BILL NUMBER:S6201A

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:

None

FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None known.

EFFECTIVE DATE:  This act shall take effect January 1, 2016.