Announcement

Collapse
No announcement yet.

HOUSE BILL 1265 and SENATE BILL 1293

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • 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
    --
    Ron

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

  • #2
    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

    Comment


    • #3
      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.
      --
      Ron

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

      Comment


      • #4
        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..."

        Comment


        • #5
          Re: HOUSE BILL 1265 and SENATE BILL 1293

          Paging tnsd.
          John Carlisle
          Community Manager Emeritus
          Still a Big Fan of Self-Storage!
          www.chicagoprowriter.com

          Comment


          • #6
            Re: HOUSE BILL 1265 and SENATE BILL 1293

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

            Comment


            • #7
              Re: HOUSE BILL 1265 and SENATE BILL 1293

              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..."

              Comment


              • #8
                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.
                --
                Ron

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

                Comment


                • #9
                  Re: HOUSE BILL 1265 and SENATE BILL 1293

                  First of all, this survey is not statitically significant and severely flawed. TNSSA members asked customers survey questions and then reported their responses. This is a very unreliable polling method. This is like asking a child if they want to go to the doctor and get a shot! Do you think the results may be biased?

                  Secondly, of course tenants are going to prefer notification via email or regular mail and not publication. The problem here is that since the facility contracted with individual tenants, there is typically no problem associated with have contact information since the facility has a written rental agreement. There are many reasons why we need to keep using newspapers for notification. The newspaper advertisements are designed to inform those interested parties that ARE NOT A PARTY TO A CONTRACT and would therefore NOT know of a pending sale of property.

                  It seems as though various state associations are attempting to eliminate the newspaper advertisement requirement solely because we do not like the associated costs. However, the newspaper advertisement is essential for just a few of the following reasons:

                  1. The newspaper advertisement serves as a public notice to interested parties. An interested party may have their items in the space but are not a named lessee on the rental agreement.

                  2. The newspaper advertisement serves to put lien holders on notice as they have an interest in the space since they may have property in the space in which they have a lien on, for example, furniture, business assets, vehicles, etc.

                  3. Potential auction buyers STILL use newspapers to find lien sales being conducted in a given area. While the internet has gained popularity, the auction buyers still tend to search the legal notices in the local newspaper.

                  4. The newspaper advertisement serves to notify any member of the public that their friends, relatives or acquaintences property is subject to being sold. The theory behind public notifications is that it also helps other parties to assist in the notification of a non-judicial foreclosure to named parties that may not know of the pending foreclosure.

                  5. The newspaper advertisement notifies the publc at large that self storage facilities use a non-judicial foreclosure method and even encourages the public to attend the sales of that property to ensure that self storage facilities comply with the law and that their sales are being conducted in a commercially reasonable manner.

                  6. The newspaper advertisement notifies other parties that may have a judgment against the same named debtor so that they can petition the court and be paid their judgment out of the excess proceeds in the event that the storage facility sells the personal property for more than the outstanding lien amount.

                  7. The newspaper advertisement notifies the customer that their property is in jeopardy and may be sold if they do not satisfy the outstanding lien amounts.

                  8. The newspaper advertisement tends to act as a deterrent against potential fraud and theft of tenants property. Absent an advertising requirement, it would much easier for a dishonest manager to simply give the property away or sell it and potentially pocket the proceeds. When sales are advertised, any plaintiff can search the public records and find a "proof of publication" published by the newspaper.

                  9. The newspaper advertisement is typical for non-judicial foreclosures. Take the time to look through the legal section of any newspaper. You will find notices of foreclosures on homes and commercial buildings. The reason for legal notification in these foreclosure processes are the same as those that we use in self storage. The potential for fraud is much higher if public notification is not used.

                  10. The newspaper advertisement serves as notification to all those tenants that are paid up as well. By publishing the name, unit number and brief description of the goods, a current tenant could potentially see their name or unit number in the ad and contact the facility to notify them that they have made a mistake.

                  11. The newspaper advertisement can also serve to notify the public at large of potential stolen property that has been stored. Most states require a brief and general description of the property being stored. The notices assists in notifying everyone of the type and kind of property stored and subject to the lien.

                  12. The newspaper advertisement also notifies the public at large of tenants subject to foreclosure when the public may not know that a deceased tenant even had a self storage unit. It is very common that decendents did not tell family members of the existence of a storage space and many often learn of this through the legal notices published in a newpaper.

                  The reality is that the tenant is not the only beneficiary of this practice, there are many other parties that benefit from public notification. Tennessee is the type of area where public notification is very effective. It is much more likely in Tennessee that a cousin, brother, aunt, uncle, college friend, neighbor will see a public notice and call their buddy.

