Existing law, the California Self-Service Storage Facility Act, specifies remedies and procedures for self-service storage facility owners when occupants are delinquent in paying rent or other charges, including through enforcement of a lien by the sale of the stored property.

Existing law requires that, where personal property remains on the premises after a tenancy has terminated and the premises have been vacated by the tenant, the landlord give written notice to the tenant or any other person the landlord reasonably believes is the owner of the property, as specified. Existing law requires the property to be sold at public sale by competitive bidding if the property is not released to the former tenant. Existing law makes these provisions generally applicable to self-storage units.

This bill would enact similar provisions specifically applicable to personal property that remains at a self-service storage facility after the rental agreement has ended. Specifically, the bill would require the owner of the facility to give written notice to the occupant prior to the termination or non-renewal of the rental agreement, as specified. If personal property remains at the self-service storage facility after the rental agreement has ended, the bill would also require the owner to give written notice to the former occupant, and would set forth a notice form that would be in compliance with the requirement to notify the former occupant of abandoned property. The bill would require the owner to release the personal property to the former occupant under specified circumstances and subject to certain charges, as specified. The bill would require that the property be sold at public sale by competitive bidding if the property is not released to the former occupant. The bill would also specify that the above-described existing law shall apply to self-storage units only to the extent that it is not in conflict with this bill.

Existing law authorizes a landlord to, upon giving notice in writing to the tenant in a prescribed manner, change the terms of a week to week lease, a month to month lease, or other lease with a period less than a month, as specified. Existing law provides that the notice, when served upon the tenant, shall in and of itself create and establish the terms, rents, and conditions specified in the notice as a part of the lease, if the tenant shall continue to hold the premises after the notice takes effect.

This bill would, similarly, authorize the owner of a self-service storage facility to upon giving notice in writing to the occupant in prescribed manner, change the terms of a self-service storage facility rental agreement. The bill would provide that the notice, upon the expiration of a period of at least 30 days from the date of service, shall in and of itself create and establish the terms, rents, and conditions specified in the notice as a part of the rental agreement, if the occupant continues to store personal property at the self-service storage facility after the notice takes effect.

Existing law, the California Self-Service Storage Facility Act, specifies remedies and procedures for self-service storage facility owners when occupants are delinquent in paying rent or other charges, including through enforcement of a lien by the sale of the stored property.

Existing law requires that, where personal property remains on the premises after a tenancy has terminated and the premises have been vacated by the tenant, the landlord give written notice to the tenant or any other person the landlord reasonably believes is the owner of the property, as specified. Existing law requires the property to be sold at public sale by competitive bidding if the property is not released to the former tenant. Existing law makes these provisions generally applicable to self-storage units.

This bill would enact similar provisions specifically applicable to personal property that remains at a self-service storage facility after the rental agreement has ended. Specifically, the bill would require the owner of the facility to give written notice to the occupant prior to the termination or non-renewal of the rental agreement, as specified. If personal property remains at the self-service storage facility after the rental agreement has ended, the bill would also require the owner to give written notice to the former occupant, and would set forth a notice form that would be in compliance with the requirement to notify the former occupant of abandoned property. The bill would require the owner to release the personal property to the former occupant under specified circumstances and subject to certain charges, as specified. The bill would require that the property be sold at public sale by competitive bidding if the property is not released to the former occupant. The bill would also specify that the above-described existing law shall apply to self-storage units only to the extent that it is not in conflict with this bill.

Existing law authorizes a landlord to, upon giving notice in writing to the tenant in a prescribed manner, change the terms of a week to week lease, a month to month lease, or other lease with a period less than a month, as specified. Existing law provides that the notice, when served upon the tenant, shall in and of itself create and establish the terms, rents, and conditions specified in the notice as a part of the lease, if the tenant shall continue to hold the premises after the notice takes effect.

This bill would, similarly, authorize the owner of a self-service storage facility to upon giving notice in writing to the occupant in prescribed manner, change the terms of a self-service storage facility rental agreement. The bill would provide that the notice, upon the expiration of a period of at least 30 days from the date of service, shall in and of itself create and establish the terms, rents, and conditions specified in the notice as a part of the rental agreement, if the occupant continues to store personal property at the self-service storage facility after the notice takes effect.

