HF 2598

1st Engrossment - 88th Legislature (2013 - 2014) Posted on 03/06/2014 03:45pm

A bill for an act
relating to commerce; updating the Minnesota Liens on Personal Property in
Self-Service Storage Act; amending Minnesota Statutes 2012, sections 514.971,
subdivisions 2, 7, 8, by adding a subdivision; 514.973; 514.975; 514.976, by
adding a subdivision; repealing Minnesota Statutes 2012, section 514.976,
subdivisions 1, 2, 3, 4.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2012, section 514.971, subdivision 2, is amended to read:

Subd. 2.

Self-service storage facility.

deleted text begin "Self-service storage facility" means real
property that is designed and used only for renting or leasing individual storage space in
the facility under the following conditions:
deleted text end

deleted text begin (1) the occupants have access to their individual storage space only for the purpose
of storing and removing their personal property;
deleted text end

deleted text begin (2) the owner does not issue a warehouse receipt, bill of lading, or other document of
title for the personal property stored in the storage space; and
deleted text end

deleted text begin (3) the property has two or more individual storage spaces.
deleted text end

deleted text begin The term does not include a garage used principally for parking motor vehicles or
any property of a financial institution that contains vaults, safe deposit boxes, or other
receptacles for the uses, purposes, and benefits of the financial institution's customers.
deleted text end

new text begin (a) "Self-service storage facility" means any real property designed and used for the
purpose of renting or leasing individual storage space to occupants who are to have access
for the purpose of storing and removing personal property. The term does not include:
new text end

new text begin (1) any property of a financial institution that contains vaults, safe deposit boxes,
or other receptacles for the uses, purposes, and benefits of the financial institution's
customers; or
new text end

new text begin (2) a warehouse that issues a warehouse receipt, bill of lading, or other document of
title.
new text end

new text begin (b) No occupant shall use a self-service storage facility for residential purposes.
new text end

Sec. 2.

Minnesota Statutes 2012, section 514.971, subdivision 7, is amended to read:

Subd. 7.

Default.

"Default" means failure of the occupant to pay the rent and other
charges becoming due under the rental agreement within deleted text begin 15 deleted text end new text begin seven new text end days after the rents and
other charges become due under the terms of the rental agreement.

Sec. 3.

Minnesota Statutes 2012, section 514.971, subdivision 8, is amended to read:

Subd. 8.

Storage space.

"Storage space" means deleted text begin an enclosure, cubicle, or room that
is fully enclosed and equipped with a door designed to be locked for security by the
occupant deleted text end new text begin the storage space or spaces at the self-service storage facility that are rented to an
occupant pursuant to a rental agreement new text end .

Sec. 4.

Minnesota Statutes 2012, section 514.971, is amended by adding a subdivision
to read:

new text begin Subd. 10. new text end

new text begin Verified mail. new text end

new text begin "Verified mail" means any method of mailing that is
offered by the United States Postal Service or private delivery service that provides
evidence of mailing.
new text end

Sec. 5.

Minnesota Statutes 2012, section 514.973, is amended to read:

514.973 ENFORCEMENT OF LIEN.

An owner's lien established under sections 514.970 to 514.979 for a claim that has
become due must be enforced deleted text begin in the same manner as warehouse's liens under section
336.7-210. deleted text end new text begin as follows:
new text end

new text begin (1) the occupant shall be notified when rent and other charges are in default;
new text end

new text begin (2) the notice shall be delivered in person or sent by verified mail or electronic mail
to the last known address of the occupant;
new text end

new text begin (3) the notice shall include:
new text end

new text begin (i) a statement of the amount owed for rent and other charges and demand for
payment within a specified time not less than 14 days after delivery of the notice;
new text end

new text begin (ii) a notice of denial of access to the storage space, if this denial is permitted under
the terms of the rental agreement;
new text end

new text begin (iii) the name, street address, and telephone number of the owner, or of the owner's
designated agent, whom the occupant may contact to respond to this notice; and
new text end

new text begin (iv) a conspicuous statement that unless the claim is paid within the time stated in
the notice, the personal property will be advertised for sale. The notice shall specify the
time and place of the sale;
new text end

new text begin (4) any notice made pursuant to this section shall be presumed delivered when it is
deposited with the United States Postal Service or private delivery service, and properly
addressed with postage prepaid, or sent by electronic mail to the occupant's last known
e-mail address;
new text end

new text begin (i) if the owner sends notice to the occupant's last known e-mail address and does
not receive an electronic receipt that establishes delivery of the notice to the occupant's
e-mail address, the notice shall be sent to the occupant by verified mail to the occupant's
last known address;
new text end

new text begin (ii) when e-mail is offered as the sole means of communication with an occupant,
there must be included in the rental agreement a provision containing a written notice in at
least ten-point bold type, if printed, which states: by choosing the option to receive e-mail
communication in this agreement, the owner will provide you notices and other information
regarding your account through the e-mail reflected in our records, or a subsequent written
change of e-mail address has been given in accordance with the facility's procedures;
new text end

new text begin (5) after the expiration of the time given in the notice, the sale shall be either:
new text end

