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  • Nevada SB150

    There are some changes in the works for Nevada. It has just been introduced so it has a little ways to go.
    See the bill text at

    http://www.leg.state.nv.us/Session/7...s/SB/SB150.pdf
    --
    Ron

    http://n6ach.com
    http://laws.n6ach.com
    [email protected]

  • #2
    Re: Nevada SB150

    Thanks for posting, ams. I'm actually working on an InsideSelfStorage.com write-up for this right now.

    I know you're not in Nevada, but what is your reaction to the proposed change?
    John Carlisle
    Community Manager Emeritus
    Still a Big Fan of Self-Storage!
    www.chicagoprowriter.com

    Comment


    • #3
      Re: Nevada SB150

      I have only kind of glanced at it, I will have to get deeper into it as it gets closer to passing as I will probably be the one going to our Nevada facilities set them up.


      I like the removal of the opposition to lien element from the lien process. I am not sure about the change of address procedure allowing email, I can see where it might be misused, especially if you do not have a valid email address from the tenant on the lease.

      The other question I have is why they removed the advertisement requirements from the lien sale, and added the 5 or more bidders comment. There should be some sort of advertising or other sale instructions.

      Having the procedures spelled out for dealing with a person using the facility as a residence is awesome. No question on what the steps are. They did good with that.

      I also like the vehicle and vessel addition:

      (d) If the personal property upon which the lien is claimed is a
      2 motor vehicle, boat or personal watercraft, and rent and other
      3 charges related to such property remain unpaid or unsatisfied for
      4 60 days, have the property towed by any tow car operator subject
      5 to the jurisdiction of the Nevada Transportation Authority. If a
      6 motor vehicle, boat or personal watercraft is towed pursuant to
      7 this paragraph, the owner is not liable for any damages to such
      8 property once the tow car operator takes possession of the motor
      9 vehicle, boat or personal watercraft.
      --
      Ron

      http://n6ach.com
      http://laws.n6ach.com
      [email protected]

      Comment


      • #4
        Re: Nevada SB150

        I relies it’s a NV law, however, what happens in one state usually filters down to the other states. It’s just a matter of when. I didn’t read the whole bill in detail. Most looked like it would help the facilities. There was some language I would welcome in our statutes. Section 3 Protected Property would give me some concern. I assume you will have to go through each and every box, suitcase and bag just to meet the requirements.

        Comment


        • #5
          Re: Nevada SB150

          Please take the time to read this crazy legislative change. The owner is guilty of a misdemeanor if the temperature drops below their predesignated temperature range? Who in the world introduced this piece of work? 24 hour notice for homeless renters? It seems like this bill is providing a bunch of complicated solutions in search of non-existent problems. Yawza......
          "Freedom of speech, does not mean freedom from being offended. The Constitution does not protect your feelings..."

          Comment


          • #6
            Re: Nevada SB150

            Originally posted by hurlco View Post
            Please take the time to read this crazy legislative change. The owner is guilty of a misdemeanor if the temperature drops below their predesignated temperature range? Who in the world introduced this piece of work? 24 hour notice for homeless renters? It seems like this bill is providing a bunch of complicated solutions in search of non-existent problems. Yawza......
            It is ok on the climate control because it is the owner that is guilty not the manager

            On a serious note, I guess you would have to have a lot of emergency power incase the utilility company fails.

            The people using the facility as a residence, it looks like it is for the facility with 24 hr access. Other facilities can have someone removed if they are on site after hours because the person is trespassing. If not this is very dangerous as it is requiring facilities to become hotels for the 48 hours it will take to evict.
            --
            Ron

            http://n6ach.com
            http://laws.n6ach.com
            [email protected]

            Comment


            • #7
              Re: Nevada SB150

              For those wishing to express concerns, please contact the Nevada Self Storage Association at http://www.nv-ssa.org/

              Another issue, is changing the text to read we have a "possessory lien" instead of just lien. We have always had a possessory lien but by changing the name, we lose our lien if we lose possession. At this time, even if we lose the possession by any means, we can still try to recover what is owed through other means.
              --
              Ron

              http://n6ach.com
              http://laws.n6ach.com
              [email protected]

              Comment


              • #8
                Re: Nevada SB150

                Received a reply from the Nevada Storage Association. They explained some of the laws were already on the books prior to their creation.