Existing law, the California Self-Service Storage Facility Act, specifies remedies and procedures for self-service storage facility owners when occupants are delinquent in paying rent or other charges, including through enforcement of a lien by the sale of the stored property.

Existing law requires that, where personal property remains on the premises after a tenancy has terminated and the premises have been vacated by the tenant, the landlord give written notice to the tenant or any other person the landlord reasonably believes is the owner of the property, as specified. Existing law requires the property to be sold at public sale by competitive bidding if the property is not released to the former tenant. Existing law makes these provisions generally applicable to self-storage units.

This bill would enact similar provisions specifically applicable to personal property that remains at a self-service storage facility after the rental agreement has ended. The Specifically, the bill would require the owner of the facility to give written notice to the occupant prior to the termination or non-renewal of the rental agreement, as specified. If personal property remains at the self-service storage facility after the rental agreement has ended, the bill would also require the owner to give written notice to the former occupant, and would set forth a notice form that would be in compliance with this notice requirement. the requirement to notify the former occupant of abandoned property. The bill would require the owner to release the personal property to the former occupant under specified circumstances and subject to certain charges, as specified. The bill would require that the property be sold at public sale by competitive bidding if the property is not released to the former occupant. The bill would also specify that the above-described existing law shall apply to self-storage units only to the extent that it is not in conflict with this bill.

Existing law authorizes a landlord to, upon giving notice in writing to the tenant in a prescribed manner, change the terms of a week to week lease, a month to month lease, or other lease with a period less than a month, as specified. Existing law provides that the notice, when served upon the tenant, shall in and of itself create and establish the terms, rents, and conditions specified in the notice as a part of the lease, if the tenant shall continue to hold the premises after the notice takes effect.

This bill would, similarly, authorize the owner of a self-service storage facility to upon giving notice in writing to the occupant in prescribed manner, change the terms of a self-service storage facility rental agreement. The bill would provide that the notice, upon the expiration of a period of at least 30 days from the date of service, shall in and of itself create and establish the terms, rents, and conditions specified in the notice as a part of the rental agreement, if the occupant continues to store personal property at the self-service storage facility after the notice takes effect.

Existing law, the California Self-Service Storage Facility Act, specifies remedies and procedures for self-service storage facility owners when occupants are delinquent in paying rent or other charges, including through enforcement of a lien by the sale of the stored property.

Existing law requires that, where personal property remains on the premises after a tenancy has terminated and the premises have been vacated by the tenant, the landlord give written notice to the tenant or any other person the landlord reasonably believes is the owner of the property, as specified. Existing law requires the property to be sold at public sale by competitive bidding if the property is not released to the former tenant. Existing law makes these provisions generally applicable to self-storage units.

This bill would enact similar provisions specifically applicable to personal property that remains at a self-service storage facility after the rental agreement has ended. The bill would require the owner of the facility to give written notice to the former occupant, and would set forth a notice form that would be in compliance with this notice requirement. The bill would require the owner to release the personal property to the former occupant under specified circumstances and subject to certain charges, as specified. The bill would require that the property be sold at public sale by competitive bidding if the property is not released to the former occupant. The bill would also specify that the above-described existing law shall apply to self-storage units only to the extent that it is not in conflict with this bill.

Existing law authorizes a landlord to, upon giving notice in writing to the tenant in a prescribed manner, change the terms of a week to week lease, a month to month lease, or other lease with a period less than a month, as specified. Existing law provides that the notice, when served upon the tenant, shall in and of itself create and establish the terms, rents, and conditions specified in the notice as a part of the lease, if the tenant shall continue to hold the premises after the notice takes effect.

This bill would, similarly, authorize the owner of a self-service storage facility to upon giving notice in writing to the occupant in prescribed manner, change the terms of a self-service storage facility rental agreement. The bill would provide that the notice, upon the expiration of a period of at least 30 days from the date of service, shall in and of itself create and establish the terms, rents, and conditions specified in the notice as a part of the rental agreement, if the occupant continues to store personal property at the self-service storage facility after the notice takes effect.

