Colorado Might Join Ranks of States With More Lax Self Storage Lien Laws

Posted on Jan 27 2011 - 7:28am by John Stevens

Colorado could join states like California and Nevada when it comes to more relaxed lien laws for self storage auctions. Coming up on Jan. 31, the first senate hearing on a Colorado bill to modernize the state’s self storage lien law will be held. The Colorado Self Storage Association (CoSSA) along with financial backing from the national Self Storage Association (SSA), introduced the bill in mid January and representatives from each association will testify at the hearing.

Under the new bill, SB 11-039, self storage operators would be given more lax options for lien sale notifications to customers. Dubbed, “A Bill for an Act Concerning the Consequences of Default in Payments Due for Storage of Personal Property in a Self-Storage Facility,” it involves eliminating the newspaper advertising notification requirement and allows lien sales to be advertised in a “commercially reasonable” manner. Operators could use e-mail and verified mail for notification instead of the more costly Certified Mail requirement. CoSSA, which hired lobbyist firm Colorado Communiqué, believes the proposed law would create a more stream-lined and less expensive lien-sale process. The bill is sponsored by Senator Lois Tochtrop and House Representative Tom Massey. The current self-storage lien law in Colorado, Section 38-21.5, was enacted in the 1980s.

Lien Laws are already more lax in California and Nevada which is why storage auction shows like A&E’s Storage Wars are filmed mostly in these states. This past summer, the California Senate Judiciary Committee voted to modify the state’s self storage lien law that relaxes notification requirements allowing delivery via Certificate of Mailing rather than the expensive previous method of Certified Mail. The law has saved California self storage operators much money. Also, facility operators have the option of filing in small claims court rather than the more costly superior court system. Because of these lax systems, storage units can be auctioned off faster due to less paperwork and delays in courts. This attracts the storage auction shows looking for fast turnover by shooting in close-by locations, rather than spending extra money on traveling.

With the ease by which California, Nevada and possibly Colorado can obtain ownership over a storage unit makes some other state governments look overbearing. In Connecticut, for instance, part of the process includes the owner of a storage facility notifying the occupant “and any person who has filed a valid security interest in such property” with the Secretary of State of his intention to satisfy the lien with a written notice which shall be delivered in person or sent by registered or Certified Mail, return receipt requested, to the last known address of the occupant.

Sources Used:

“New Self-Storage Lien Law Bill Introduced to Colorado 68th General Assembly.” Inside Self-Storage. Jan. 26, 2011.

Hsiu, Winnie. “Storage Unit Lien Laws in California and Nevada Integral Part of Storage Auction Shows’ Success. Self Storage Industry News. Dec. 22, 2010.