14 Nov 2024
As all self-storage operators know, there are currently 49 states with statutes governing what happens to a tenant’s stored property when they don’t pay their rent. Other than Alaska, which permits a contractual rather than a statutory lien, every state permits a self-storage operator to enforce a self-help remedy of their lien over their tenant’s goods if there is a “monetary” default (a failure to pay rent). Ultimately, the operator has the right to sell their tenant’s goods and apply the proceeds of the sale to the unpaid rent obligation.
However, if a facility is dealing with a tenant who commits a “non-monetary” default (meaning a tenant who would pay but their behavior at the facility is disruptive, such as sleeping in their unit, loitering, using the space for criminal or illegal activity, or threatening employees or other tenants), these previously mentioned statutes have, to date, failed to provide a remedy for operators to remove the difficult tenant, short of a court-ordered eviction or an order for unlawful detainer.
Fortunately, the SSA and state associations have joined forces to create a solution to address the issue of tenant removal for non-monetary defaults. For example, both Georgia and Utah recently passed laws giving self-storage operators the right to dispose of a tenant’s stored goods without court involvement if the tenant’s lease has been terminated and the tenant has refused to vacate the premises. These “non-monetary” default provisions allow operators to remove troublesome tenants from their facilities, thereby ensuring the safety of the facility’s employees and other tenants. Other non-monetary default laws have also been passed in Idaho, Kansas, and California.
And while the Georgia and Utah laws are similar, they do have their unique differences. The Georgia law provides as follows:
“An occupant shall not use a self-service storage facility after the owner has delivered written notice by hand delivery or verified mail of the termination or nonrenewal of the occupant's rental agreement. Such notice shall provide the occupant with not less than 14 days after delivery of such notice to remove all personal property from the self-service storage facility.
Prior to the occupant's removal of all personal property from a self-service storage facility [pursuant to this Code section], the owner may place reasonable restrictions on the occupant's use of the self-service storage facility, including denying access to the self-service storage facility except for the occupant to remove personal property during the owner's normal business hours. The owner may dispose of any personal property remaining at the self-service storage facility after the date provided in the written notice [pursuant to this Code section]."
The Utah law reads as follows:
The owner may sell, donate, or dispose of any property remaining at the self-service storage facility at the end of a rental agreement without liability if:
(a) the owner has provided written notice to the occupant by first-class mail to the occupant's last known address or by email to the occupant's last known email address;
(b) the written notice states that the owner will sell, donate, or dispose of the property following a specified date at least 15 days after the date of the notice, unless the occupant removes the property before the specified date; and
(c) any proceeds remaining after the owner deducts rent, labor or other charges, and expenses reasonably incurred in the sale or disposal of the personal property are delivered to the Utah state treasurer as unclaimed property.
Ultimately, it would be wonderful for all states to provide similar statutory revisions as a remedy for self-storage operators dealing with their tenants’ non-monetary defaults. In the interim, operators without these statutory updates will need to continue seeking voluntary removals or court enforced evictions to resolve these non-monetary default situations.
This article was originally published by Modern Storage Media and written by Scott Zucker, October 18th, 2024.
Scott Zucker is a founding partner in the Atlanta law firm of Weissmann Zucker Euster Morochnik &Garber P.C. and has been practicing law since 1987. Scott represents self-storage owners and managers throughout the country on legal matters including property development, facility construction, lease preparation, employment policies and tenant claims defense. He also provides, on a consulting basis, advice to self-storage companies in the areas of foreclosure and lien sales, premises liability and loss control safeguards. Scott can be reached at 404-364-4626 or by e-mail at Scott@wzlegal.com