                  I suspect that the states that are attempting to eliminate the public notification requirement are just trying to save a little money, money that we can pass along to the tenant anyway. BAD IDEA!!!!!
                  "Freedom of speech, does not mean freedom from being offended. The Constitution does not protect your feelings..."

                  Comment


                  • #10
                    Re: HOUSE BILL 1265 and SENATE BILL 1293

                    Hey thanks Hurlco, I never knew that the newspaper ad had that kind of impact.

                    I was at a party the other day with some friends and since I am the storage guy we started talking about Storage Wars. Anyway, one of the group asked me how long we waited before we sold someone's stuff. I told them that we could sell in as little as 65 days and they were all floored. I would say, they were aghast with shock. This is a typical reaction when my friends ask this question. I get the impression that our industry is trying to eliminate any impediment to our selling tenants goods with very little notice, oversight or even fairness. I mean my gosh, we can sell them in pretty short order now, and we want to make it easier?

                    As for the TNSSA survey, many people do not subscribe to the local newspaper because they don't have the time to read it everyday. I read the paper once or twice a week, that's it, but I still read the newspaper.

                    Why would anyone read the legal notices unless they had an interest in that section. I think Hurlco covered pretty well the reasons why certain people would look there.

                    Only 80% have email and internet access. That seems more like an argument to keep the newspaper ad, not get rid of it. In Washington, I'd say we have 95% have email and internet.

                    Notification? Of course everyone is going to want something personal and delivered directly too them. Who would want their name published in the paper? In Washington, we do not publish in the newspaper. Many of my competitors get a very low turnout to their auctions because buyers do not know about their auctions.

                    Why don't we make it easy and just pass a law that says that when we get sick and tired of your non-payment, we can just declare that we own your stuff and we can do anything with it we want to. C'mon Tennessee, we know you can do it....

                    Comment


                    • #11
                      Re: HOUSE BILL 1265 and SENATE BILL 1293

                      I thought of another reason for the publication of a newspaper advertisement!

                      13. The newspaper advertisement can be introduced as evidence in the event a plaintiff sues the self storage facility as proof that the unit was sold on a particular date and time. While it is still possible to falsify the sale, at least the newspaper ad demonstrates that the public/tenant was notified. Without the newspaper ad, anyone can simply give or sell the items without conducting a public sale and therefore could be challenged on the commercial reasonableness of the sale.

                      Am I the only person that cares about this legislation?
                      "Freedom of speech, does not mean freedom from being offended. The Constitution does not protect your feelings..."

                      Comment


                      • #12
                        Re: HOUSE BILL 1265 and SENATE BILL 1293

                        No you are not, this does affect us all. Many are finding it disturbing about some of the changes being made. I am also disapointed that we have not heard from the association trying to get this passed.

                        Last night I was visiting with a local attorney and one of the things he said was "it looks like some people just want their name associated with new legislation". Which is almost what Mr. Litton and myself said word for word a few days ago.
                        --
                        Ron

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

                        Comment


                        • #13
                          Re: HOUSE BILL 1265 and SENATE BILL 1293

                          I have sent an email request to the Tennessee Association asking that they come on here and respond to the concerns.

                          I really hope they do.
                          --
                          Ron

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

                          Comment


                          • #14
                            Re: HOUSE BILL 1265 and SENATE BILL 1293

                            Well, it has been almost a month and I have not received any response from anyone in the Tennessee Association. The senate has added some to the bill.

                            Admendent #1 http://www.capitol.tn.gov/Bills/107/Amend/SA0106.pdf

                            and

                            Amendment No. 2 to SB1293
                            Southerland
                            Signature of Sponsor
                            AMEND S e nate Bill No. 1293 House Bill No. 1265*
                            SA0184
                            00572409
                            -1-
                            by deleting from the amendatory language of Section 14, as amended, the first two sentences
                            and substituting instead the following:
                            After expiration of the time stated in the notice and if the personal property has not
                            otherwise been disposed, the owner shall advertise the sale of the personal property.
                            Such advertisement of sale shall include, but not be limited to, the publishing one (1)
                            time before the date of the sale of the personal property in a newspaper of general
                            circulation which serves the area where the self storage facility is located.
                            --
                            Ron

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

                            Comment


                            • #15
                              Re: HOUSE BILL 1265 and SENATE BILL 1293

                              ISS website posted an update on this yesterday:

                              http://www.insideselfstorage.com/new...see-house.aspx
                              John Carlisle
                              Community Manager Emeritus
                              Still a Big Fan of Self-Storage!
                              www.chicagoprowriter.com

                              Comment

                              Latest Topics

                              Collapse

                              Working...
                              X