                I am waiting for permission to re-post their answers, as soon as I get it they will be up.
                --
                Ron

                http://n6ach.com
                http://laws.n6ach.com
                [email protected]

                Comment


                • #9
                  Re: Nevada SB150

                  Hi Ron:
                  I received your email that you sent to the NVSSA expressing your questions regarding our proposed changes to the NRS. I’ll address your concerns one at a time:


                  Hello, I was looking over the text for S.B. 150 with our Nevada facilities and we had some concerns.


                  Changing the text to "Possessory" lien can cause problem collecting any debt when we lose possession of the good stored for any reason. We have always had a possessory lien but if we lost possession of the goods we have had other avenues in which to collect the debt. By changing the name of our lien, we forfeit the lien amount if we do not have possession.


                  The debt exists whether or not there even is a lien, regardless of what kind of lien it is. If there was never a lien statute and a tenant defaulted in the payment of rent, the debt would still exist, and the right to seek remedies to collect it would nevertheless exist.

                  The lien process is nothing more than one remedy available to us to try to collect the debt. If you lose possession of the contents of the unit, you would lose the use of that remedy. (You can't sell what you don't have.) The debt nevertheless still exists, and any other remedies available to you (lawsuit, collection agencies, etc.) are still be available.

                  The term possessory here only describes how the line arises. Most other jurisdictions term the storage lien as possessory.



                  The section on using the facility as a residence is very troubling as it
                  gives the tenant up to 48 hours to use the facility as a residence prior
                  to be evicted and if they leave the facility at anytime before eviction,
                  the time frame starts all over.


                  This section is how the current law currently exists and came into effect before our association existed. It is not ideal, but we did not want to bite off more than we could chew here with our first go around.


                  The section added making it a misdemeanor if the climate control facility deviates from the stated temperature and humidity ranges, adding so much liability is a concern. The Rental Agreement would have to cover every single scenario that might occur to prevent a tenant claim.

                  We’re not adding the liability, it already exists. This also is in the existing statute and something we’re not ready to repeal this time around. This only applies to the advertisement of “climate controlled” units.



                  I checked our Membership List and found that Advanced Mini Storage is not a member of the NVSSA. While, I am happy to discuss the changes we’re making to the lien law with any Nevada operator, I encourage you to join our association and support us in our future educational seminars and legislative efforts. We’re working very hard to get this through for all Nevada Self Storage Operators, as we know it will be beneficial, but the more support we can get from new members can only make our association stronger.



                  If you have additional questions, please let me know. I can be reached at the contact info below or via email.



                  Thanks,

                  Travis M. Morrow
                  Vice President
                  Designated Arizona Real Estate Broker
                  National Self Storage Management, Inc.
                  PO BOX 90540
                  Tucson, AZ 85752
                  Office: (520) 577-9777 x 223
                  Cell: (520) 390-7095
                  Fax: (520) 577-0824

                  ------------
                  Will you post the response on SelfStorageTalk.com as well? I see the concerns that people are bringing up there. We just testified in front of the Senate Judiciary Committee on Tuesday and there are going to be some changes yet to come in this process as I’m sure you know. I also want to make it clear that the eviction process for tenants living at a facility as well as the climate controlled advertising requirements were already the law and not something that we’ve added with SB150. Apparently there is some confusion as to the law as it exists today, I’m not sure when these changes were added, but they’ve been around for a couple of years at least.
                  Last edited by ams; 4 March 2011, 02:47 AM. Reason: add 2nd email
                  --
                  Ron

                  http://n6ach.com
                  http://laws.n6ach.com
                  [email protected]

                  Comment


                  • #10
                    Re: Nevada SB150

                    This section should be black text as this was a question I asked, the red section below is Mr. Morrow's responce.


                    The section added making it a misdemeanor if the climate control facility deviates from the stated temperature and humidity ranges, adding so much liability is a concern. The Rental Agreement would have to cover every single scenario that might occur to prevent a tenant claim.

