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  • California lien law clarifications

    It looks like we may be managing a site down in California soon, so I'm trying to help make sense of the lien laws down there. I think I have the basic idea, and will post what I think the timeline is. If anyone can confirm this, I would greatly appreciate it. Corrections are also fantastic.

    So, as I understand it, this is the timeline:

    Day 1 - Rent is due

    Day 12 - Late fee applied

    Day 15 (14 days w/out payment) - Preliminary lien notice, giving 14 days from the day the notice is sent or lose access to the unit. The law makes it sound as if there is still no legal overlock or restricting of gate hours at this point. Very different from Oregon.

    Day 29 (14 days after Preliminary lien notice) - Notice of Lien Sale. At this point, the facility may restrict gate access, cut the lock and inventory the contents and/or overlock the unit.

    Day 30-37 - Run first auction notice in the paper

    Day 38-45 - Run second auction notice in the paper

    Day 52 - Auction

    I've read the law several times and found a few posts here on the forums, but the laws seem pretty vague and the posts several years old. Thanks again to anyone who can offer advice or corrections!

  • #2
    The one thing I see that I hate is the being late but having to wait so long to lock out at the unit and gate.

    What city in Northern Ca. is it?

    Someone from Ca. is bound to chime in with info.
    "Never let the inmates run the asylum!"

    Comment


    • #3
      I am in NJ and from my memory, the CA lien laws are just plain wonky!

      Make sure you know when you can overlock them and when you can't
      and also look into when you can deny them access.
      I vaguely recall California rules are just plain stupid and they favor the tenant NOT the owners!
      Don't put off until tomorrow, what you can do today.

      Comment


      • #4
        I haven't been given a location yet. Yes, their laws are definitely wonky and open to abuse. The way it's written, a tenant could come in on day 27/28 and just cart their stuff away. Being unable to restrict gate access or overlocking the unit feels like operating with one hand tied behind your back.

        I had found an old post yesterday between MamaDuke and another person discussing this subject, and between that conversation (can't find it now) and the language in the law it definitely seems as if it is illegal to obstruct their access in any way until 14 days after the first lien notice which puts it around 29 days without payment. Yikes.

        Comment


        • #5
          For that reason alone I would not want to have a facility or run a facility in Ca. Too many ways for tenant abuse of what is owed and how to collect it. The law/statute is written to be all for the tenant and no consideration for the facility.
          "Never let the inmates run the asylum!"

          Comment


          • #6
            Ugh! California is a creature unto itself. Basically with CA Lien Laws, you want a really good contract drawn up, as that's your first line of defense. Second, make sure your attorney understands the Lien law section. There are lots of gray areas so you should err on the side of caution. If your rents are due on or before the 1st, with a 10 day grace period, that means late notices would print out on the 11th.

            As for the ads for auction, even those are fraught with many issues. Never place an ad like this; Mary Smith, unit B-12, contains collectible figurines, a full shotgun collection and brand new furnishings with tags still attached. You don't want to ever correlate the name and unit number with the contents specifically. In other words, mix them up so no one knows precisely what is in each unit from your ad.

            When you get the contract language down and your late fee schedule and approach an auction date you can PM me for help. Also, MamaDuke is awesome with CA Lien Laws

            And when you advertise be sure you have a week between when the ads print. If you print on Monday the first week, your second ad should be on Monday the next week or Tuesday, Wednesday etc.
            Gina 6k
            twitter.com/GinaSixKudo
            VM: Four-Oh-Eight- Seven-Eight-Oh-Eight-Oh-Seven-Nine
            [email protected]



            You only live once, but if you do it right, once is enough!
            I am not an attorney, just an experienced manager who is willing to share what I have learned. Your thoughts, practices or opinions may vary and neither of us may be right.

