Self-Storage Practice Pointer: Waivers Under the Servicemembers Civil Relief Act

Self-Storage Practice Pointer: Waivers Under the Servicemembers Civil Relief Act

When it comes to enforcing a storage lien against a delinquent servicemember-tenant, owners and operators of self-storage facilities must make sure they proceed in accordance with the Servicemembers Civil Relief Act (SCRA). The SCRA is a federal law designed “to provide for, strengthen, and expedite the national defense” by temporarily suspending various judicial and administrative proceedings that may adversely affect the civil rights of servicemembers during their military service.

Under the SCRA, “a person holding a lien on the property or effects of a servicemember may not, during any period of military service of the servicemember and for 90 days thereafter, foreclose or enforce any lien on such property or effects without a court order granted before foreclosure or enforcement.”

Simply stated, the SCRA requires a lawsuit and an order from the court before a lien can be enforced against a servicemember. Importantly, this requirement extends 90 days beyond the servicemember’s period of military service. Since this procedure is often different, and more complicated, than the procedure found in various state statutes, it is often beneficial for a self-storage facility to obtain a waiver of rights from servicemember-tenants.

It is important to understand that, although a servicemember may agree to waive the rights or protections afforded by the SCRA, there are strict legal requirements that must be followed for such a waiver of rights to be valid.

To be valid and enforceable against a servicemember, a waiver of rights that applies to the repossession, retention, foreclosure, sale, forfeiture, or taking possession of property that is security for any obligation, including self-storage liens, must meet the following requirements:

The waiver must be in writing.

The waiver must be executed as an instrument separate from the obligation or liability to which it applies. Since this requirement does not allow the waiver to be included within the lease or any other rental agreement, the waiver of rights should be made a separate, standalone document.

The waiver must be executed during or after the servicemember’s period of military service. Requiring a servicemember to add his or her serial number, or other military designation number, to the waiver may serve as preliminary confirmation that this requirement has been satisfied.

The written waiver must specify the legal instrument to which the waiver applies, such as the rental or lease agreement, and if the servicemember is not a party to that instrument, he or she must also be specified.

The written waiver must be in at least 12 point type.

Unless each and every legal requirement is satisfied, a waiver of rights under the SCRA will not be considered legally effective, and any self-storage facility seeking to enforce its lien against a servicemember-tenant will be required to proceed pursuant to the SCRA’s requirements. This is very important because violations of the SCRA may lead to imprisonment, injunctions, and liability for civil money penalties, monetary damages, costs, and attorneys’ fees;

Given the limitations imposed upon self-storage facilities by the SCRA, it is beneficial to obtain a waiver of rights from a servicemember-tenant. However, care must be taken to ensure that the waiver not only satisfies all of the SCRA’s requirements, but that the waiver is properly drafted to permit a self-storage facility to take prompt and appropriate action against a defaulting servicemember. Consequently, it is advisable to seek the assistance of experienced counsel.

If you would like more information about understanding and managing the risks faced by self-storage facilities, please contact us.