCY AGREEMENT AS REQUIRED BY THIS SECTION SHALL ASK FOR THE NAME AND ADDRESS OF ANOTHER PERSON TO WHOM THE REQUIRED NOTICES MAY BE SENT. FAILURE OF AN OCCUPANT TO PROVIDE AN ALTERNATIVE ADDRESS SHALL NOT AFFECT AN OWNER'S REMEDIES UNDER THIS SECTION OR UNDER ANY OTHER PROVISION OF LAW. S 3. This act shall take effect January 1, 2016.