HF 2598

2nd Engrossment - 88th Legislature (2013 - 2014) Posted on 03/21/2014 12:47pm

A bill for an act
relating to commerce; updating the laws regulating liens on personal property in
self-storage; amending Minnesota Statutes 2012, sections 514.971, subdivisions
2, 7, 8, by adding a subdivision; 514.972, subdivisions 4, 5; 514.973; 514.974;
514.975.

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" or "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;
new text end

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

new text begin (3) a commercial parking garage or parking lot that provides short-term motor
vehicle parking.
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 ten 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 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 514.972, subdivision 4, is amended to read:

Subd. 4.

Denial of access.

Upon default new text begin , new text end the owner shall mail notice of default deleted text begin to the
occupant at the last known address of the occupant deleted text end new text begin as provided under section 514.974 new text end . The
owner may deny the occupant access to the personal property contained in the self-service
storage facility after default, service of the notice of default, deleted text begin expiration of the date stated
for denial of access, deleted text end and application of any security deposit to unpaid rent. The notice
of default must state the date that the occupant will be denied access to the occupant's
personal property in the self-service storage facility and that access will be denied until
the owner's claim has been satisfied. The notice of default must state that any dispute
regarding denial of access can be raised by the occupant beginning legal action in court.
Notice of default must further state the rights of the occupant contained in subdivision 5.

Sec. 6.

Minnesota Statutes 2012, section 514.972, subdivision 5, is amended to read:

Subd. 5.

Access to certain items.

new text begin (a) Upon demand to any of the persons listed in
section 514.976, subdivision 1, new text end the occupant may remove from the self-service storage
facility new text begin :
new text end

new text begin (1) new text end personal papers deleted text begin , health aids, deleted text end new text begin and new text end personal clothing of the occupant and the
occupant's dependents deleted text begin , and personal property that is necessary for the livelihood of the
occupant, deleted text end that has a market value of less than deleted text begin $50 deleted text end new text begin $75 new text end per item deleted text begin , if demand is made to any
of the persons listed in section 514.976, subdivision 1. deleted text end new text begin ;
new text end

new text begin (2) personal property that is necessary for the livelihood of the occupant, including
tools, machines, and instruments of trade not exceeding the value listed in section 550.37,
subdivision 6; and
new text end

new text begin (3) health aids and durable medical equipment, regardless of value.
new text end

new text begin (b) new text end The occupant shall present a list of the items, and may remove them during the
facility's ordinary business hours prior to the sale authorized by section 514.973. new text begin The total
market value of property removed under subdivisions 1 and 2 cannot exceed $250. new text end If the
owner unjustifiably denies the occupant access for the purpose of removing the items
specified in this subdivision, the occupant is entitled to an order allowing access to the
storage unit for removal of the specified items. The self-service storage facility is liable
to the occupant for the costs, disbursements and attorney fees deleted text begin expended by the occupant
deleted text end to obtain this order.

new text begin (c) The provisions of this subdivision may not be waived or modified.
new text end

new text begin (d) Only natural persons are entitled to access to certain items under this subdivision.
new text end

Sec. 7.

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

514.973 ENFORCEMENT OF LIEN.

new text begin Subdivision 1. new text end

new text begin Generally. new text end

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 provided in this section.
new text end

new text begin Subd. 2. new text end

new text begin Notice; to whom and how sent. new text end

new text begin (a) The occupant and any person who has
delivered written notice of a claim of an interest in the contents in the storage space to the
owner shall be notified when rent and other charges are in default.
new text end

new text begin (b) The notice must be delivered in person or sent by verified mail as provided
under section 514.974. Notice sent by verified mail is presumed delivered when it is
deposited with the United States Postal Service or private delivery service, and properly
addressed with postage prepaid.
new text end

new text begin (c) The owner must obtain the informed, written consent of the occupant to send
notices exclusively via electronic mail. An occupant may withdraw consent at any time.
The owner may not notify the occupant of the default by electronic mail unless the rental
agreement, or a written change to the rental agreement, contains a written notice in at least
12-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 in a subsequent
written change of e-mail address that has been given according to the facility's procedures."
new text end

new text begin (d) The owner must verify that a notice sent by electronic mail has been delivered
by obtaining an electronic receipt that establishes delivery of the notice to the occupant's
e-mail address. If delivery of the electronic mail notice cannot be verified, the storage
facility must deliver the notice in person or send the notice by verified mail. If the notice
must be delivered in person or sent by verified mail after delivery by electronic mail
has failed, the period specified in subdivision 3 shall not begin until the date the notice
is delivered in person or by verified mail.
new text end

new text begin Subd. 3. new text end

new text begin Content of notice. new text end

new text begin The notice shall include:
new text end

new text begin (1) 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 (2) pursuant to section 514.972, subdivision 4, 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 (3) 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;
new text end

new text begin (4) 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; and
new text end

new text begin (5) a conspicuous statement of the items that the occupant may remove without
charge pursuant to section 514.972, subdivision 5, if the occupant is denied general access
to the storage space.
new text end

new text begin Subd. 4. new text end

new text begin Sale of property. new text end

new text begin (a) A sale of personal property, other than the sale of a
motor vehicle or a watercraft, may take place no sooner than 45 days after default. Motor
vehicles or watercrafts may only be removed or sold pursuant to subdivision 7.
new text end

