California Self Storage Community to See Drastic Lien Notice Amendments

The state of California is, among many other things, known for its proclivity to enact sensible, meaningful changes to its laws and business regulations. Such was certainly the case on September 30th, 2010, when Governor Arnold Schwarzenegger signed a new bill amending the lien laws that affect California’s many self storage facilities. What seemed like “common sense changes” to many self storage owners required the combined efforts (and, well, funds) of the California Self Storage Association (CSSA) and the larger national Self Storage Association (SSA).

But what, exactly, are the changes that they have made? A great question, and one that can be broken down into rather simple terms. First and foremost, the bill changes the manner with which a facility can send out its lien notices. In the past, self storage owners were required to use certified mail (a somewhat costly option, but one that presented owners with proof that their lien notice was not only sent, but received by the customer, who had to sign the notice upon receiving it). Now, facilities can simply use a certificate of mailing—a receipt that proves that the mail was received by the post office. If that sounds like a bunch of jargon, feel free to think of it this way: storage owners stand to save around two dollars per lien notice mailed. With 3,890 self storage facilities freckling the landscape of California, and ten lien notices sent out per month, the industry savings come to a staggering $1,867,200. That’s quite a lot of green!

Also changed were the regulations surrounding the “Declaration of Opposition” provision. In the past, lien disputes could only be settled in superior court, which often took a great deal of time and money. As it now stands, lien disputes can be settled in small claims court—a much faster and much more cost effective way to resolve disputes. Facilities and storage owners stand to benefit quite a lot from this change. Baseless disputes can be dismissed at a much faster pace, meaning that legal fees will not continue to pile up throughout long, drawn-out superior court battles. With estimated savings at nearly $2000 per store in California, the industry is looking forward to $7,780,000 in savings. Perhaps that last part merits some repeating: that’s nearly eight million dollars that the industry saves in attorney fees and lost rent.

When you crunch the numbers, you can see that California’s self storage community is set to save around $10 million through these two “common sense” changes. This leads me to a very obvious question: how, exactly, is all of this money going to be spent? Are we going to see these savings reinvested into properties? Might we begin to see single-property owners turn into multiple-property owners? Might we see the larger companies not only expanding their empires, but improving upon the properties that they already own? Are we going to see more advertisements hitting television, the internet, and our favorite magazines? Are these industry savings going to translate into savings for the consumer? Will these changes make tenants take their rent payments a bit more seriously?

Surely, the following weeks and months will resolve some of these questions for us. With any luck, we will find that both self storage owners and customers stand to benefit from these changes.

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Disclamer: This entry is intended to promote our partner StorageMart and some or all participants received compensation.

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