Bill Text: MI HB4484 | 2013-2014 | 97th Legislature | Engrossed

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Liens; other; self-service storage facility liens; revise liability of storage facility, allow for late fees, and allow for additional means of disposing of certain property. Amends secs. 3 & 5 of 1985 PA 148 (MCL 570.523 & 570.525).

Spectrum: Partisan Bill (Republican 2-0)

Status: (Passed) 2014-03-27 - Assigned Pa 61'14 With Immediate Effect [HB4484 Detail]

Download: Michigan-2013-HB4484-Engrossed.html

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HB-4484, As Passed House, November 7, 2013

 

 

 

 

 

 

 

 

 

 

 

SUBSTITUTE FOR

 

HOUSE BILL NO. 4484

 

 

 

 

 

 

 

 

 

 

 

 

     A bill to amend 1985 PA 148, entitled

 

"Self-service storage facility act,"

 

by amending sections 3 and 5 (MCL 570.523 and 570.525), as amended

 

by 2009 PA 177.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 3. (1) The owner of a self-service storage facility or a

 

self-contained storage unit and the heirs, personal

 

representatives, successors, and assignees of the owner have a lien

 

upon all personal property, whether or not owned by the tenant,

 

located at the self-service storage facility or self-contained

 

storage unit for rent or other lawful charges incurred relative to

 

the storage of the personal property, including expenses necessary

 

for its preservation, or reasonably incurred in its sale pursuant

 

to this act. The lien attaches on the date the personal property

 

arrives at the self-service storage facility or self-contained

 

storage unit or the date a rental agreement for the storage space

 

is signed by the tenant, whichever is earlier.

 

     (2) The priority of a lien under this act is as provided in

 

section 5(13).5(14).

 

     (3) If a tenant defaults on a rental agreement, the owner

 

shall give notice to all holders of a perfected security interest

 

under the uniform commercial code, 1962 PA 174, MCL 440.1101 to

 

440.11102, in which the tenant is named as a debtor.

 

     (4) At the commencement of a rental agreement for storage

 

space at a self-service storage facility or in a self-contained

 

storage unit, the owner shall provide the tenant with the following

 

written notice:

 

     "NOTICE: If you fail to make your required payments, you will

 

have to vacate the unit or your property may later be sold at a

 

public sale. Before the sale, you will be notified by first-class

 

mail or by electronic mail of the amount due. The notice will be

 

mailed to your last known address. In order to preserve your right

 

to be notified, it is important that you notify us in writing of

 

any change in your mailing address. Also, you should supply us with

 

the name and address of another person who can reach you if you are

 

not at your mailing address, and we will notify that person at the

 

same time and in the same manner as we notify you.".

 

     (5) A rental agreement under this section may provide for a

 

limit on the value of the property stored at the facility or unit.

 

The stated limit shall be considered the maximum value of the

 

stored property for all purposes.

 

     (6) A rental agreement under this section may provide for a

 

reasonable late charge for failure of the tenant to timely make

 

payments for the storage space when due. A monthly late fee of

 

$20.00 or 20% of the monthly rental amount, whichever is greater,

 

shall be considered reasonable and is not a penalty. The owner of

 

the self-service storage facility or self-contained storage unit

 

has the burden of justifying the reasonableness of any higher late

 

fee.

 

     Sec. 5. (1) An owner's lien under section 3 shall be enforced

 

only as provided in this section.

 

     (2) The tenant and any occupant designated by the tenant in

 

under section 4(2) shall be notified of the owner's intent to

 

enforce the owner's lien by written notice delivered in person, by

 

first-class mail, or by electronic mail to the tenant's and, if

 

applicable, occupant's last known address. The notice shall include

 

all of the following:

 

     (a) An itemized statement of the owner's claim, showing the

 

amount due at the time of the notice and the date when the amount

 

became due.

 

     (b) A demand for payment within a specified time not less than

 

14 days after delivery of the notice.

 

     (c) A conspicuous statement that, unless the claim is paid

 

within the time stated in the notice, the personal property will be

 

advertised for sale or other disposition and will be sold or

 

otherwise disposed of at a specified time and place as provided in

 

subsection (5).

