Bill Text: IA HSB186 | 2019-2020 | 88th General Assembly | Introduced


Bill Title: A bill for an act relating to self-service storage facilities, including the creation and enforcement of liens on personal property within leased spaces.

Spectrum: Committee Bill

Status: (N/A - Dead) 2019-03-05 - Committee report, recommending amendment and passage. H.J. 403. [HSB186 Detail]

Download: Iowa-2019-HSB186-Introduced.html
House Study Bill 186 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON COMMERCE BILL BY CHAIRPERSON CARLSON) A BILL FOR An Act relating to self-service storage facilities, including 1 the creation and enforcement of liens on personal property 2 within leased spaces. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 2392YC (2) 88 asf/jh
H.F. _____ Section 1. NEW SECTION . 578B.1 Short title. 1 This Act shall be known as the “Self-Service Storage 2 Facilities Act” . 3 Sec. 2. NEW SECTION . 578B.2 Definitions. 4 As used in this chapter, unless the context clearly requires 5 otherwise: 6 1. “Commercially reasonable sale” means a sale that is 7 conducted at the self-service storage facility, at the nearest 8 suitable place to where the personal property is held or 9 stored, or on a publicly accessible internet site that conducts 10 sales or auctions. 11 2. Default” means the failure by the occupant to perform on 12 time any obligation or duty set forth in a rental agreement or 13 this chapter. 14 3. “Emergency” means any sudden, unexpected occurrence 15 or circumstance at or near a self-service storage facility 16 that requires immediate action to avoid injury to persons 17 or property at or near the self-service storage facility, 18 including a fire. 19 4. “Last-known address” means the postal address or 20 electronic mail address provided by an occupant in a rental 21 agreement or the postal address or electronic mail address 22 provided by the occupant in a subsequent written notice of a 23 change of address. 24 5. “Late fee” means any fee or charge assessed for an 25 occupant’s failure to pay rent when due. “Late fee” does not 26 include interest on a debt, reasonable expenses incurred in 27 the collection of unpaid rent, or costs associated with the 28 enforcement of any other remedy provided by law or contract. 29 6. “Leased space” means individual storage space at a 30 self-service storage facility which is rented to an occupant 31 pursuant to a rental agreement. 32 7. “Occupant” means a person entitled to the use of leased 33 space at a self-service storage facility under a rental 34 agreement or the person’s successors or assigns. 35 -1- LSB 2392YC (2) 88 asf/jh 1/ 12
H.F. _____ 8. “Operator” means the owner, operator, lessor, or 1 sublessor of a self-service storage facility or an agent or any 2 other person authorized to manage the facility. “Operator” does 3 not include a warehouse worker if the warehouse worker issues a 4 warehouse receipt, bill of lading, or other document of title 5 for the personal property stored. 6 9. “Personal property” means movable property not affixed 7 to land, including goods, wares, merchandise, motor vehicles, 8 watercraft, household items, and furnishings. 9 10. “Property that has no commercial value” means property 10 offered for sale in a commercially reasonable sale that 11 receives no bid or offer. 12 11. “Rental agreement” means an agreement or lease, written 13 or oral, that establishes or modifies the terms, conditions, 14 or rules concerning the use and occupancy of leased space at a 15 self-service storage facility. 16 12. “Self-service storage facility” means real property 17 designed and used for the purpose of renting or leasing 18 individual storage space to occupants who are to have access 19 to the space for the purpose of storing personal property. If 20 an operator issues a warehouse receipt, bill of lading, or 21 other document of title for the personal property stored, the 22 operator and occupant are subject to chapter 554, article 7, 23 and this chapter does not apply. 24 13. “Verified mail” means any method of mailing offered by 25 the United States postal service or private delivery service 26 that provides evidence of the mailing. 27 Sec. 3. NEW SECTION . 578B.3 Facility not residence. 28 1. An operator shall not knowingly permit a leased space 29 at a self-service storage facility to be used for residential 30 purposes. 31 2. An occupant shall not use a leased space for residential 32 purposes. 33 Sec. 4. NEW SECTION . 578B.4 Notice and consent for 34 inspection and repair. 35 -2- LSB 2392YC (2) 88 asf/jh 2/ 12
