Minnesota Session Laws - 1988, Regular Session

  

                         Laws of Minnesota 1988 

                        CHAPTER 425-S.F.No. 187 
           An act relating to liens; personal property; 
          establishing a lien on personal property held in 
          self-service storage facilities; providing for the 
          enforcement of these liens; regulating rental 
          agreements and advertising; proposing coding for new 
          law in Minnesota Statutes, chapter 514. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  [514.970] [TITLE.] 
    Sections 1 to 10 may be cited as the "Minnesota liens on 
personal property in self-service storage act."  
    Sec. 2.  [514.971] [DEFINITIONS.] 
    Subdivision 1.  [SCOPE.] For the purposes of sections 1 to 
10, the terms defined in this section have the meanings given 
them. 
    Subd. 2.  [SELF-SERVICE STORAGE FACILITY.] "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:  
    (1) the occupants have access to their individual storage 
space only for the purpose of storing and removing their 
personal property;  
    (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 
    (3) the property has 2 or more individual storage spaces.  
    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.  
    Subd. 3.  [OWNER.] "Owner" means one or more persons, 
jointly or severally, who are either the owner of a self-service 
storage facility, or the lessor of an entire self-service 
storage facility, and who receive rent from an occupant under a 
rental agreement entered into with the occupant.  
    Subd. 4.  [OCCUPANT.] "Occupant" means a person who rents 
storage space at a self-service storage facility under a rental 
agreement entered into with the owner.  
    Subd. 5.  [RENTAL AGREEMENT.] "Rental agreement" means a 
written agreement that is entered into by the owner and the 
occupant and that establishes the terms and conditions of the 
occupant's use of storage space at a self-service storage 
facility.  
    Subd. 6.  [PERSONAL PROPERTY.] "Personal property" means 
money and every inanimate tangible thing that is the subject of 
ownership.  The term does not include anything forming part of a 
parcel of real estate and agricultural commodities. 
     Subd. 7.  [DEFAULT.] "Default" means failure of the 
occupant to pay the rent and other charges becoming due under 
the rental agreement within 15 days after the rents and other 
charges become due under the terms of the rental agreement. 
     Subd. 8.  [STORAGE SPACE.] "Storage space" means an 
enclosure, cubicle, or room that is fully enclosed and equipped 
with a door designed to be locked for security by the occupant. 
     Subd. 9.  [SECURITY DEPOSIT.] "Security deposit" means any 
deposit of money with the owner used to secure performance under 
the rental agreement. 
    Sec. 3.  [514.972] [LIEN AGAINST PROPERTY.] 
   Subdivision 1.  [CREATION.] The owner of a self-service 
storage facility has a lien against the occupant on the personal 
property stored under a rental agreement in a storage space at 
the self-service storage facility, or on the proceeds of the 
personal property subject to the defaulting occupant's rental 
agreement in the owner's possession.  The lien is for rent, 
labor, and other charges in relation to the personal property 
specified in the rental agreement that have become due and for 
expenses necessary for the preservation of the personal property 
or expenses reasonably incurred in the sale or other disposition 
of the personal property under law.  The lien provided for in 
this section is superior to other security interests except 
those perfected before the date the lien attaches. 
    Subd. 2.  [ATTACHMENT.] The owner's lien created by this 
section attaches as of the date the occupant is in default 
unless the occupant obtains a court order to recover possession 
of personal property in the self-service storage facility.  No 
lien is created under subdivision 1 or shall attach under this 
subdivision to any personal property listed under subdivision 5, 
unless the occupant fails to remove the personal property before 
the sale authorized by section 4.  An owner loses the lien on 
personal property that the owner permits to be removed from the 
self-service storage facility or unjustifiably refuses to permit 
to be removed from the facility. 
     Subd. 3.  [SECURITY DEPOSITS.] No lien is created under 
subdivision 1 if the owner has possession of a security deposit 
sufficient to cover rents and other charges at the time of an 
alleged default. 
    Subd. 4.  [DENIAL OF ACCESS.] Upon default the owner shall 
mail notice of default to the occupant at the last known address 
of the occupant.  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, expiration of 
