New Mexico Self-Storage Lien-Law Bill Faces Strong Newspaper Opposition

The New Mexico Legislature is considering an update to the state’s self-storage lien law, but the measure has come under heavy fire from the New Mexico Press Association (NMPA), which represents newspapers in the state. Senate Bill 311 would enable storage operators to e-mail tenant-default notifications, place public notifications of lien sales in media other than a local newspaper, and conduct lien auctions online. The bill is supported by the New Mexico Self Storage Association and national Self Storage Association (SSA).

The bill was introduced in January and is currently assigned to the Senate Judiciary Committee, which conducted a hearing on the measure on Feb. 2, according to “The Storage Facilitator,” an industry blog produced by SelfStorage.com.

Under the current law, New Mexico self-storage operators must publish public notices of lien sales in local newspapers, but updated language would enable placement in “any other commercially reasonable manner” as long as three independent buyers attend the auction. The NMPA objects to the public-notice provision.

“In the place of judicial oversight, lawmakers many years ago ordered personal notice to renters and public notice published in a newspaper to provide checks and balances against the power held by the [self-storage] industry,” the NMPA wrote on its website. “By providing this notice to the public, facility owners introduce transparency into a commercial arrangement that is otherwise one-sided. The notices improve the chances that, when personal notice has failed or the facility has grievously erred, an auction will be noticed by the public and any wrongs will be averted.”

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. 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.

“Classified advertisements are a $1 billion industry, yet because of obvious factors, such as a more broad reach electronically, much of the traditional advertising has migrated online,” Tim Dietz, chief operating officer of the SSA, told the source. “Only statutorily required legal advertisements create a constant source of revenue for newspapers, which is why we see their opposition in updating these laws consistent with market-driven sectors.”

The NMPA contends the self-storage industry is trying to reduce the established transparency of public auctions and exert additional power over tenants. “In state after state, the self-storage industry is arguing that the industry should further enhance its power over its renters by providing little public notice of a property seizure and auction, other than on a facility owner’s own website,” NMPA officials said.

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.

Additional updates in SB 311 would allow 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. The measure would also enable operators to impose monthly late fees equal to the greater of $20 or 20 percent of monthly rent.