new text begin (b) After the expiration of the time given in the notice, the sale must be published
once a week for two weeks consecutively in a newspaper of general circulation where
the sale is to be held. The sale may take place no sooner than 15 days after the first
publication. If the lien is satisfied before the second publication occurs, the second
publication is waived. If there is no qualified newspaper under chapter 331A where the
sale is to be held, the advertisement may be posted on an independent, publicly accessible
Web site that advertises self storage lien sales or public notices. The advertisement must
include a description of the goods, the name of the person on whose account the goods are
being held, and the time and place of the sale.
new text end

new text begin (c) A sale of the personal property must conform to the terms of the notification.
new text end

new text begin (d) A sale of the personal property must be public and must be held at the storage
facility, or at the nearest suitable place at which the personal property is held or stored.
Online sales are permitted. Owners shall require all bidders, including online bidders, to
register and agree to the rules of the sale.
new text end

new text begin (e) The sale must be conducted in a commercially reasonable manner. A sale is
commercially reasonable if the property is sold in conformity with the practices among
dealers in the property sold or sellers of similar distressed property sales.
new text end

new text begin Subd. 5. new text end

new text begin Averting the sale. new text end

new text begin Before any sale pursuant to this section is conducted,
any person claiming a right to the personal property may redeem the property by paying
the amount sufficient to satisfy the lien and the reasonable expenses incurred complying
with this section. If sufficient payment is made, the personal property may not be sold.
new text end

new text begin Subd. 6. new text end

new text begin Surplus. new text end

new text begin A storage facility may satisfy its lien from the proceeds of any
sale pursuant to this section, provided that the storage facility must hold any sum obtained
from the sale that exceeds the amount sufficient to satisfy the lien and the reasonable
expenses incurred complying with this section for delivery on demand to the occupant
and give notice to the occupant of the occupant's right to the funds as provided in section
514.974. Any balance remaining unclaimed by the occupant for more than one year after
the sale of the goods must be deposited into the state unclaimed property funds account
under sections 345.31 to 345.60.
new text end

new text begin Subd. 7. new text end

new text begin Special procedures for motor vehicles. new text end

new text begin (a) Notwithstanding any law, rule,
or regulation to the contrary, if the personal 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 sell the motor vehicle or watercraft as provided in
this section or have the motor vehicle or watercraft towed by a towing company.
new text end

new text begin (b) The owner's lien is terminated upon the towing company taking possession
of the property.
new text end

new text begin (c) If a motor vehicle or watercraft is towed as authorized in this subdivision, the
owner shall:
new text end

new text begin (1) send, by the method provided under subdivision 2, 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 (2) 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. Nothing
in this section relieves the towing company from liability for damage for which they
would otherwise be liable.
new text end

new text begin Subd. 8. new text end

new text begin Liability for damage. new text end

new text begin An occupant injured by a violation of this section
may bring a civil action to recover damages.
new text end

new text begin Subd. 9. new text end

new text begin No effect on other rights. new text end

new text begin The rights provided under this section are in
addition to all other rights allowed by law to a creditor and a debtor.
new text end

Sec. 8.

Minnesota Statutes 2012, section 514.974, is amended to read:

514.974 ADDITIONAL NOTIFICATION REQUIREMENT.

deleted text begin In addition to the requirements of section 336.7-210, the deleted text end Notification of the proposed
sale of personal property must include a notice of denial of access to the personal property
until the owner's claim has been satisfied. Any notice the owner is required to mail to the
occupant under sections 514.970 to 514.979 shall be sent to new text begin :
new text end

new text begin (1) the e-mail address provided by occupant, as provided in section 514.973,
subdivision 2;
new text end

new text begin (2) new text end the mailing address and deleted text begin the deleted text end new text begin any new text end alternate mailing address provided by the
occupant in the rental agreement deleted text begin . deleted text end new text begin ; or
new text end

new text begin (3) the last known mailing address of the occupant, if the last known mailing address
differs from the mailing address listed by the occupant in the rental agreement and the
owner has reason to believe that the last known mailing address is more current.
new text end

Sec. 9.

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. A rental agreement
may not exempt an owner from liability for damages to an occupant's personal property
caused by the owner's negligence. deleted text begin The rental agreement must request the occupant to insert
an alternate mailing address. deleted text end new text begin A rental agreement must contain a provision that allows the
occupant to provide an optional alternate contact person. The alternate contact person is
used solely for purposes of providing notice of default under section 514.973. Adding an
alternate contact does not give that contact interest in the contents of the storage space.
new 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 is the maximum value of the stored
property, provided that the provision is printed in bold type or underlined in the rental
agreement. The limit on value of property may not be less than $1,000.
new text end

new text begin Subd. 3. new text end

new text begin Military protections. new text end

new text begin A rental agreement or an application for a rental
agreement must contain a provision disclosing whether the applicant is a member of the
uniformed services as the term is defined in United States Code, title 10, section 101(a)(5).
new text end

Sec. 10. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 9 are effective August 1, 2014, and apply to personal property put in
self-service storage on or after that date.
new text end