Existing law, the California Self-Service Storage Facility Act, specifies remedies and procedures for self-service storage facility owners when occupants are delinquent in paying rent or other charges, including through enforcement of a lien by the sale of the stored property.

Existing law requires that, where personal property remains on the premises after a tenancy has terminated and the premises have been vacated by the tenant, the landlord give written notice to the tenant or any other person the landlord reasonably believes is the owner of the property, as specified. Existing law requires the property to be sold at public sale by competitive bidding if the property is not released to the former tenant. Existing law makes these provisions generally applicable to self-storage units.

This bill would enact similar provisions specifically applicable to personal property that remains at a self-service storage facility after the rental agreement has ended. The bill would require the owner of the facility to give written notice to the former occupant, and would set forth a notice form that would be in compliance with this notice requirement. The bill would require that the property be sold at public sale by competitive bidding if the property is not released to the former occupant. The bill would also specify that the above-described existing law shall apply to self-storage units only to the extent that it is not in conflict with this bill.

Existing law authorizes a landlord to, upon giving notice in writing to the tenant in prescribed manner, change the terms of a week to week lease, a month to month lease, or other lease with a period less than a month, as specified. Existing law provides that the notice, when served upon the tenant, shall in and of itself create and establish the terms, rents, and conditions specified in the notice as a part of the lease, if the tenant shall continue to hold the premises after the notice takes effect.

This bill would, similarly, authorize the owner of a self-service storage facility to upon giving notice in writing to the occupant in prescribed manner, change the terms of a self-service storage facility rental agreement. The bill would provide that the notice, upon the expiration of a period of at least 30 days from the date of service, shall in and of itself create and establish the terms, rents, and conditions specified in the notice as a part of the rental agreement, if the occupant continues to store personal property at the self-service storage facility after the notice takes effect.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 1916

Author:(Maienschein)

As Amended Ver:June 6, 2024

Majority vote

SUMMARY

Amends the Self-Storage Facility Act to include provisions addressing the disposition of abandoned property at the end of a rental agreement and the requirements for updating rental agreements.

Major Provisions

1. Requires the owner of a self-service storage facility to give notice to a former occupant of any personal property remaining at the facility after the rental agreement has ended.
2. Provides that the notice required in 1), above:

a) Contain a description of the property in a manner reasonably adequate to allow the former occupant to identify it;

b) Include information about where the property may be claimed, the date before which the claim must be made, and notice that rent may be charged before the property is returned;

c) Be personally delivered, mailed class mail, or electronically mailed;

d) Be dated not less than 15 days after the notice is personally delivered or emailed (if mailed, then not less than 18 days after being placed in the mail);

e) Include a statement informing the former occupant that, if not reclaimed, their property will either be:

i) Sold at a public sale, with the proceeds used to pay rent and costs of advertising, the remaining money paid to the county, which can then be claimed by the prior owner, or;

ii) Kept, sold, destroyed or otherwise disposed of because it is believed to be worth less than $300.

3) Provides a template for the “notice of right to reclaim abandoned property” required in 1), above.

4) Requires the owner of a self-service storage facility to leave the remaining personal property at the self-service storage facility or store in a place of safekeeping until the remaining property is either released or disposed of.

5) Requires the owner of a self-service storage facility to exercise reasonable care in storing the remaining property as described in 4), above.

6) Establishes that the owner of a self-service storage facility is not liable for any loss in storing the remaining property as described in 4), above, not caused by the owner’s deliberate or negligent act.

7) Requires the owner of a self-service storage facility to release the remaining property to the former occupant if the former occupant claims it on or before the date specified in the notice as provided in 2d), above.

8) Establishes that if the former occupant does not claim the property prior to the noticed date provided in 2d), above, the owner of a self-service storage facility shall nevertheless release it to the former occupant if the former occupant claims it prior to the time it is sold or disposed of, and pays the rent and reasonable costs of advertising and sale incurred prior to the time the property is released to the former occupant.

9) Establishes that if the former occupant claims the property within two days of termination of the rental agreement, the owner must release the personal property and not require the former occupant to pay the cost of storage incurred after the lease was terminated.