new text begin (i) published once a week for two weeks consecutively in a newspaper of general
circulation where the sale is to be held; or
new text end

new text begin (ii) advertised in a public, commercially reasonable manner not less than ten days
prior to the sale. A sale is considered reasonable if no fewer than three independent bidders
register for the sale and are qualified to bid on the property offered. An independent
bidder is a person who is not related to and who has no controlling interest in, or common
pecuniary interest with, the owner or any other bidder. Storage operators holding public
sales shall require the bidder to register and agree to the auction rules. When online sales
are conducted, registration is required and the bidder viewing each sale is automatically
recorded;
new text end

new text begin (6) a sale of personal property may take place no sooner than 45 days after default;
new text end

new text begin (7) a sale of the personal property shall conform to the terms of the notification;
new text end

new text begin (8) a sale of the personal property shall be public and shall be held at the self-service
storage facility, or at the nearest suitable place at which the personal property is held
or stored. A sale conducted online through a Web site that conducts public auctions is
a suitable location for the sale;
new text end

new text begin (9) notwithstanding any law, rule, or regulation to the contrary, if the property upon
which the lien is claimed is a motor vehicle or watercraft, and rent and other charges
related to the property are in default for 60 consecutive days, the owner may have the
property towed by a towing company. The self-storage facility's lien is terminated and
may not be enforced effective upon the possession of the property by the towing company.
If a motor vehicle or watercraft is towed as authorized in this clause, the owner shall:
new text end

new text begin (i) send, by verified or electronic mail, to the occupant's last known address, the
name, address, and telephone number of the towing company that will perform the towing
and the street address of the storage facility where the towed property can be redeemed; and
new text end

new text begin (ii) not be liable for the motor vehicle or watercraft or any damages to the motor
vehicle or watercraft once the towing company takes possession of the property;
new text end

new text begin (10) before a sale of personal property, the occupant may pay the amount necessary to
satisfy the lien and the reasonable expenses incurred by the owner to redeem the personal
property. Upon receipt of this payment, the owner shall return the personal property, and
the owner shall have no liability to any person with respect to the personal property;
new text end

new text begin (11) a self-service storage facility's lien may be enforced by public sale of the goods,
in bulk or in lots at any time or place and on any terms that are commercially reasonable.
The self-service storage facility sells in a commercially reasonable manner if the facility
sells the goods at a public sale conducted in person or at an online publicly accessible Web
site, sells at the price current in that market at the time of the sale, or otherwise sells in
conformity with commercially reasonable practices among dealers in the type of goods
sold;
new text end

new text begin (12) the owner may satisfy the lien from the proceeds of the sale but shall hold the
balance, if any, and give notice to the occupant of the occupant's right to the funds. If
the balance, if any, remains unclaimed by the occupant for more than one year after the
sale of the goods, the balance shall be deposited into the state unclaimed property funds
account under sections 345.31 to 345.60; and
new text end

new text begin (13) the owner's liability arising from the sale of personal property under this section
is limited to the proceeds received from the sale of that property.
new text end

Sec. 6.

Minnesota Statutes 2012, section 514.975, is amended to read:

514.975 RENTAL AGREEMENTS.

new text begin Subdivision 1. new text end

new text begin Disclosure. new text end

The rental agreement between the owner and the
occupant must include a disclosure of the lien rights of the owner upon failure of the
occupant to pay rent including the right to deny access to certain personal property
contained in the self-service storage facility, and the extent and the limits of insurance
carried by the owner covering the occupant's personal property stored in the leased
premises. deleted text begin A rental agreement may not exempt an owner from liability for damages to an
occupant's personal property caused by the owner's negligence. The rental agreement must
request the occupant to insert an alternate mailing address.
deleted text end

new text begin Subd. 2. new text end

new text begin Value of stored property. new text end

new text begin If the rental agreement entered into between the
owner and the occupant contains a provision placing a limit on the value of property that
may be stored in the occupant's space, this limit shall be deemed to be the maximum value
of the stored property, provided that the provision is printed in bold type or underlined
in the rental agreement.
new text end

new text begin Subd. 3. new text end

new text begin Late fees. new text end

new text begin Any late fee charged by the owner shall be provided for in the
rental agreement. No late fee shall be collected unless it is written in the rental agreement
or as an addendum to such agreement. An owner may impose a reasonable late fee for
each month an occupant does not pay rent when due. A late fee of $20 or 20 percent of the
monthly rental amount, whichever is greater, for each late rental payment shall be deemed
reasonable, and shall not constitute a penalty.
new text end

Sec. 7.

Minnesota Statutes 2012, section 514.976, is amended by adding a subdivision
to read:

new text begin Subd. 4a. new text end

new text begin Service of process; claim by a tenant. new text end

new text begin The owner may be served at the
self-service storage facility for any claim by a tenant against the owner.
new text end

Sec. 8. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2012, section 514.976, subdivisions 1, 2, 3, and 4, new text end new text begin are repealed.
new text end

Sec. 9. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 8 are effective August 1, 2014, and apply to personal property put in
self-service storage on or after that date.
new text end