Jun 242019
 

West Virginia updated its formerly very difficult self-storage lien laws in March 2019. The effective date is July 1, 2019.

What a lien law modification this has been. It has taken one of the worst and most difficult lien laws and brought it close to compliance, with what may states have done with their lien laws over the last several years. This note does not constitute a full and complete list of all changes, but highlights several.

Effective July 1, 2019, West Virginia operators will be able to use Verified First Class Mail, i.e., First Class with Certificate of Mailing to send Default Notice(s) instead of Certified Mail. Also added was email for Default Notices, however, I continue to assert my reservations about use of email as the only method to serve Default Notices, as I will describe below.

While, you still cannot sell in West Virginia until the Occupant is in Default for more than 60 days, the law was clarified to state that the actions that lead up to the lien sale can all occur before the 60 day deadline. That is, a sale can be on Day 61, rather than beginning the lien sale process at Day 60, there was ambiguity under the current Statute.

The safe harbor late fee was changed to an amount not to exceed the greater of $20.00 or 20%. This is in line with most other states that have lien law modernizations.

Denial of Access had the number of days late removed, indicating, provided you put it in your Rental Agreement this way, you could deny gate access or overlock “upon Default” instead of waiting 15 days as under the previous requirements.

Advertising has also been dramatically changed to provide one advertisement now needs to be run at least 3 days prior to conducting the sale. The advertisement can now appear in a newspaper of general circulation in the jurisdiction where the sale is to be held, or by electronic mail, or on an
outline website.

The statute further recognizes the ability to conduct sales at online auction websites, or any other location reasonably determined, rather than being only at the Facility.

The statute also adds the language providing that if the Rental Agreement specifies a limit on the value of personal property that may be stored in the leased space, that limit is the maximum value of stored Personal Property.

Perhaps one of the best pieces of news is that the long and painful process of determining the fair market value of liened personal property and notifying the lienholders prior to sale has been removed, in place of which has been added the right to tow or remove a motor vehicle, trailer, or watercraft from the personal property if the Occupant is in Default for more than 60 days.

The statute changes will require changes in the actual text of most Rental Agreements, particularly as it relates to notifying the Occupant within the Rental Agreement about the ability to tow, and the new information about the location of advertising for a lien sale. Additionally, if you want to send Default Notices by electronic mail only, you must add language to that effect in bold type, where you will seek affirmative consent, (specifically Occupant’s initials next to a statement), indicating that notice of Default may be given by email or text only.

My concern with email or text default notice is a requirement that if the Owner sends Default Notices by email or text, that the Owner must receive a “response, return receipt, or confirmation of delivery” (with no reference to any time frame) and if you do not receive the required “proof”, then you have to send the notice by hand delivery or verified mail. It still seems simpler to me, to spend the $1.00 on First Class mail with a Certificate of Mailing in the first place.

Gone from the Statute, among other things, are definitions of the primary and secondary address; and all of the awful language instructing you on how to notify a secured lienholder; Greatly reduced is the description of the requirements in order to determine if property can be disposed of, rather than sold; and perhaps most happily for me, gone is the requirement that prior to sale or destruction, you would have had to prepare a detailed inventory of the personal property and maintain such inventory for 2 years.

One thing that did not change, is the actual definition of what makes up part of the lien in West Virginia, which is “agreed rent, labor, late fees, and other charges and expenses reasonably incurred in its sale or disposition”. The West Virginia Attorney General has previously taken the position that anything that falls outside of this list, for example, NSF charges, damages to the Space or the Facility, and the like, are not part of your lien and thus, to withhold money from a sale, or to enforce a lien based upon those types of charges, is a violation of the West Virginia law.

If you are a client of this office, it is time to review your Rental Agreement, at a minimum, certain language changes must be made to the Rental Agreement to bring it into compliance for July. More than anything, your lien sale procedures and protocols will be changing. As always, the above article represents the opinion of its author and should not be construed as legal advice. Any changes you wish to make to your Rental Agreement or lien sale protocols,
should be done in consultation with your own attorney. However, Congratulations to the West Virginia Operators. Your statute has gone from one of the worst to one of the best practically overnight.

Jeffrey J. Greenberger is a Partner with the law firm of Greenberger & Brewer, LLP, in Cincinnati, Ohio and is licensed to practice in the states of Ohio and Kentucky. Mr. Greenberger’s practice focuses primarily on representing the owners and operators of commercial real estate, including self-storage owners and operators.

This is an advertisement sponsored by the Cincinnati, Ohio Law Firm of Greenberger & Brewer, LLC who is solely responsible for its content.

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