Maryland Self-Storage Lien-Law Update Faces Newspaper Opposition

The Maryland House of Delegates is considering an update to the state’s self-storage lien law, but the measure has come under fire by the Maryland-Delaware-D.C. Press Association (MDDC), a newspaper advocacy group. House Bill 786 specifically addresses public notification of lien sales and would enable storage operators to advertise unit auctions in media other than a local newspaper. The bill is supported by the Maryland Self Storage Association and national Self Storage Association.

The bill was introduced Feb. 13 and is sponsored by members of the Maryland House Economic Matters Committee. A hearing is scheduled for March 4. If passed, the updated law would go into effect on Oct. 1, according to the source.

The state passed an updated lien law in 2013 that enables storage operators to send lien notices via e-mail and conduct auctions online, among other changes, but efforts to include the public-notice option failed. Under the current law, operators can hold a lien auction once tenant delinquency exceeds 60 days and the tenant has been notified twice. Auction notices currently must be placed in a newspaper of general circulation in the jurisdiction where the sale is to be held. The new language would allow operators to advertise lien sales in “any other commercially reasonable manner” as long as at least three independent bidders attend the auction.

Officials at MDDC believe the advertising allowance is too broad and argue that newspaper notices also serve as a backup for notifying defaulted tenants. “This is a vulnerable group of people, and because they’re moving around, efforts to notify them over e-mail or phone might not be successful,” Rebecca Snyder, executive director of the MDDC, told the source. “Ads in community papers are the strongest, most consistent way to notify people, especially when property is being taken.”

However, the requirement to publish public lien-sale notices in newspapers potentially winds up costing delinquent tenants money because advertising costs are subtracted from any auction proceeds, which must be provided to the defaulted renter after unit contents are sold, according to Jeffrey Greenberger, an attorney specializing in self-storage and a partner in the Cincinnati law firm of Katz Greenberger & Norton LLP.

“A lot of people think that the newspaper advertising is another way to warn the tenant, but I’ve contended for years that if they are not going to keep up with their e-mail or phone, they are probably not flipping through the legal notices,” Greenberger told the source.

“My understanding of the bill is that it simply gives more options. It doesn’t mean that there will be no print ads,” added Delegate Sally Jameson, vice chair of the Maryland House Economic Matters Committee.

Similar lien-law updates allowing publication of public notices in media other than local newspapers have recently been passed in several states, including Georgia, Indiana, Minnesota, Missouri and North Carolina. A similar update is currently under consideration in New Mexico. Newspaper and publishing groups have routinely opposed these updates, in part because the placement of public notices in classified-advertising sections is a source of revenue for newspapers.