H.F. _____ Unless otherwise provided in a rental agreement, an 1 occupant, upon reasonable request from the operator, shall 2 allow the operator to enter a leased space for the purpose of 3 inspection or repair. If an emergency occurs, an operator may 4 enter a leased space for inspection or repair without notice to 5 or consent from the occupant. 6 Sec. 5. NEW SECTION . 578B.5 Lien —— late fees. 7 1. The operator of a self-service storage facility and the 8 operator’s heirs, executors, administrators, successors, and 9 assigns shall have a lien upon all of an occupant’s personal 10 property located at the self-service storage facility for 11 delinquent rent, late fees, labor, or other charges incurred 12 pursuant to a rental agreement and for expenses incurred for 13 preservation, sale, or disposition of the personal property. 14 The lien established by this subsection shall have priority 15 over all other liens and security interests except for those 16 perfected prior to the time the personal property is brought to 17 the self-service storage facility. 18 2. The lien described in subsection 1 attaches on the date 19 on which personal property is brought to the self-service 20 storage facility. 21 3. If the rental agreement specifies a limit on the value 22 of personal property that the occupant may store in the leased 23 space, such limit shall be deemed to be the maximum value of 24 the personal property in the occupant’s leased space. 25 4. A rental agreement under this chapter may provide for a 26 reasonable late fee for failure of the occupant to timely make 27 payments for the leased space when due. A monthly late fee of 28 twenty dollars or twenty percent of the monthly rental amount, 29 whichever is greater, shall be reasonable and is not a penalty. 30 Sec. 6. NEW SECTION . 578B.6 Right to deny access due to 31 default. 32 If the occupant is in default, the operator shall have the 33 right to deny the occupant access to the leased space at the 34 self-service storage facility. 35 -3- LSB 2392YC (2) 88 asf/jh 3/ 12
H.F. _____ Sec. 7. NEW SECTION . 578B.7 Enforcement of lien. 1 1. If an occupant is in default for a period of at least 2 thirty days, the operator may enforce the lien granted in 3 section 578B.5 by selling the occupant’s personal property. 4 Sale of the occupant’s personal property may be by public or 5 private proceedings. Such personal property may be sold as a 6 unit or in parcels, by way of one or more contracts, at any time 7 or place, and on any terms as long as the sale is commercially 8 reasonable. The operator may otherwise dispose of any property 9 that has no commercial value. 10 2. Before conducting a sale under this section, the operator 11 shall do all of the following: 12 a. Send notice of default to the occupant by hand mail, 13 verified mail, or electronic mail pursuant to subsection 7. 14 The notice of default shall include all of the following: 15 (1) A statement of the operator’s claim showing that the 16 amount due at the time of the notice and the date when the 17 amount became due. 18 (2) A demand for payment of the charges due within a 19 specified time, which shall not be less than ten days after the 20 date of the notice. 21 (3) A statement that unless the claim is paid within the 22 time stated, the contents of the occupant’s leased space will 23 be sold or otherwise disposed of after a specified time. 24 (4) The name, street address, and telephone number of the 25 operator or a designated agent whom the occupant may contact to 26 respond to the notice. 27 b. At least seven days before the sale, advertise 28 the time, place, and terms of the sale in a commercially 29 reasonable manner. The manner of advertisement is deemed 30 commercially reasonable if it is likely to attract at least 31 three independent bidders to attend or view the sale in person 32 or online at the time and place advertised. The operator may 33 buy the occupant’s personal property at any public sale held 34 pursuant to this section. 35 -4- LSB 2392YC (2) 88 asf/jh 4/ 12
H.F. _____ 3. If the personal property subject to the operator’s lien 1 is a vehicle, watercraft, or trailer, and rent or other charges 2 remain due and unpaid for thirty days, the operator may have 3 the vehicle, watercraft, or trailer towed from the self-service 4 storage facility. The operator shall not be liable for any 5 damages to the vehicle, watercraft, or trailer once the tower 6 takes possession of the property. Removal of any vehicle, 7 watercraft, or trailer from the self-service storage facility 8 shall not release the operator’s lien. 9 4. At any time before a sale is held under this section or 10 before a vehicle, watercraft, or trailer is towed under this 11 section, the occupant may pay the amount necessary to satisfy 12 the lien and redeem the occupant’s personal property. 13 5. In the event of a sale under this section, the operator 14 may satisfy the lien from the proceeds of the sale, but shall 15 hold the balance, if any, for a period of ninety days for 16 delivery on demand to the occupant. If the occupant does not 17 claim the balance within ninety days, the balance shall be paid 18 to the county treasurer in the county where the self-service 19 storage facility is located. The county treasurer shall hold 20 the funds for a period of two years. If a claim is not made by 21 the owner of the fund, then the fund shall become the property 22 of the county. There shall be no further recourse by any 23 person against the operator for an action pursuant to this 24 section. 25 6. A purchaser in good faith of any personal property sold 26 to satisfy the lien takes the property free of any rights of 27 persons against whom the lien was valid, despite noncompliance 28 by the operator with the requirements of this chapter. The 29 purchaser of a motor vehicle shall apply for a new title to 30 the vehicle by the procedures outlined in section 321.47. For 31 all other property which has a written title, the purchaser 32 shall follow the applicable procedures for the property for the 33 transfer of title by operation of law. 34 7. Notice to the occupant under subsection 2, paragraph 35 -5- LSB 2392YC (2) 88 asf/jh 5/ 12
