HOUSE BILL REPORT

SSB 5595

As Amended by the House

BYSenate Committee on Economic Development & Labor (originally sponsored by Senator Kreidler)

Establishing liens for owners of self-storage facilities.

House Committe on Judiciary

Majority Report:  Do pass with amendments.  (15)

      Signed by Representatives Armstrong, Chair; Crane, Vice Chair; Belcher, Brough, Hargrove, Lewis, Locke, Meyers, Moyer, Padden, Patrick, Schmidt, Scott, Wang and Wineberry.

House Staff:Harry Reinert (786-7110)

AS PASSED HOUSE MARCH 1, 1988

BACKGROUND:

Operators of self-serve storage facilities do not have any special statutory remedies to enforce provisions of their contracts.  In order to obtain past due payments for rent an operator of a self-serve storage facility must either obtain a judgment from a court for the amount of rent due and enforce the judgment in the manner provided for by statute or make provision in the contract of rent or lease for the ability to sell personal property if the individual fails to pay rent when due.  Under either of these provisions, any person who has a perfected security interest or lien on the personal property would have a superior claim to the personal property.

SUMMARY:

The Washington Self-Service Storage Act is enacted.  The act creates a lien on all personal property stored in a self-service storage facility.  The lien is for rent, labor, or other charges for services incurred pursuant to the rental agreement or for disposition of the property. The lien on any motor vehicle or boat which is perfected prior to the self- service storage lien has priority to the storage lien.  A contract for use of a self-service storage facility must be in writing, contain notice of the potential for a lien on property stored in the facility, and require the renter to identify any person having a security interest in or lien on property stored at the facility.

An operator of a self-service storage facility may deny access to the facility to any person who is six days past due in any part of rent or other charges.  After rent or other charges are fourteen days past due, the operator of the facility may terminate the right of the renter to use the facility.  The operator must send a notice of termination to the person at his or her last known address and to an alternative address supplied by the person.  The notice must include an itemized statement of the amounts due, the date when the person's right to use the facility will terminate unless past due amounts are paid, notice that the person may be denied access to the facility after the termination date and that the owner may impose a lien, and the name, address, and telephone number of the operator.  A form of notice is set forth.

If the amounts due are not paid by the termination date, the owner may enter the storage area and remove any property located there.  The owner must then send to the person and to the alternative address, by certified mail, a notice of lien sale.  The notice of lien sale must include, in addition to identifying information, the date when the property may be sold to satisfy the lien.  The person may file a declaration opposing the lien sale at any time before the stated date of the sale.

If a declaration is not received prior to the lien sale, the owner may dispose of the property in a commercially reasonable manner, if it is worth less than one hundred dollars, or sell the property at a lien sale.

In order to sell property at a lien sale, the owner must advertise the sale once a week for two weeks prior to the sale.  The owner must provide an accounting to the occupant of the disposition of the proceeds.  The person, or any other person having a claim on the property, may claim any excess proceeds for up to one year after the sale.  If no declaration in opposition to the sale is filed, a person with a perfected security interest under the Uniform Commercial Code may claim the property by paying to the owner the amount due on the rental agreement.  A person having a claim on the property may pay to the owner of the facility the amount due and claim the property prior to the sale.  The occupant may redeem property sold at a lien sale by tendering to the purchaser the price paid for the property.

If the person owing amounts on the rental agreement files a declaration against the lien sale, the owner may initiate a court action to enforce the lien.  The owner must serve the complaint in the manner provided by court rules.  If the person fails to respond with the ten day period, the owner may move for a default judgment.  The owner may enforce the judgment by sale of the property not earlier than ten days after entry of a judgment in the operator's favor.

The person storing property at the facility must provide any insurance.

Proceeds of a lien sale and personal papers and effects not claimed within one year of the lien sale are deemed to be abandoned property and must be turned over to the state.

The act applies only to rental agreements entered into on or after the effective date.  Rental agreements providing for monthly payments with no termination date are covered beginning with the date of the first monthly payment due after the effective date of the act.

Fiscal Note:      Not Requested.

House Committee ‑ Testified For:    Doug Bohlke, Self Service Storage Association; Don Daniels, Shurgard Self Storage; Robert Beckes, Safegard Self Storage; Dick Barrett, Realtors Association and May Warehouse (in part).

House Committee - Testified Against:      None Presented.

House Committee - Testimony For:    There are currently no statutory provisions governing self-service storage facilities.  Owners of these facilities need an improved procedure to recover past due rent.

House Committee - Testimony Against:      None Presented.