10) Establishes that if the remaining property is not claimed by the former occupant as provided in 7)-9), above, it must either be sold at a public sale or, if the owner reasonably believes the remaining property is worth less than $300, may be kept, sold, destroyed, or otherwise disposed of.

10) Confirms that the former occupant or self-service storage facility owner may bid on any remaining items at a public sale, if one takes place.

11) Requires that the advertisement of sale is consistent with the requirements specified in existing law.

12) Requires the owner to hold a public sale with competitive bidding for unclaimed personal property left by a former occupant if the value of the property is believed to be worth $300 or more.

13) Permits the owner to deduct the rent associated with storing the abandoned property and costs of advertising and sale from the proceeds of the public sale, with the balance paid to the county as unclaimed property within 30 days of the date of the public sale.

14) Limits the county’s liability for compliance with 13), above.

15) Allows the owner to change the terms of the lease agreement no fewer than 30 days after providing notice, as required by law.

16) Establishes that after the 30 day period, the terms, rents, and conditions specified in the notice become part of the operative lease agreement so long as the occupant continues to store personal property at the facility.

17) Requires the owner of a self-service storage facility to give the occupant of a self-storage unit written notice prior to the termination or nonrenewal of the rental agreement.

18) Provides that the notice required in 17), above, include a statement that the occupant may minimize the costs of storage by claiming any property remaining at the self-service storage facility within two days after the end of the rental agreement, and that the property may be sold, kept, destroyed, or disposed of if it is not claimed within the time period provided in 2d), above.

Senate Amendments

Add a notice provision informing a self-storage unit occupant prior to the termination of their rental agreement of their ability to minimize storage costs, as provided.

COMMENTS

This bill, sponsored by the Self Storage Association and the California Self Storage Association, seeks to resolve uncertainty in the California Self-Storage Facilities Act (the Act) relating to the disposition of abandoned property and the requirements for updating rental agreements.

The California Self-Storage Facility Act has extensive procedures governing liens placed on property for unpaid storage fees. The Act, set forth in Business and Professions Code Sections 21700-21716, is the principal law regulating the relationship between the owners of self-storage facilities and the occupants of self-storage units within those facilities. One of the Act’s most important aspects is its specification of the owner’s rights to dispose of an occupant’s stored personal property if the occupant fails to timely pay storage fees, including rent. Under the Act, the owner has a right to place a lien on the occupant’s personal property as security for unpaid storage fees. However, the lien does not attach (become legally enforceable) unless the owner follows statutory procedures meant to ensure that the occupant has notice of the lien, any lien sale, and an opportunity to oppose the lien sale. The Act, although extensive in its procedures on a variety of consumer disclosures and protections, is silent on two issues that this bill seeks to address. First, how to handle property left at the storage unit after the lease has ended and the occupant has paid in full. And second, the effect of an unsigned amended lease agreement.

This bill establishes procedures for abandoned property left at a storage unit where storage fees have been paid and the lease agreement has ended. In 2020, California had approximately 3,728 self-storage facilities. (Statista, https://www.statista.com/statistics/1092129/self-storage-facilities-state-usa/ (last visited Mar. 1, 2024).) According to a survey of 10,000 storage unit facilities, the average number of storage units per facility was 546. (ProjectionHub, https://www.projectionhub.com/post/how-to-start-a-self-storage-unit-facility (last visited Mar. 1, 2024).) This translates into millions of units across the state, affecting many Californians. Most occupants pay on time and in full and therefore the procedures in place for lien sales are not implicated, but according to proponents of this measure, additional clarity and certainty is warranted for dealing with abandoned property when the occupant has paid in full.

This bill largely mirrors the process set forth for abandoned property in rental dwellings. It requires notice, provides a time period for the former occupant to retrieve the property without incurring any additional expenses, and establishes procedures for when and how a public sale of the property might occur, along with how the former occupant can collect remaining proceeds, if any. The general timeline and procedures contemplated by this bill is as follows:

1. Day 1: Lease ends, occupant has paid in full, but some property has been left in the unit.
2. Day 1: Self-storage owner provides former occupant with notice:
   1. Describing the abandoned property
   2. Containing information about where the property may be claimed and the date by which it must be claimed.
3. Day 1 + 2 days: Former occupant may retrieve abandoned property without incurring any costs.
4. Day 1+15 (18 if mailed): Final day to retrieve property before occupant disposes (or publicly sells, if valued at $300 or more). Former occupant is responsible for any sale or storage costs incurred during this time period.
5. If a public sale occurs, proceeds minus costs deposited as unclaimed property with the county where sale occurred.
6. Former occupant is entitled to collect unclaimed property, if any, from county.