H.F. _____ “a” , shall be sent to the occupant’s last-known address by hand 1 delivery, verified mail, or electronic mail. Notices sent 2 by hand delivery shall be deemed delivered when the occupant 3 has signed an acknowledgment of delivery. Notices sent by 4 verified mail shall be deemed delivered when deposited with the 5 United States postal service or private delivery service if the 6 notices are properly addressed with postage prepaid. Notices 7 sent by electronic mail shall be deemed delivered when an 8 electronic mail is sent to the last-known address provided by 9 the occupant. If the operator sends notice by electronic mail 10 and receives an automated message stating that the electronic 11 mail cannot be delivered, the operator shall send notice by 12 hand delivery or by verified mail to the occupant’s last-known 13 address with postage prepaid. 14 8. If the operator complies with the requirements of this 15 section, the operator’s liability: 16 a. To the occupant, shall be limited to the net proceeds 17 received from the sale of the occupant’s personal property 18 less any proceeds paid to the holders of any lien or security 19 interest of record on the personal property being sold. 20 b. To the holders of any lien or security interest of record 21 on the personal property being sold, shall be limited to the 22 net proceeds received from the sale of the personal property 23 subject to the holder’s lien or security interest. 24 Sec. 8. NEW SECTION . 578B.8 Exclusive care, custody, and 25 control of personal property vested in occupant. 26 Unless the rental agreement specifically provides otherwise 27 and until a lien sale under section 578B.7, the exclusive care, 28 custody, and control of all personal property stored in a 29 leased space remains vested in the occupant. 30 Sec. 9. NEW SECTION . 578B.9 Supplemental nature of chapter. 31 This chapter does not impair the powers of the parties to a 32 rental agreement to create rights, duties, or obligations that 33 do not arise from this chapter. This chapter does not impair 34 or impact the rights of parties to create liens by special 35 -6- LSB 2392YC (2) 88 asf/jh 6/ 12
H.F. _____ contract or agreement, nor does it affect or impair other liens 1 arising at common law or in equity, or by a statute of this 2 state. The rights provided to an operator by this chapter are 3 in addition to all other rights provided by law to a creditor 4 against a debtor. 5 Sec. 10. Section 321.20, subsection 1, unnumbered paragraph 6 1, Code 2019, is amended to read as follows: 7 Except as provided in this chapter , an owner of a vehicle 8 subject to registration shall make application to the county 9 treasurer of the county of the owner’s residence, or if a 10 nonresident, to the county treasurer of the county where the 11 primary users of the vehicle are located, or if a lessor of 12 the vehicle pursuant to chapter 321F which vehicle has a 13 gross vehicle weight of less than ten thousand pounds, to the 14 county treasurer of the county of the lessee’s residence, 15 or if a firm, association, or corporation with vehicles in 16 multiple counties, the owner may make application to the county 17 treasurer of the county where the primary user of the vehicle 18 is located, for the registration and issuance of a certificate 19 of title for the vehicle upon the appropriate form furnished 20 by the department. However, upon the transfer of ownership, 21 the owner of a vehicle subject to the apportioned registration 22 provisions of chapter 326 shall make application for issuance 23 of a certificate of title to either the department or the 24 appropriate county treasurer. The owner of a vehicle purchased 25 pursuant to section 578B.7 shall present documentation that 26 such sale was completed in compliance with that section. The 27 application shall be accompanied by a fee of twenty dollars, 28 and shall bear the owner’s signature. A nonresident owner 29 of two or more vehicles subject to registration may make 30 application for registration and issuance of a certificate 31 of title for all vehicles subject to registration to the 32 county treasurer of the county where the primary user of any 33 of the vehicles is located. The owner of a mobile home or 34 manufactured home shall make application for a certificate 35 -7- LSB 2392YC (2) 88 asf/jh 7/ 12
