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  1. #1
    ams's Avatar
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    Default HOUSE BILL 1265 and SENATE BILL 1293

    A new bill(s) introduced scheduled to take effect July 1 2011. I am sure there will be some changes by then.....they can never get it completely right on the first try

    http://www.capitol.tn.gov/Bills/107/Bill/SB1293.pdf

  2. #2
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    Default Re: HOUSE BILL 1265 and SENATE BILL 1293

    Right on the spot with this one, too, ams. Thanks for keeping us all abreast. I'm also working on a write-up for this one on ISS.com.
    John Carlisle
    Community Manager Emeritus
    Still a Big Fan of Self-Storage!
    www.chicagoprowriter.com

  3. #3
    ams's Avatar
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    Default Re: HOUSE BILL 1265 and SENATE BILL 1293

    One thing that is puzzling on the Tennessee statute is the addition of an oral agreement provision.

    (7) "Rental agreement" means any agreement or lease, written or oral, that establishes
    or modifies the terms, conditions, rules, or any other provisions concerning the use and
    occupancy of leased space at a self-service storage facility;

    I would be worried that would open facilities up for a customer claiming oral agreements about payment schedules and such.

  4. #4
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    Default Re: HOUSE BILL 1265 and SENATE BILL 1293

    I cannot believe all the potential problems with this bill. I sure hope it does not pass in its' current form. Wow, I am surprised.
    "Freedom of speech, does not mean freedom from being offended. The Constitution does not protect your feelings..."

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    Default Re: HOUSE BILL 1265 and SENATE BILL 1293

    Paging tnsd.
    John Carlisle
    Community Manager Emeritus
    Still a Big Fan of Self-Storage!
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  6. #6
    TNowner is offline Junior Member
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    Default Re: HOUSE BILL 1265 and SENATE BILL 1293

    To HURLCO: What do you see as the problems with the bill?

  7. #7
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    Default Re: HOUSE BILL 1265 and SENATE BILL 1293

    Quote Originally Posted by TNowner View Post
    To HURLCO: What do you see as the problems with the bill?
    Here are the problems as I see them. Just a few things to think about, they are:

    1. "Rental agreement" means any agreement or lease, written or oral,..." The use of the term "oral" is the death of contract construction. Any plaintiff will have a field day with this definition. Even if you include contract language that states that no oral promises are contained herein, etc., a suing plaintiff will use this definition against a self storage owner.

    2. "If the rental agreement contains a limit on the value of property stored in the occupant’s storage space, the limit shall be deemed to be the maximum value of the property stored in that space." I do not believe that a Tennessee court will ever uphold this language. Tennessee courts for example, have held that such clauses may be void as against public policy where the landlord had greater bargaining power so that the tenant must accept the lease as written, or where the tenant was unaware of or did not fully understand the clause's effect, or where the clause was overly broad or was unconscionable. In fairness, Tennessee has also protected the contracting parties power to contract freely, but with some limitations. The reality is exactly what Jughead said in his response to the Nevada statutes, some owners will attempt to lower their stated limit of liability maximums and the court will assuredly find this unconscionable. See Crawford v. Buckner, 839 SW 2d 754 - Tenn: Supreme Court 1992

    3. The proposed late fee is clearly excessive given the rental rates in Tennessee. $40 or 20% of monthly rent is well in excess of the actual loss experienced as a result of non-payment and appears to serve as a penalty, which is not allowed under civil law.

    4. "(B) Upon the failure of a occupant to pay the rent for the storage..." Shouldn't this provision also say "rent, fees and other charges, incurred pursuant to the rental agreement?" Five days and the tenant is denied access without notification? What is the tenant needs access to access the tools of his/her trade, inventory, clothing? This seems excessive to me, a storage manager, I can only guess what a legislator would think.

    5. Section 66-31-105 "a statement of the approximate additional expenses which may be incurred between the date of the notice and the date of the sale;" Approximate additional expenses? Lien notices should state exactly what the tenant owes so that they can satisfy the lien and avoid foreclosure. I think it would be better to state that the tenant will be subject to additional fees and other charges as documented by owner. How would any software vendor accommodate the projection of expenses rather than stated expenses?

    6. "The manner of advertisement is deemed commercially reasonable if not less than three (3) potential bidders attend the sale at the time and place advertised." I like the potential bidders language, but three? Most people in Tennessee have more than three cousins within three miles of a facility. I am not sure that this language would ever withstand scrutiny. Commercially reasonableness is determined by conduct, not attendance, especially if attendance is low.

    7. "(L) If the property upon which the lien is claimed is a vehicle and rent and other charges related to the property remain unpaid or unsatisfied for sixty (60) days after the maturity of the obligation to pay rent, the facility owner may utilize either of the following options:" The use of the term "maturity" only confuses this language. It might be better to simply delete "after the maturity of the obligation to pay rent"

    8. Paragraph (N) releases the owner from liability for identity theft, etc. Paragraph (ii) then implies that the owner would not have liability if the owner had no "actual knowledge." Once the door to the unit is opened to sell pursuant to these statutes, we could potentially see papers, photographs, computers with hard drives, bank statements, etc., since the owner now has actual knowledge, does the owner now have liability? Perhaps this language needs to be reworked. One option would be to require the tenant to box and label all such media and documents and clearly mark them. If the media and documents are clearly marked and identified, then the facility owner shall not sell but rather dispose of the identified property without liability.

    9. (2) The rental agreement shall contain a provision directing the occupant to disclose to the owner any lienholder with an interest in property that is or may be stored in the self-service storage facility. It seems incongruent to ask the tenant to disclose any known lienholders or other parties of interest yet no requirement to notify these parties? I am not sure why one would ask for this information and then not use it.

    10. I noticed that the advertisement provision was deleted. I do not think this is a good idea, yet many State associations are attempting to eliminate this requirement. I predict that owners will not attempt to announce or advertise the auctions in any other forums that are better than the old, tried and true newspaper ads. I think this is a bad trend and idea. I for one would be afraid to use self storage if this type of wrangling continues. It just seems like we are eroding protections for the tenants for the sake of expediency and cost reduction.

    I know that owners want legislation that works, but legislative changes come with a very high price. The more we attempt to change our laws, the more leglslators see us as targets, not only for regulation, but taxation as well. What is the best way to avoid regulation? Sit quietly and mind your own business. Remember, everything is discoverable nowadays, even forums like this. Be very careful, you may just get what you are asking for...

    As Forrest Gump would say: "That's all I got to say about that..."
    "Freedom of speech, does not mean freedom from being offended. The Constitution does not protect your feelings..."

  8. #8
    ams's Avatar
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    Default Re: HOUSE BILL 1265 and SENATE BILL 1293

    From the article,

    Cole said the impetus for pushing for advertising and notification changes came from survey results. Between Dec. 15 and Jan. 15, the TNSSA asked its members to poll customers on a wide range of issues. Among the 350 customer respondents:

    80 percent said they do not subscribe to a local newspaper.
    83 percent said they do not read the legal notices in a newspaper.
    80 percent said they had regular e-mail and Internet access.
    When given four choices for preferred methods of receiving notifications if they default on their rent, 53 percent of respondents chose e-mail, and only 2 percent chose via a publication.
    ----

    What percentage of facilities are in rural areas, not just facilities in the association? Tennessee is a lot more rural than urban. If the majority of the respondents are in a urban area then those results are way off base and should be not used.

 

 
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