Governor Bel Edwards, signed into law Senate Bill 128 in late May,2016. This Bill made some very important changes to the self storage law in Louisiana. This blog is to discuss a summary of the most important changes, and is not to be construed as legal advice.
The biggest change in the Act, is the elimination of the requirement to both, mail the Default Notice via certified mail, return receipt requested, and to enclose a copy of the rental agreement with that Default Notice.
Both of these items are represented as extraordinary burden and expense to Louisiana self-storage Operators, which costs and expenses were added on to the Occupant’s, making it a burden for them as well. Under the Louisiana law, it is now permitted to send the Default Notice via verified First Class mail or email. The definition of verified mail is typical of many of the recently updated statutes from the Self Storage Association; meaning any method of mailing that is offered by the United States Postal Service or private delivery service which provides evidence of mailing. There is no proof of delivery requirement anymore in Louisiana, making email a possible option for sending Default Notices. The caveat to using email to serve default notices is that the email address must be provided by the Occupant in the rental agreement and then any updates must be provided via a written notice to the Operator. For various reasons, we do not recommend sending Default Notices by email alone at this time. Instead, we recommend sending email and via First Class with a certificate of mailing, for any Default Notice sent in Louisiana.
Another great change in the lien law is the inventory requirement. No longer is an inventory required in the Default Notice, it is still required in the advertisement, discussed below. Many of the other requirements for a Default Notice previously in the Statute, including the itemized statement of claim, are still required.
Another terrific change is that while advertising is still required and the length of time the advertising runs has not changed, advertising may now be placed on a publicly accessible website that conducts personal property auctions, in lieu of a newspaper. Please note what this requirement expresses. In some states, you may place your Notice of Sale advertisement on any publicly accessible website, including your own, Craigslist, or AuctionZip, as examples. In Louisiana, if you are not going to use the newspaper of general circulation, which is still an option, (and used to be the only option), an advertisement of sale is acceptable online, but only with companies that conduct personal property auctions as their business. This would of course include, AuctionZip, or any of the major online self storage lien sale sites such as, Ibid4Storage.com and StorageStuff.net, but does not include, for example, your own website or Craigslist. In the advertisement, unfortunately, you are still required to include an inventory just like the inventory which used to be required for the Default Notice, However, this does give Operators a longer time to prepare and cut locks, resulting in less lock cuts, and only for those units that have gone so far as to be almost ready for sale before obtaining an inventory. Please note the length of time an advertisement has to run is unchanged.
Likewise, sales no longer have to be conducted in person as auctions and can be conducted on publicly accessible websites that conduct personal property auctions. This is the same style of website described above as the replacement for advertising. An additional terrific change is that the Legislature has now granted the Operator permission to tow a motor vehicle, watercraft, or trailer in lieu of foreclosing the lien. In Louisiana, it had been difficult to get title to these types of vehicles in order to be able to properly sell them and many stored vehicles had liens on them, making it impossible to sell them, and you had few other options. Towing is now permitted by any tower licensed pursuant to the Louisiana Towing and Storage Act, once rent and other charges remain unpaid for sixty (60) days.
The other fantastic change is a safe harbor late fee provision, which is set at $20.00 or 20% of the monthly rent, whichever is greater. Now under the law in Louisiana, Operators do not have to worry that a judge may declare any late fee they charge, as potentially unreasonable As long as the Operator complies with the safe harbor provisions, charging one late fee per month, no more than the $20.00 or 20%, whichever is greater, the late fee is deemed reasonable by Law. The late fee is of course, in addition to rent, collection, or lien enforcement charges by an Operator which are charged as incurred.
Additionally, if your rental agreement contains a value limit, by the updated statute, that value limit is deemed to be the maximum value of property stored in the space and you are absolved of liability for claims in excess of such stated value. If you do not already have a value limit in your rental agreement, this is an excellent argument to immediately insert one and get that change properly circulated to your existing Occupants.
If you are a Louisiana client of our office, we will be reaching out to you to discuss making updates and changes to your rental agreement that are necessary to comply with this statute. If you read this blog and you are an Operator in Louisiana and wish to discuss of this any further with our office, please contact us at: firstname.lastname@example.org or 513-698-9350.