M4S Blog

New Changes in the Lien Law Process

As a self storage owner, operator, or manager, we know that the lien process becomes very tedious and sometimes problematic. There are so many precise steps and timelines you must follow in order to meet the requirements set forth by the California Business and Professions Code, and to ultimately avoid litigation of any sort. Luckily, the California Self Storage Association and a large network of self storage operators have been working towards legislation that will erase some of the steps in the lien process.

California Assembly Bill 655 was introduced to legislation in 2009 by Mary Hayashi, Chair of the Business and Professions Committee. The first bill sought to eliminate the Declaration in Opposition of Lien Sale notice completely, however legislators thought this was too large of a change. If you are unfamiliar with the Opposition of Lien Notice, it is a document that is sent to the tenant that allows them to oppose the lien and sign off that they understand that the lien holder can file action in court against them and they may be liable for court costs. It is a means for a tenant to get out of lien and cause the self storage owner to spend more time and money trying to get a judgement to sell the unit. Amendments to California Assembly Bill 655 were passed by Senate on Friday, August 20, 2010 with a 30-0 vote. The amendment allows delivery of all pre-lien and lien notices via First Class Mail instead of the more expensive Certified Mail. The Declaration in Opposition to Lien will now require a tenant to explain why their lien is not legally valid before returning the Declaration, giving the facility owner a better understanding. In order for these new steps to take effect, the bill must now be passed by the State Assembly and then Governor Arnold Schwarzennegger.

 

How does it apply to you?

If  the law passes, the costs will be lower when sending out your notices. First Class Mail only requires a $0.44 stamp, whereas certified mail requires filling out a mailing card and paying the certified mail fee. Operators will be saving more money in litigation as well because  the revised law would allow lien holders to file suit in small claims court, rather than the present superior court protocol. Lastly, the Declaration can be deemed invalid if the tenant does not provide a valid address or they do not state why the lien in legally invalid.

 

 

What's Next?

The law will now be passed off to the Assembly and then to Governor for approval. Self Storage advocates are also working to someday eliminate the newspaper notifications, but this may be a time consuming change. There have also been a few minor changes to public sale rules in the Business and Professions Code regarding personal information disposal, so make sure your self storage managers are educated. Several self storage attorneys and the CSSA provide educational manager workshops revolving around lien sale issues. Self Storage Attorney Alta Walters and storage mastermind Tom Litton are presenting three seminars throughout California to fully educate owners and operators on all the new lien procedures and how your software should be changing with the new process. The workshops will be held on the following dates and times:

Sacramento – Doubletree Inn – Thursday, October 28th

Pleasanton – Four Points – Friday, October 29th

Irvine – Hilton – Tuesday, November 2nd

For more information on the lien sale seminars noted above: call (209) 334-3800.

I highly recommend these seminars to any owner or manager. I’ve attended several self storage lien law seminars and Alta and Tom cover the lien process more thoroughly than anyone in the industry.