            Comment


            • #7
              We're in CA, this is what we follow:

              1st - Due
              11th - Late Fee $10 for rents under $60, $60-$99 $15, Rents $100+, $20 or 15%, whichever is greater (we also send a non required late notice)
              16th - Pre-Lien letter is mailed to customer and customer alt (we charge a fee)
              31st - Lien Letter & opposition form is mailed to customer and customer alt (we charge a fee)
              31+ days - Lock Cut & Photos
              1& 2 Weeks before Auction, Auction Ad placed with local newspaper
              66+ days past due - auction

              And of course no partial payments or you have to start all over, and continue to call, send SMS, and emails to the customer and always notate what happened.
              Thanks,

              -Ryan

              Comment


              • #8
                Day 1 - Rent is due

                Day 12 - Late fee applied Day 11

                Day 15 (14 days w/out payment) - Preliminary lien notice, giving 14 days from the day the notice is sent or lose access to the unit. The law makes it sound as if there is still no legal overlock or restricting of gate hours at this point. Very different from Oregon. We lock out gate access on day 6 and overlock on day 11. however, if they come in, they may have supervised access to the space. No vehicle in the property, only on foot. We are not DENYING access. We are RESTRICTING access, which is written into the contract. And there is a HUGE difference between the two! And of course, this restricted access is so rare, I've done it maybe 3 times in 10+ years in the industry.

                Day 29 (14 days after Preliminary lien notice) - Notice of Lien Sale. At this point, the facility may restrict gate access, cut the lock and inventory the contents and/or overlock the unit. The day after the lien letter is placed in the mail is the earliest you can cut the lock.

                Day 30-37 - Run first auction notice in the paper We never run the ad until the lien letter has expired. This is a point of contention and a gray area that we are not willing to lose in court, so we err on the side of caution.

                Day 38-45 - Run second auction notice in the paper

                Day 52 - Auction I would never sell before at least 2 full months of rent are past due.

                I've read the law several times and found a few posts here on the forums, but the laws seem pretty vague and the posts several years old. Thanks again to anyone who can offer advice or corrections!

                Our schedule is the following, and you'll notice we have a little extra time for the lien notice:

                Day 1 - Rent is due

                Day 6 - Gate lock out

                Day 11 - Late fee applied and Overlock placed

                Day 15 - Preliminary Lien Notice/fee

                Day 31 - Lien Notice/fee

                Day 45 - Lock cut/inventory

                Day 61 - Schedule auction/place ad

                Day 75+ - Auction

                I hope that helps!
                MamaDuke

                Comment


                • #9
                  Yes! Thank you, this is definitely what we were looking for. Evan, we just started reading up on the requirements for contacting the alternate people yesterday. I will definitely make it part of our timeline.

                  MamaDuke, I know we will be ordering new contracts because the ones this CA site uses are awful. I like the idea of restricted access during the lien process.

                  Thanks all for giving me more to present to the owners.

                  Comment


                  • #10
                    Definitely include in your contract that only accounts that are in good standing/current will be allowed full gate access. Limited access can be only driving in during office hours so you can keep an eye on them, Or, even only allowing them to walk onto the property with no vehicle access.
                    Gina 6k
                    twitter.com/GinaSixKudo
                    VM: Four-Oh-Eight- Seven-Eight-Oh-Eight-Oh-Seven-Nine
                    [email protected]



                    You only live once, but if you do it right, once is enough!
                    I am not an attorney, just an experienced manager who is willing to share what I have learned. Your thoughts, practices or opinions may vary and neither of us may be right.

                    Comment


                    • #11
                      MamaDuke Would you mind if I PM you our current draft of our collections page? I think I've got our timing right, but I'd like an experienced eye to see it before I present it to my manager.

                      Comment


                      • #12
                        Originally posted by Thomocracy View Post
                        MamaDuke Would you mind if I PM you our current draft of our collections page? I think I've got our timing right, but I'd like an experienced eye to see it before I present it to my manager.
                        Sure, no problem!
                        MamaDuke

                        Comment

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