Kentucky Governor Signs New Self-Storage Lien-Law, Tenant-Insurance Measures

Kentucky Gov. Steve Beshear has signed an amended bill updating the state’s self-storage lien-law process as well as a bill granting storage operators the ability to act as limited-lines agents for tenant insurance. Both bills were signed last week and lobbied by the national Self Storage Association and the Kentucky Self Storage Association.

Senate Bill 150 enables operators to send lien-sale notifications to tenants via “verified electronic mail” and verified mail. A verified e-mail address is one for which the sender has used “reasonable means” to verify. First notifications can still be sent by regular mail, according to the bill. The new law also allows for lien auctions to take place on a publically accessible website.

The measure also allows operators to place limitations in rental agreements on the value of stored goods. The limit specified on the lease would be considered the maximum value of the tenant’s stored property. The bill also addresses motor vehicles and would enable operators to have vehicles belonging to delinquent tenants towed after 60 days.

In addition, the law enables operators to impose monthly late fees, after five days delinquency, equal to the greater of $20 or 20 percent of monthly rent. Self-storage businesses can also recoup from tenants “reasonable expenses” incurred from pursuing rent collection or lien enforcement.

House Bill 357 enables operators to “offer and disseminate” tenant insurance on behalf of insurance carriers approved by the state. Under the law, the insurance producer’s name must be clearly identified on materials, and self-storage employees assigned to offer the insurance to customers must undergo a training program that is subject to review by the state commissioner.

The law also requires operators to make certain disclosures to customers, including a statement that insurance coverage may duplicate coverage in a policy already held by the tenant. If tenant insurance is listed as a conditional requirement on a rental agreement, customers would be able to satisfy the requirement by purchasing the insurance offered through the self-storage facility or by producing evidence of other applicable coverage.