Tag: SCRA

Florida’s New-Look Self-Storage Facility Act: Are You Ready?

In April 27, 2012, a bill amending Florida’s Self-Storage Facility Act (Act) was signed into law by Governor Rick Scott. The bill primarily implements changes to the notice requirements related to enforcing an owner’s lien against items stored in a self storage facility. According to the Self Storage Association, these changes could save Florida’s self storage industry more than $4 million annually.

Additionally, the bill provides that applications and rental agreements must include a provision disclosing whether an applicant is a member of the uniformed services. Consistent with the protection afforded some military personnel by the Servicemembers Civil Relief Act (SCRA), this new requirement is intended to help servicemembers avoid foreclosure of their stored property during a period of military service.

The bill, which becomes effective July 1, 2012:

  • Expands the definition of last known address to include the street address, post office box, or e-mail address provided by the tenant in a rental agreement or in a subsequent written change of address notice;
  • Deletes a provision which may have required a tenant to provide a new address to an owner by certified mail;
  • Removes the requirement that a tenant be notified of the owner’s claim by certified mail, and allows written notice of a pending sale of property to be delivered in person, by e-mail, or by first-class mail along with a certificate of mailing;
  • Provides that if the owner notifies the tenant by e-mail, a response, return receipt, or delivery confirmation from the tenant’s last known e-mail address is required for the notice to be effective; otherwise, the owner must send notice of the sale to the tenant’s last known address by first-class mail along with a certificate of mailing, before proceeding with the sale;
  • Deletes a requirement that a notice sent by mail must be “registered” in order for the notice to be presumed delivered when deposited with the U.S. Postal Service, thereby making any notice sent by mail, registered or not, is presumed delivered when deposited with the U.S. Postal Service;
  • Removes a reference to certified mail, thereby permitting an owner to notify the tenant or secured lienholders of any balance remaining from the proceeds of a sale of property by first-class mail along with a certificate of mailing; and
  • Requires contract rental agreements or applications for a rental agreement to contain a provision disclosing whether the applicant is a member of the uniformed services.

To take advantage of these revisions, owners and operators of self storage facilities should make every effort to obtain each tenant’s email address. Importantly, procedures should be implemented to ensure tenants’ email addresses are kept current. Those failing to do so will be unable to enjoy the benefits provided under the amended law.

Regardless of whether a self storage facility takes advantage of the new notice procedures, the new requirement for determining a tenant’s military status cannot be ignored. Far too many self storage facilities fail to determine whether a tenant is in the military service, and, consequently, they do not know whether the SCRA applies to any particular tenants.

Ignorance in this respect will inevitably result in violations of the SCRA, which can prove costly and embarrassing. Though some may find determining military status burdensome, in reality, this new requirement will benefit self storage facilities as much as their military tenants.

Oftentimes, there is a period of uncertainty following the enactment of a new law because many are unsure of precisely what is now required or permitted. Fortunately, the changes to the Act are fairly straightforward, so extensive confusion is not anticipated. Nevertheless, those who own or operate a self storage facility in Florida would be wise to seek advice if there are any doubts as to how the new law will affect their operation.

Setnor Byer Insurance & Risk’s Self-Storage Insurance Program and Risk Management Group work closely with self-storage facilities throughout Florida and nationwide to profile risks, compare coverage options, and match our clients with an insurance program that meets their needs.

If you have any questions about the amendments to Florida’s Self-Storage Facility Act, or if you would like discuss how our programs can help you, please contact us.

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.