 

     (d) The name, street address, and telephone number of the

 

owner whom the tenant may contact to respond to the notice.

 

     (e) A statement that if the tenant is a service member and is

 

transferred or deployed overseas on active duty for a period of 180

 

days or more, the tenant is entitled to give the owner notice of

 

that transfer or deployment and is entitled to protections under

 

this act or other law.

 

     (3) A notice given pursuant to under this section shall be is

 

presumed delivered when it is deposited with the United States

 

postal service and properly addressed with postage prepaid or when

 

it is transmitted by electronic mail to the tenant's last known

 

electronic mail address. An owner who gives notice under subsection

 

(2) shall make an affidavit stating how and when the notice was

 

delivered to the tenant and shall attach a copy of the notice to

 

the affidavit. The owner shall retain the affidavit for

 

introduction into evidence in any potential action under section

 

6(1).

 

     (4) Subject to subsection (15), (16), after the expiration of

 

the time given in the notice described in subsection (2), the

 

contents of the storage space may be moved to another storage space

 

pending its sale or other disposition under this act.

 

     (5) After the expiration of the time given in the notice

 

described in subsection (2), except as provided in subsection (6),

 

an advertisement of the sale or other disposition shall be

 

published once a week for 2 consecutive weeks in the print or

 

electronic version of a newspaper of general circulation in the

 

area where the self-service storage facility or self-contained

 

storage unit is located or posted once per week for 2 consecutive

 

weeks on a publicly available website identified in the rental

 

agreement. Regardless of whether a sale involves the property of

 

more than 1 tenant, a single advertisement may be used to advertise

 

the disposal of property at the sale. An advertisement under this

 

section shall include all of the following:

 

     (a) A brief, general inventory, as described in subsection

 

(7), of the personal property subject to the lien that is to be

 

sold.

 

     (b) The address of the self-storage facility or the address

 

where the self-contained storage unit is located and the name of

 

the tenant.

 

     (c) The time, place, and manner of the sale or other

 

disposition. Subject to subsection (15), (16), the sale or other

 

disposition shall not take place sooner than 15 days after the

 

first publication of the advertisement under this section.

 

     (6) If there is no newspaper of general circulation in the

 

area where the self-service storage facility or self-contained

 

storage unit is located and a publicly available website is not

 

identified in the rental agreement, the advertisement shall be

 

posted not less than 10 days before the date of the sale or other

 

disposition in not less than 3 conspicuous places in the

 

neighborhood where the self-service storage facility or self-

 

contained storage unit is located.

 

     (7) The inventory required under subsection (5) shall

 

reasonably identify the property. A container, including, but not

 

limited to, a trunk, valise, or box that is locked, fastened,

 

sealed, or tied in a manner that deters immediate access to its

 

contents may be described as being in that condition, and a

 

description of the container's contents is not required. However, a

 

container closed in such a manner may be opened and its contents

 

inventoried, and those conducting the inventory, the owner, and the

 

owner's employees, agents, and representatives are not liable for

 

incidental damage to the container caused by the inventory.

 

     (8) A sale or other disposition of personal property under

 

this section shall conform to the terms of the notification as

 

provided in this section and shall be conducted in a commercially

 

reasonable manner.

 

     (9) Before a sale or other disposition of personal property

 

under this section, the tenant may pay the amount necessary to

 

satisfy the lien and the reasonable expenses incurred under this

 

section to redeem the personal property. Upon receipt of the

 

redemption amount, the owner shall return the personal property to

 

the tenant. After returning the personal property to the tenant

 

under this subsection, the owner is not liable to any person

 

concerning that personal property. If the tenant fails to redeem

 

the personal property or satisfy the lien, including reasonable

 

expenses under this section, the tenant shall be considered to have

 

unjustifiably abandoned the personal property and the owner may

 

resume possession of the self-service storage facility or self-

 

contained storage unit.