Existing law sets the threshold as $700 for personal property abandoned at the end of a residential lease. This bill’s threshold for property abandoned at a self-storage unit is $300. This lower threshold is warranted because the value of items left in storage facilities is usually low. By lowering the amount, it increases the likelihood that a public sale occurs and the former occupant may receive excess proceeds.

This bill establishes a process for changing the terms of self-service storage rental agreements. Most self-storage rental agreements are month-to-month. The Act is currently silent on the process for changing the terms of a rental agreement. This bill establishes a process whereby the owner is required to provide the tenant with at least 30 days between service of the notice modifying the terms and the effective date of those terms. The terms would be binding on the tenant if the tenant continued to store personal property after the effective date of the modified terms.

According to the Author

By revising the California Self-Service Storage Facilities Act, AB 1916 aims to establish standardized procedures for handling abandoned property and modifying rental agreements within the self-storage industry. This not only ensures clarity and consistency for operators but also upholds essential consumer safeguards, fostering transparency and accountability for all parties involved.

Arguments in Support

The Self Storage Association and the California Self Storage Association, sponsors of this measure, argue that AB 1916 would resolve uncertainty under existing law:

AB 1916 uses two existing provisions in the Civil Code as a model to resolve the uncertainty in the Act. First, existing provisions of the Civil Code (CC 1983, et seq.) set forth a process for addressing property abandoned by occupants at the end of a lease term. AB 1916 simply mirrors many of the key provisions from current law, but tailors the proposal to self storage rentals and includes it in the Act.Also, it should be noted that this proposed process for abandoned property is similar to the Act’s existing process when an occupant fails to pay rent and the owner must enforce its lien rights. Importantly, the process maintains key consumer protections including notice to the occupant and any alternative contact identified in the rental agreement, an opportunity to remove their property within a specified time, and, if applicable, return to the occupant of any excess proceeds from the sale.

Arguments in Opposition

No opposition on file.

FISCAL COMMENTS

None.

VOTES:

ASM JUDICIARY: 10-0-2

YES: Kalra, Dixon, Bauer-Kahan, Bryan, Connolly, Maienschein, McKinnor, Pacheco, Reyes, Sanchez

ABS, ABST OR NV: Haney, Waldron

ASSEMBLY FLOOR: 74-0-6

YES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Juan Carrillo, Wendy Carrillo, Cervantes, Chen, Connolly, Davies, Dixon, Essayli, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Low, Lowenthal, Maienschein, Mathis, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Rendon, Reyes, Luz Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

ABS, ABST OR NV: Calderon, Megan Dahle, Hart, Lee, Ramos, Soria

SENATE FLOOR: 37-0-3

YES: Allen, Archuleta, Ashby, Atkins, Becker, Blakespear, Bradford, Caballero, Cortese, Dahle, Dodd, Durazo, Eggman, Glazer, Gonzalez, Grove, Hurtado, Jones, Laird, McGuire, Menjivar, Min, Newman, Nguyen, Niello, Ochoa Bogh, Padilla, Portantino, Roth, Rubio, Seyarto, Skinner, Smallwood-Cuevas, Umberg, Wahab, Wiener, Wilk

ABS, ABST OR NV: Alvarado-Gil, Limón, Stern

UPDATED

VERSION: June 6, 2024

CONSULTANT: Shiran Zohar / JUD. / (916) 319-2334 FN: 0003537

 CONSENT  

Bill No: AB 1916

Author: Maienschein (D)

Amended: 6/6/24 in Senate

Vote: 21

SENATE JUDICIARY COMMITTEE: 11-0, 6/4/24

AYES: Umberg, Wilk, Ashby, Caballero, Durazo, Laird, Niello, Roth, Stern, Wahab, Wiener

ASSEMBLY FLOOR: 74-0, 3/18/24 (Consent) - See last page for vote

SUBJECT: Self-service storage facilities: abandoned personal property

SOURCE: California Self Storage Association

Self Storage Association

DIGEST:

This bill creates a process through which a self storage facility may sell or dispose of personal property left by a renter at a self storage facility after the rental agreement for a self storage unit ends, and creates a process by which a self storage facility may change the terms of a rental agreement, as specified.