                    We’re not adding the liability, it already exists. This also is in the existing statute and something we’re not ready to repeal this time around. This only applies to the advertisement of “climate controlled” units.
                    --
                    Ron

                    http://n6ach.com
                    http://laws.n6ach.com
                    [email protected]

                    Comment


                    • #11
                      Re: Nevada SB150

                      Hi Travis,
                      I have received a few phone calls about the proposed changes. A lot of concern is on the addition of the term "possessory" lien. By locking facilities into the possessory lien, we do not have a lien when we lose possession. Your comment about taking other avenues to recover the owed money may not work as there is no longer any lien. The lien will be considered satisfied if we do not have possession. It seem to one of those things that we really do not want to test in court.

                      "A lien, therefore, is any charge of a payment of debt or duty upon either real or personal property, whilst a possessory lien is "a right in one man to retain that which is in his possession belonging to another, till certain demands of him, the person in possession, are satisfied."

                      Another concern is the protected property addition. As facilities in Arizona and Washington are beginning to find out, they must go through every box, bag and container prior to a lien sale to remove any protected property. The facilities can not just tell a lien sale buyer to return any protected property, they must not sell it at all.

                      I personally like the removal of the opposition to lien sale, others have stated it was an avenue for a tenant to stop the process in case of a facility error. There is also some agreement on the valuation clause, however the courts have not ruled favorably , (see Cook v. Public Storage, Inc., 2008 WI App 155, 314 Wis. 2d 426, 761 N.W.2d 645.).

                      Have a good weekend
                      Ron
                      ----------
                      Hi Ron:


                      If you don’t have possession of a tenants stored items, how would you go about enforcing your lien? You cannot go to a tenant’s residence and attempt to recollect items from a unit so that you could sell them, you wouldn’t even know what you’re supposed to be looking for. The lien in the law now only works if you have possession of the stored items in your facility. As I mentioned before, I think people are confusing the lien with a debt. If a tenant owes you money, you have the right to collect it through the means that are available to you legally. The lien process is only one of those means. You can send the tenant to collections, negotiate with tenants to pay a portion of the debt and move out, take them to court, etc. All of those things are still available if you do not have a lien, because they have a debt to you. If you auction a tenant’s unit through the lien process and you only receive a portion of what is owed, the lien is satisfied. Do you not still attempt to collect the remainder of the debt that is owed to you by sending them to collections? The lien process gives us a mechanism through the law to return units to inventory which is its primary function. We rarely collect the full amount owed to us through this process, which leave existing debt that is up to the operator to collect if they are able. As far as testing it in court, it’s tested in small claims court everyday. Citizens take other citizens to court to try and collect debts from one another. That is no different than a small business owner taking someone to court in the same manner to collect a debt, a remedy that is always available to the self storage operator.



                      As far as the protected property goes, those people in Arizona and Washington that you mention are misunderstanding the law. It says that they cannot sell protected property of which they have Actual knowledge of it existing in the unit which is disclosed in the rental agreement. They have no liability if it is sold and they didn’t know that it was there. The same is true if a buyer at an auction does not return the protected property that they find in a unit after an auction. If they do not return it, the buyer is breaking the law, not the self storage operator. The purpose of the protected property language is to reduce the liability of the operator and I believe that it successfully does that.



                      With regards to the Declaration, Nevada is one of 2 states that have storage lien laws that use the declaration of opposition. None of the other liens described in NRS 108 have this option. The lien process opens up the storage operator to more liability than anything else we do. Operators should be very careful of accidents and should carry adequate insurance in the event they do occur. Giving the tenant the option to make you pay to take them to court to get a judgement is not a benefit for a self storage operator so we’d like to see it removed.



                      Finally, my understanding of the case you reference is that Public Storage placed a cap in their rental agreement and the courts said that they couldn’t arbitrarily do that on their own. This change would make it state law that the limit of value is set by the rental agreement if it’s included in the lease. Much more difficult for the court to rule against if that is the actual law.



                      Keep sending me questions as you receive them. I’m happy to have this discussion as the process goes along. Also, please encourage these people that you are talking to join the NVSSA, get off the sidelines, and become involved in our industry in Nevada. We have two seats on the board available and we’re looking for volunteers.