 

     (10) If any property to which a lien attaches under section 3

 

is a motor vehicle, aircraft, mobile home, moped, motorcycle,

 

snowmobile, trailer, or watercraft and the rent and other storage

 

charges remain unpaid or unsatisfied for 60 days, the owner may, in

 

lieu of a sale of the property, have the property towed from the

 

facility by an independent motor carrier with a proper certificate

 

of authority from the Michigan public service commission under the

 

motor carrier act, 1933 PA 254, MCL 475.1 to 479.43. An owner who

 

has property towed under this subsection is not liable or

 

responsible for the property after the transfer of possession of

 

the property to the motor carrier.

 

     (11) (10) Before the sale of a motor vehicle, aircraft, mobile

 

home, moped, motorcycle, snowmobile, trailer, or watercraft, the

 

owner shall contact the secretary of state and any other

 

governmental agency as reasonably necessary to determine the name

 

and address of the title holders or lienholders of the item, and

 

the owner shall notify every identified title holder or lienholder

 

of the time and place of the proposed sale. The owner is liable for

 

notifying the holder of a security interest only if the security

 

interest is filed under the name of the person signing the rental

 

agreement, the tenant, or an occupant identified in section 4(2).

 

An owner who fails to make the lien searches required by this

 

section is liable only to valid lienholders injured by that failure

 

as provided in section 6.

 

     (12) (11) Before the sale of personal property under this act,

 

a holder of a prior lien on a motor vehicle, aircraft, mobile home,

 

moped, motorcycle, snowmobile, trailer, or watercraft to be sold

 

may pay the owner the amount of the owner's lien attributable to

 

storage of the property, including the reasonable expenses incurred

 

by the owner under this section. The amount payable to the owner

 

shall not exceed the equivalent of 4 months' rent. A payment made

 

to the owner shall be added to the amount of the lien of the prior

 

lienholder who made the payment and shall be subtracted from the

 

amount of the owner's lien.

 

     (13) (12) A purchaser in good faith of the personal property

 

sold under this section takes the property free of any right of a

 

person against whom the lien was valid, despite noncompliance by

 

the owner with the requirements of this section.

 

     (14) (13) A person conducting a sale under this section shall

 

distribute the proceeds in the following sequence:

 

     (a) First, to satisfy the owner's liens up to an amount

 

equivalent to 4 months' rent, minus any amount already paid the

 

owner pursuant to subsection (11).(12).

 

     (b) Second, to satisfy outstanding balances owed to prior

 

perfected lienholders.

 

     (c) Third, to satisfy the balance of the owner's liens,

 

including, but not limited to, all unpaid rent, late fees, and

 

reasonable lien enforcement expenses.

 

     (15) (14) Any proceeds of a sale under this section remaining

 

after the distribution is made under subsection (13) (14) shall be

 

returned to the tenant by mailing the proceeds to the tenant's last

 

known address by certified mail and by notifying the tenant by

 

first-class mail. If the tenant does not claim the remaining

 

proceeds within 2 years after the date of sale, the remaining

 

proceeds shall escheat to this state. The owner shall maintain

 

proper records of money received in any sale held under this

 

section, and the records are subject to audit by the department of

 

treasury.

 

     (16) (15) If an owner receives a notice with supporting

 

evidence under section 4(3) from a tenant, the owner shall not

 

enforce an owner's lien until 90 days after the end of the tenant's

 

overseas service.

 

     (17) An owner is not liable for any damages or claims related

 

to the release, use, or misuse of confidential, proprietary, or

 

personal identification information contained in any documents or

 

other media stored by a tenant in the facility or unit after the

 

sale or other disposition of the documents or media.

 

     (18) If an owner reasonably believes that a storage space

 

contains any documents or other media containing confidential,

 

proprietary, or personal identification information, the owner is

 

authorized to destroy any or all of the documents or media in lieu

 

of a sale under this section. An owner who destroys documents or

 

media under this subsection is not liable to any person for the

 

destruction.

 

     (19) If an owner has actual knowledge of, and the storage

 

space contains, any property that the owner may not lawfully sell,

 

the owner is authorized to properly dispose of the property in any

 

manner allowed by applicable law in lieu of a sale under this

 

section. An owner who disposes of property under this subsection is

 

not liable to any person for the disposal.

 

     Enacting section 1. This amendatory act takes effect upon the

 

expiration of 90 days after the date it is enacted into law.