California Self-Storage Lien-Law Update Blocked by Senate Judiciary Committee

Efforts to update Californias self-storage lien law by the California Self Storage Association (CSSA) and the national Self Storage Association (SSA) fell short this month when the Senate Judiciary Committee voted down the measure (Assembly Bill 983). The associations had sought to change the procedures if a defaulted tenant invokes a declaration in opposition to a lien sale.

Under current law, if a tenant invokes the declaration, then self-storage operators must seek a court order to proceed with the lien process, according to the SSA. The provision is unique to Californias self-storage lien law, and the associations had hoped to place the court-filing burden on the tenant within 30 days of returning the declaration.

Storage operators have been dissatisfied with the current procedure because a high percentage of delinquent tenants who return declarations do not show up for the requested hearing, according to CSSA officials. By changing the requirements, the CSSA hoped delinquent tenants would return a declaration only when they had legally relevant reasons for executing the form and, thus, would be more likely to appear at the hearing if they initiated the lawsuit.

The bill appeared to have favorable momentum earlier this year, but a bill analysis from a committee consultant raised concerns that switching the burden of the lawsuit to tenants would create hardships, including having the resources to file and making it difficult for out-of-state-occupants to file, according to CSSA lobbyist Randy Pollack. Senate majority leader Ellen M. Corbett also changed her previous support of the measure and lobbied against it to fellow members of the judiciary committee, Pollack said. As a result, the committee did not have enough Democratic support to push the bill forward.

There simply was not sufficient Democratic member support for this change and was the reason the bill did not move forward, said California attorney Carlos Kaslow, who serves as legal counsel to the SSA. The seven-member Senate Judiciary Committee has five Democratic members and two Republican members, and no bill can come out of committee without some Democratic support.

The judiciary committee action was a very disappointing outcome, said Erin King, CSSA executive director. We thought the bill was well on its way to passing, and to have it turned down in such a manner really had us scratching our heads. However, well keep trying to find ways to work with our legislators to bring about positive changes for our industry.

Although the committee voted down the bill, it granted reconsideration, meaning the CSSA and SSA could still pursue amending the current legislation.

The CSSA and SSA are assessing their options in light of the legislatures action, Kaslow said. The judiciary committee has indicated that it is willing to work with the storage industry on an acceptable bill. The CSSA will carefully review its options before making a final decision on how it will proceed forward but it is not a simple decision. First, the bill must go from a one-year bill onto the two-year bill track. This means that it cannot be enacted until 2014. It also increases the time and expenses that the CSSA will incur to move a revised bill forward. A decision to work with the Senate Judiciary Committee to modify the bill only makes sense if there is enough substantive change to the current lien law to justify this effort.