H.F. _____ of title under this section from the county treasurer of the 1 county where the mobile home or manufactured home is located. 2 The application shall contain: 3 Sec. 11. Section 321.20A, subsection 1, Code 2019, is 4 amended to read as follows: 5 1. Notwithstanding other provisions of this chapter , 6 the owner of a commercial vehicle subject to the apportioned 7 registration provisions of chapter 326 may make application 8 to the department or the appropriate county treasurer 9 for a certificate of title. The owner of a commercial 10 vehicle purchased pursuant to section 578B.7 shall present 11 documentation that such sale was completed in compliance 12 with that section. The application for certificate of title 13 shall be made within thirty days of purchase or transfer and 14 shall be accompanied by a twenty dollar title fee and the 15 appropriate fee for new registration. The department or the 16 county treasurer shall deliver the certificate of title to the 17 owner if there is no security interest. If there is a security 18 interest, the title, when issued, shall be delivered to the 19 first secured party. Delivery may be made using electronic 20 means. 21 Sec. 12. Section 321.23, subsection 1, paragraph a, Code 22 2019, is amended to read as follows: 23 a. If the vehicle to be registered is a specially 24 constructed vehicle, reconstructed vehicle, street rod, replica 25 vehicle, or foreign vehicle, such fact shall be stated in the 26 application. A fee of ten dollars shall be paid by the person 27 making the application upon issuance of a certificate of title 28 by the county treasurer. For a specially constructed vehicle, 29 reconstructed vehicle, street rod, or replica vehicle subject 30 to registration, the application shall be accompanied by a 31 statement from the department authorizing the motor vehicle 32 to be titled and registered in this state. The owner of a 33 specially constructed vehicle, reconstructed vehicle, street 34 rod, replica vehicle, or foreign vehicle purchased pursuant to 35 -8- LSB 2392YC (2) 88 asf/jh 8/ 12
H.F. _____ section 578B.7 shall present documentation that such sale was 1 completed in compliance with that section. 2 Sec. 13. Section 321.47, subsection 1, Code 2019, is amended 3 to read as follows: 4 1. If ownership of a vehicle is transferred by operation of 5 law upon inheritance, devise or bequest, dissolution decree, 6 order in bankruptcy, insolvency, replevin, foreclosure or 7 execution sale, abandoned vehicle sale, or when the engine of a 8 motor vehicle is replaced by another engine, or a vehicle is 9 sold or transferred to satisfy an artisan’s lien as provided 10 in chapter 577 , a landlord’s lien as provided in chapter 570 , 11 a self-service storage facility lien as provided in section 12 578B.7, a storage lien as provided in chapter 579 , a judgment 13 in an action for abandonment of a manufactured or mobile home 14 as provided in chapter 555B , upon presentation of an affidavit 15 relating to the disposition of a valueless mobile, modular, or 16 manufactured home as provided in chapter 555C , or repossession 17 is had upon default in performance of the terms of a security 18 agreement, the county treasurer in the transferee’s county of 19 residence or, in the case of a mobile home or manufactured 20 home, the county treasurer of the county where the mobile home 21 or manufactured home is located, upon the surrender of the 22 prior certificate of title or the manufacturer’s or importer’s 23 certificate, or when that is not possible, upon presentation 24 of satisfactory proof to the county treasurer of ownership 25 and right of possession to the vehicle and upon payment of a 26 fee of twenty dollars and the presentation of an application 27 for registration and certificate of title, may issue to the 28 applicant a registration card for the vehicle and a certificate 29 of title to the vehicle. A person entitled to ownership of 30 a vehicle under a decree of dissolution shall surrender a 31 reproduction of a certified copy of the dissolution and upon 32 fulfilling the other requirements of this chapter is entitled 33 to a certificate of title and registration receipt issued in 34 the person’s name. 35 -9- LSB 2392YC (2) 88 asf/jh 9/ 12
H.F. _____ Sec. 14. Section 462A.77, Code 2019, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 10. The buyer of a vessel sold pursuant to 3 section 578B.7 shall present documentation that such sale was 4 completed in compliance with that section. 5 Sec. 15. Section 462A.82, subsection 1, Code 2019, is 6 amended to read as follows: 7 1. If ownership of a vessel is transferred by operation of 8 law, such as by inheritance, order in bankruptcy, insolvency, 9 replevin, or execution sale, or in compliance with section 10 578B.7, the transferee, within thirty days after acquiring the 11 right to possession of the vessel by operation of law, shall 12 mail or deliver to the county recorder satisfactory proof of 13 ownership as the county recorder requires, together with an 14 application for a new certificate of title, and the required 15 fee. A title tax is not required on these transactions. 16 Sec. 16. REPEAL. Chapter 578A, Code 2019, is repealed. 