Updated Self-Storage Lien Laws Signed by Governors in Indiana, Michigan

Update 4/8/14 – The governors of Indiana and Michigan signed updated self-storage lien laws last month, enacting new measures that change the administering of the lien-law process for facility operators in those states.

Indiana Gov. Mike Pence signed HB 1385 on March 25. The new law enables the use of e-mail for delinquency notifications, advertising for auctions by “commercially reasonable” means other than the local newspaper, limitations on the value of store goods, and other provisions.

Michigan Gov. Rick Snyder signed HB 4484 on March 27. The new law enables self-storage operators to impose monthly late fees equal to the greater of $20 or 20 percent of monthly rent, limitations on the value of stored property, towing of motor vehicles after delinquency exceeds 60 days, and other provisions.

3/27/14 – Updated self-storage lien laws in Indiana and Michigan have passed through their respective legislatures and are awaiting governor signatures. If signed, both measures will change the administering of the lien-law process for self-storage operators in those states.

In Indiana, House Bill 1385 eliminates the need to use Certified Mail for tenant notifications, adding definitions for “verified mail” and enabling the use of e-mail. Supported by the Indiana Self Storage Association and the national Self Storage Association (SSA), the bill also enables operators to advertise lien sales by “commercially reasonable” means other than the local newspaper. As long as three independent bidders attend the auction, the manner of advertising would be deemed commercially reasonable. The measure would also make online auctions permissible.

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, including boats, and would enable operators to have vehicles belonging to delinquent tenants towed.

In Michigan, House Bill 4484 enables self-storage operators to impose monthly late fees of $20 or 20 percent of monthly rent, whichever is greater. It also allows limitations on the value of stored property and includes a protection from liability if personal identification or confidential information is disposed or sold during an auction. Supported by the Michigan Self Storage Association and SSA, the measure also eliminates the requirement for operators to obtain an affidavit specifying how and when a default notice was sent to a tenant.

The measure also addresses motor vehicles, including boats, and would enable operators to have vehicles towed after delinquency exceeds 60 days. The approved bill was sent to Gov. Rick Snyder on March 25.

In its weekly e-mail newsletter, the SSA said it is actively seeking lien-law updates in 12 states and tenant-insurance statutes in seven states.