the date stated for denial of access, 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. 
     Subd. 5.  [ACCESS TO CERTAIN ITEMS.] The occupant may 
remove from the self-service storage facility personal papers, 
health aids, personal clothing of the occupant and the 
occupant's dependents, and personal property that is necessary 
for the livelihood of the occupant, that has a market value of 
less than $50 per item, if demand is made to any of the persons 
listed in section 7, subdivision 1.  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 
4.  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 expended by the occupant 
to obtain this order. 
    Sec. 4.  [514.973] [ENFORCEMENT OF LIEN.] 
    An owner's lien established under sections 1 to 10 for a 
claim that has become due must be enforced in the same manner as 
warehouse operator's liens under section 336.7-210. 
    Sec. 5.  [514.974] [ADDITIONAL NOTIFICATION REQUIREMENT.] 
    In addition to the requirements of section 336.7-210, the 
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 1 to 10 
shall be sent to the mailing address and the alternate mailing 
address provided by the occupant in the rental agreement. 
    Sec. 6.  [514.975] [RENTAL AGREEMENTS.] 
    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.  The rental 
agreement must request the occupant to insert an alternate 
mailing address.  
      Sec. 7.  [514.976] [DISCLOSURE AND ACTIONS.] 
     Subdivision 1.  [DISCLOSURE.] There shall be disclosed to 
the occupant either in the rental agreement or otherwise in 
writing prior to commencement of the occupancy the name and 
address of: 
     (1) the person authorized to manage the premises; and 
     (2) an owner of the premises or an agent authorized by the 
owner to accept service of process and receive and give receipt 
for notices and demands. 
     Either in the rental agreement or otherwise in writing the 
occupant shall also be notified that the owner prohibits the 
storage of hazardous materials. 
    Subd. 2.  [POSTING OF NOTICE.] A printed or typewritten 
notice containing the information that must be disclosed under 
subdivision 1 must be placed in a conspicuous place on the 
premises. 
     Subd. 3.  [ALTERNATE SERVICE.] If subdivisions 1 and 2 have 
not been complied with and an occupant desiring to make service 
of process upon or give a notice or demand to the owner does not 
know the name and address of the owner or the owner's agent, as 
that term is used in subdivision 1, then a caretaker or manager 
of the premises or an individual to whom rental payments for the 
premises are made is deemed to be an agent authorized to accept 
service of process and receive and give receipt for notices and 
demands on behalf of the owner. 
     Subd. 4.  [ACTION.] Except as otherwise provided in this 
subdivision, an owner may not maintain an action to recover rent 
or possession of the premises unless the information required by 
this section has been disclosed to the occupant, or unless the 
information is known by or has been disclosed to the occupant at 
least 30 days prior to the initiation of the action.  Failure by 
the owner to post a notice required by subdivision 2 does not 
prevent any action to recover rent or possession of the 
premises.  Any action begun by the owner or occupant shall be 
venued in the county where the facility is located.  If an 
action to recover possession of personal property in the 
facility is begun by the occupant, the burden of proof shall be 
borne by the owner that default has occurred and the provisions 
of sections 1 to 10 have been followed. 
     Subd. 5.  [APPLICATION.] This section applies to any 
successor owner, caretaker, manager, or individual to whom 
rental payments for the storage space are made. 
     Sec. 8.  [514.977] [DEFAULT.] 
     If an occupant defaults in the payment of rent or otherwise 
breaches the rental agreement, the owner may commence an 
unlawful detainer action under section 566.01. 
     Sec. 9.  [514.978] [WAIVER OR MODIFICATION PROHIBITED.] 
    The owner and occupant may not waive or modify the 
provisions of sections 1 to 10. 
    Sec. 10.  [514.979] [ADVERTISING.] 
    No owner shall advertise or represent its services, or 
permit its services to be advertised or represented, in a manner 
that uses the word "warehouse" unless the owner is licensed and 
bonded as provided in chapter 231.  
    Nothing in this section prohibits the use of the term 
"self-service storage facility" in an advertisement or 
representation.  
    Sec. 11.  [EFFECTIVE DATE.] 
    Sections 1 to 10 are effective August 1, 1988, and apply to 
rental agreements entered into on or after that date. 
    Approved March 29, 1988