Summer 2024 Legal Update

As everyone in the industry knows, self-storage is regulated by state laws, so what is required in one state may not be required in a neighboring state. However, there are still similarities between state laws, and every few years we see nationwide trends in proposed changes to state self-storage laws.
Some years back, many states proposed, and eventually passed, laws that allowed operators to send lien notices to tenants by first class mail instead of certified mail and eventually that became the standard in most every state. Soon thereafter, state laws began to change again, allowing operators send lien notices to tenants by e-mail and, over time, that has become an accepted practice in most states.
National and state self-storage associations also began pushing state legislatures to adopt laws allowing operators to place a limit on the value of the property stored in the tenant’s storage space, thereby limiting the operator’s liability. This change has been wildly successful and is now a cornerstone of any rental agreement.

Another widespread change occurred as a result of the issues operators were having selling off stored vehicles of defaulting tenants. The various self-storage associations were successful in getting state legislatures to pass new laws permitting operators to have the vehicles towed instead of selling them (although this law has taken a little longer to take hold and is still an ongoing battle).
Over the last few years, there has been a flurry of activity at the legislative level with regards to self-storage. A number of states have passed laws allowing operators to advertise lien sales online instead of requiring the advertisement to be placed in a local newspaper. This has been a noteworthy development for operators due to the significantly increasing costs of placing advertisements in local newspapers. This shift in the advertising method will allow operators to avoid those costs that have generally proven difficult to recover through the lien process.

The push to modernize the state self-storage laws has not stopped and a new wave of updates is taking hold. This most recent wave of proposed and enacted changes has revolved around non-monetary default and unsigned agreements. California, Georgia, Idaho, Kansas and Utah have all enacted new laws this year that entitle operators to terminate a tenant’s rental agreement and then dispose of the tenant’s property if the tenant does not vacate the space after a certain amount of time. Each of these states requires the operator to send notice to the tenant, which notice generally includes a specific demand time in order for the tenant to vacate the space. If the tenant does not vacate the space by the demand time in the notice, then the operator may dispose of the property. This is a significant development in the self-storage industry. Normally, if a tenant fails to vacate after receiving a termination notice, the operator must file an eviction action with the local court and go through the court eviction process in order to remove the tenant. As many operators know, that is often an expensive and time-consuming process that can prevent the space from being re-rented for months. These new laws will allow operators in those states to remove troublesome tenants and free up storage spaces much quicker and at a fraction of the cost.

Georgia, Idaho, Kansas, Utah and Virginia have also recently passed laws which allow unsigned rental agreements to be enforced. These new laws generally require specific language to be in the rental agreement and the new rental agreement has to be sent to the tenant. If the requirements in the statute are met, the rental agreement and its terms can be enforced simply by the act of the tenant continuing to rent the space. The new rental agreement does not have to be signed. This update will allow operators to change the terms of their rental agreements without the worry of getting each tenant to sign a new rental agreement before it becomes enforceable.

The state and national self-storage associations have done a remarkable job at lobbying to modernize the state self-storage laws. The most recent updates are reminders to operators to keep up with their state laws so that they are aware of any possible changes. In conjunction with that, it is also a reminder that operators need to ensure that their rental agreements are up to date in order to comply with, and take advantage of, any new state self-storage laws (or any new self-storage best practice updates that may be available).

Ashley Oblinger is a Senior Attorney in the law firm of Weissmann Zucker Euster + Katz P.C. in Atlanta, Georgia. Ashley specializes in business law and self-storage law, advising self-storage facilities throughout the country on all legal matters, including lease preparation, lien enforcement, tenant issues, tenant claims defense, and employment policies. Ashley can be reached at 404-760-7434 or at Ashley@wzlegal.com.