                      Thanks,

                      Travis M. Morrow

                      Vice President
                      Designated Arizona Real Estate Broker
                      National Self Storage Management, Inc.
                      PO BOX 90540
                      Tucson, AZ 85752
                      Office: (520) 577-9777 x 223
                      Cell: (520) 390-7095
                      Fax: (520) 577-0824
                      --
                      Ron

                      http://n6ach.com
                      http://laws.n6ach.com
                      [email protected]

                      Comment


                      • #12
                        Re: Nevada SB150

                        I know that we could debate how many angels can fit on the head of a pin all day, but, AMS brings up a good point. A possessory lien may or may not be combined with the right of possession. In the case of self storage liens, the ability to sell is usually a component of our lien. A more accurate word to use would be "landlord's" or "statuatory" lien rather than possessory. There does not appear to be any advantage to using "possessory."

                        As for protected property, Arizona for example requires the tenant to disclose "Whether any protected property is or will be stored in the leased space." Since Arizona eliminated the publication requirement via a newspaper, the facility can now market the sale as they see fit. However, when the manager/auctioneer opens the door to sell the property, they could actually see protected property, this becomes "actual knowledge" of the existence of the protected property and the facility cannot sell it. If the owner was not advised of the existence of protected property nor was any readily visible at the point of sale, the owner would be relieved of any liability for protected property. We must be careful to not assume that "actual knowledge" means only those disclosures made at the enception of contract. Actual knowledge also means that we were told of it, saw it, discovered it, etc. As for the auction buyers, they must realize that they are not acquiring ownership and must return protected property that is found in the space. Another case where "actual knowledge" may arise in Arizona is where the restitution lien holder is notified and takes possession of their personal property. During the course of the removal of a restitution lienholders property, the facility may have "actual knowledge" of the existence of property defined in the Code, hence, knowledge and the inability to sell those items.

                        Inasmuch as your current statutes do not have this murky "protected property" language, why would you want to further complicate an already complicated state lien law? The self storage industry does not have a problem with the type of property defined as "protected property." If you properly explain what this means to tenants, virtually every one of them will disclose that they have personal records stored at the very least, after all, who doesn't store personal and business records.

                        You are right about the opposition to the lien laws, Nevada and California are the only two states that have this language. This law exists because delinquent tenants generally do not have funds and are vulnerable to the unlawful taking and conversion of their property. If a person was well funded, they would learn of the foreclosure, hire a lawyer, get an injunction or would serve suit so that they could prove that payment had been made. The reality is that every other customer in America can do this, Nevada and California simply places the burden of proof and suit on the self storage owner since they are in the superior bargaining position, a non-judicial lien foreclosing party. This is a great benefit and due process protection for the tenant, are we sure we want to change this? How many oppositions do Nevada facilities get in a given year? Our own banking system is being excoriated for not following their foreclosure proceedings, will any legislator go along with this? Does it always have to be about what is easier for us?

                        By the way, NRS 108.355 "Contesting validity of lien on mobile home or manufactured home" is another code section that gives a party the right to contest the lien by filing an opposition.

                        As for the Cook case, the court did not opine about the dollar value of the limitation of value clause, they did not uphold the lease provision because of the nature of the case, a voluntary act of control, domination and dominion of the property; foreclosing on the property without properly notifying the plaintiff pursuant to statute. The limit of liability language used throughout the industry is often upheld in theft cases, but courts are loathe to enforce it in cases of negligence, unfair trade practices, conversion, etc.

                        Good luck on getting the legislature to pass a bill with such broad powers. In its' current wording, nothing would prevent a facility owner from limiting its liability to $999, regardless of the fact pattern? Such a legislative change would only encourage recklessness as facility owners could choose any limitation value and engage in any conduct, whether commercially reasonable or not.

                        As for the bidders language, eeks. The wording is ambiguous as "bidders" could be a noun, a person available to bid or a verb, a person who has submitted or participated in bidding. Of course, a plaintiff will alege that a bidder is a person who offered to purchase, hence, every space would have to have at least five bids, etc. I know what the drafters intend, but this is ambiguous. A better word to use would be "attendees" as this is simply five persons in attendance. Additionally, I am not sure why the magic number of five "bidders" is evidence of commercial reasonableness? Commercial reasonableness encompasses many factors, weather, policies, time, payment methods, expertise, etc. I think your current statutes are fine in their current form.