17 EXPLANATION 18 The inclusion of this explanation does not constitute agreement with 19 the explanation’s substance by the members of the general assembly. 20 This bill enacts a new Code chapter on self-service storage 21 facility liens and repeals the current Code chapter on the same 22 subject. 23 The bill provides definitions. Significant definitions are 24 as follows. “Leased space” means individual storage space at a 25 self-service storage facility which is rented to an occupant 26 pursuant to rental agreement. “Occupant” means a person 27 entitled to the use of leased space at a self-service storage 28 under a rental agreement or the person’s successors or assigns. 29 “Operator” means the owner, operator, lessor, or sublessor 30 of a self-service storage facility or an agent or any other 31 person authorized to manage the facility. “Operator” does 32 not include a warehouse worker if the warehouse worker issues 33 a warehouse receipt, bill of lading, or other document of 34 title for the personal property stored. “Self-service storage 35 -10- LSB 2392YC (2) 88 asf/jh 10/ 12
H.F. _____ facility” means real property designed and used for the purpose 1 of renting or leasing individual storage space to occupants 2 who are to have access to the space for the purpose of storing 3 personal property. If an operator issues a warehouse receipt, 4 bill of lading, or other document of title for the personal 5 property stored, the operator and occupant are subject to Code 6 chapter 554, article 7, and new Code chapter 578B does not 7 apply. 8 The bill provides that a leased space shall not be leased for 9 a residential purpose by an operator or used by an occupant for 10 a residential purpose. The bill provides that unless otherwise 11 provided in a rental agreement, upon reasonable request from 12 the operator, the occupant shall allow the operator to enter 13 the leased space for inspection and repair. However, during 14 an emergency, the operator may enter the leased space without 15 notice and consent from the occupant. 16 The bill provides that an operator shall have a lien on 17 an occupant’s personal property for delinquent rent, late 18 fees, labor, or other charges incurred pursuant to the rental 19 agreement and for expenses incurred for preservation, sale, or 20 disposition of the personal property. The bill provides that 21 the operator’s lien shall have priority over all other liens 22 and security interests except those perfected prior to the time 23 the personal property is brought to the self-service storage 24 facility. The bill provides that the lien attaches on the date 25 the personal property is brought to the self-service storage 26 facility. The bill provides that if the rental agreement 27 specifies a limit on the value of personal property that the 28 occupant may store in the leased space, such limit shall be 29 deemed to be the maximum value of the personal property in 30 the occupant’s leased space. The bill provides that a rental 31 agreement under the bill may provide for a reasonable late fee 32 for failure to make timely payments. The bill provides that 33 $20 or 20 percent of the monthly rental amount, whichever is 34 greater, shall be deemed reasonable and is not a penalty. 35 -11- LSB 2392YC (2) 88 asf/jh 11/ 12
H.F. _____ The bill provides that the operator may deny the occupant 1 access to the leased space if the occupant is in default. 2 The bill provides a process for enforcement of a lien, which 3 allows an operator to sell an occupant’s personal property if 4 an occupant has been in default for a period of at least 30 5 days and requires notices to be served on the occupant prior 6 to a commercially reasonable sale. Prior to the sale, the 7 occupant may satisfy the lien and redeem the personal property. 8 Additional details are provided in the bill. 9 The bill provides that the occupant has exclusive care, 10 custody, and control of personal property stored in leased 11 property until a lien sale, unless a rental agreement provides 12 otherwise. 13 The bill does not affect the ability of the parties to a 14 rental agreement to create rights, duties, and obligations 15 that do not arise from the bill. Furthermore, the bill does 16 not impair or impact the right of parties to create liens by 17 special contract or agreement, nor does the bill affect or 18 impair other liens arising at common law or in equity, or by a 19 statute of this state. Additionally, the bill provides that 20 the rights provided to the operator are in addition to the 21 rights provided to a creditor against a debtor by law. 22 The bill amends sections in Code chapter 321 (motor vehicles 23 and laws of the road) and Code chapter 462A (water navigation 24 regulations) to provide that the owner of a vehicle purchased 25 pursuant to new Code section 578B.7 shall present documentation 26 that such sale was completed in compliance with that Code 27 section which provided the process for lien enforcement. 28 -12- LSB 2392YC (2) 88 asf/jh 12/ 12
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