Dealing with delinquent tenants is an unavoidable part of operating a self storage facility. Strict legal requirements make enforcing storage liens and selling tenants’ property a risky proposition. The risk is even greater for those facilities that permit the storage of motor vehicles.

Unlike other kinds of personal property, certificates of title are used to establish ownership of motor vehicles. This means that operators of self storage facilities must take the right steps to make sure the certificate of title will reflect the transfer of ownership from the delinquent tenant to the buyer. Unfortunately, re-titling a vehicle may not be quick or easy, particularly because the process isn’t always obvious and it can vary significantly from state to state.

For example, Florida requires an Application for Certificate of Title with/without Registration, though this requirement is not found in the self storage statute. By contrast, California requires an Application for Lien Sale Authorization and Lienholder’s Certification, a Certification of Lien Sale, an Application for Title or Registration, a Notice of Pending Lien Sale, a DMV letter of authorization to conduct the sale, postal receipts of all notices sent, and a Notice of Transfer and Release of Liability.

The lack of a uniform process for re-titling motor vehicles means that operators of self storage facilities must refer to and abide by their state-specific laws and requirements. However, regardless of what the process involves, operators can still take steps to make things easier while reducing the risk. For example, operators can collect vehicle-specific information and documentation when the tenant signs the lease, such as:

  • Vehicle Identification Number (VIN)
  • Vehicle registration information
  • Copy of Certificate of Title
  • License plate/tag number
  • Lien and lienholder information
  • Name and contact information for all owners of the vehicle

Operators of self storage facilities need to understand the increased effort and risk that come from storing and disposing of motor vehicles. Various insurance options specifically designed for the self storage industry are available, such as Sale and Disposal Liability Coverage.

If you would like more information about Setnor Byer Insurance & Risk’s Self Storage Insurance Program can help protect your facility, please contact us.

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