                        I know that all of this may seem petty, but wordsmithing is important. It is also important not to peddle a solution in search of a problem. Some of these proposed changes are improvement, others are questionable. My fear is that by attempting to gain a few changes, i.e., elimination of the advertising requirement, opposition, etc., you may be forced to accept added legislative changes that hurt the industry.

                        Lastly, this industry is only marginal effective at liquidating tenants property to satisfy our liens now, is it advisible to eliminate the newspaper ad? This requirement is not only effective at notifying buyers of a pending sale, it also provides notice to lienholders, other parties of interest and the community that we are following the laws of Nevada and are being fair and honest in our non-judicial foreclosure methods. Other states have at least agreed to use websites or other commercially reasonable methods of advertising auctions or sales.

                        Comment


                        • #13
                          Re: Nevada SB150

                          There may be a conflict between two amended provisions, 108.4753 says: "The owner of a facility and the owner’s heirs, assignees or successors have a possessory lien, from the date the rent for a storage space at the facility is due and unpaid, on all personal property, including protected property, located in the storage space for the rent, labor or other charges incurred by the owner pursuant to a rental agreement and for those expenses reasonably incurred by the owner to preserve, sell or otherwise dispose of the personal property." 108.4763 says: "(b) Enter the storage space and remove the personal property within it to a safe place." Does this mean that if the property is relocated and no longer in the space that the lien is lost? The current version uses the term "at the facility" which clearly states that a lien exist as long as the property is still stored at the facility.

                          NRS 108.4755 Proposes to add the following language: "A provision requiring the occupant to disclose to the owner each time the occupant stores any items of protected property in the storage space." Should you also include language that requires a definition of "protected property" in the lease so that tenants can be aware and comply with this code section?

                          108.4763 1. After the notice of the lien is mailed by the owner, if the occupant fails to pay the total amount due by the date specified in the notice, the owner may: (a) Deny the occupant access to the storage space. Does this mean that the owner cannot deny access to the facility, only the storage space?

                          108.4783 Any person who purchases the personal property in good faith at a sale to satisfy the lien: 1. Does not acquire ownership of any protected property found in the storage space. This seems to simply state that they do not acquire ownership of protected property but it does not address surrender and return as Arizona does? Is this intentional?

                          The new bill seems to change the identification of the "facility" to "space." Does this mean that a homeless person could sleep in your customer restroom or in some other common area and you could not eject them since the statutes would very specifically define "storage space as a residence?"

                          Lastly, I noticed that there is no savings clause in the bill. Considering that the judiciary may find sections unconstitutional, might it not be a good idea to include a savings clause?

                          Comment


                          • #14
                            Re: Nevada SB150

                            I came back to this thread today thinking "wait, did that really say five 'bidders', not 'attendees' or something?" and sure enough, it's the bad way. While I would applaud any effort on the part of a legislature to shed the slightest glimmer of light on the secret mysteries of "reasonable sale", this kind of unclear provision really just makes it even worse.

                            I agree about the opposition to lien sale provision being actually desirable to the storage operator. Aside from protecting the tenant in some degree, it also seems like a pretty good defense in a wrongful sale case to say "well if that's true, why didn't you just fill out the opposition form? You could have stopped the sale in its tracks for the cost of a certified letter, instead of a lawsuit." Not airtight, but certainly helpful.

                            Comment


                            • #15
                              Re: Nevada SB150

                              I think that the protected property provisions in this new lien law will discourage bidders from buying units. I know that I wouldn't want to buy units if I had to surrender perhaps the most valuable property and I could be sued if I didn't leave the protected property behind. Storage facilities already do not allow bidders to look inside boxes, etc. Suddenly, buying units at storage auctions becomes litigation prone, no thanks.

                              I also agree, virtually every customers has some personal papers that they will want to put into storage. Therefore, as this law is worded, managers will have to enter each unit, find the protected property, remove it and not sell it. When will this be done, where will the protected property be stored? Hey Nevada, LEAVE YOUR LIEN LAWS ALONE!

                              If you don't like my statement, read the disclaimer below...
                              "Freedom of speech, does not mean freedom from being offended. The Constitution does not protect your feelings..."

                              Comment

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