ANALYSIS:

Existing law:

1. Establishes the California Self Storage Facilities Act to regulate the rental agreements between a self storage facility and a renter of a storage unit, specify how a self storage facility may sell a renter’s personal property for non-payment of rent and other charges, and specify limits on allowable late payment fees and other rules regarding self storage facilities. (Business and Professions (Bus. & Prof.) Code § 21700 et seq.)
2. Specifies that an owner of a self storage facility or their heirs or successors hold a lien on a renter’s personal property located in a storage unit, for the purposes of recovering any owed rent payments, labor costs, late payment fees, expenses for holding and disposing of the property, or other charges incurred pursuant to the rental agreement. (Bus. & Prof. Code § 21702)
3. Provides that each contract for the rental or lease of individual storage space requires a statement that the occupant’s property will be subject to a claim of lien and may even be sold to satisfy the lien if the rent or other charges due remain unpaid for 14 consecutive days. (Bus. & Prof. Code § 21712 (a))
4. Requires every contract for the rental or lease of individual storage space in a self-service storage facility to be in writing and to contain a statement that the occupant’s property will be subject to a claim of lien and may even be sold to satisfy the lien if the rent or other charges due remain unpaid for 14 consecutive days. (Bus. & Prof. Code § 21712 (a))
5. Provides that a self storage facility may terminate a renter’s right to use the storage unit if rent or other charges remain unpaid after 14 consecutive days, the facility sends the renter a specified notice of the delinquent payments and the timeline by which the facility may deny the renter access to the unit and sell the contents, and the owed charges are not paid within 14 days of the mailing of the notice. (Bus. & Prof. Code §§ 21703-21705)
   1. Provides that, at the end of the 14 day period after the initial notice is mailed to the renter, the lien attaches, and the facility may deny the renter access to the unit, and the owner of the facility may enter the unit and remove any property to a place for safekeeping, if the rent remains unpaid. (Bus. & Prof. Code § 21705)
   2. Specifies that, once the owner of the facility has taken those actions, they must mail the renter a blank declaration of opposition to the lien sale and a notice of lien sale that states, among other things, that the property in the unit may be sold after a specified date not less than 14 days from the mailing of the lien sale notice. (Bus. & Prof. Code § 21705(b))
6. Specifies that, if a declaration of opposition to the lien sale is not received by the owner of the facility, or is withdrawn, before the specified date in the notice of lien sale, the owner may sell the renter’s property. (Bus. & Prof. Code § 21706)
7. States that, if a declaration of opposition to the lien sale is received, the owner of the facility may only enforce the lien through civil court or a small claims court. (Bus. & Prof. Code § 21710)
8. Specifies that, for the process of selling property after expiration of the time in the notice of lien pursuant to Business and Professions Code Section 21705, an advertisement of sale must be published before the sale in either of the following ways: by once per week for two consecutive weeks in a newspaper of general circulation published in the public notice district where the sale is to be held, or in the county where the self-service storage facility is located; once in a newspaper of general circulation published in the public notice district where the sale is to be held or in the county where the self-service storage facility is located and once on any publicly accessible internet website that customarily conducts or advertises online auctions or sales, on which the advertisement must remain for at least seven days. If there is no newspaper of general circulation published in the public notice district where the sale is to be held or the county where the self-storage facility is located, requires the advertisement be posted at least 10 days before the sale in at least six conspicuous places in the neighborhood of the proposed sale. (Bus. & Prof Code § 21707)
9. Specifies that, minus the amount of the lien and costs of the sale, the owner must retain the excess proceeds of the sale on the occupant’s behalf, to be claimed by the occupant or other person within one year of the sale, after which the remaining proceeds must be paid to the treasury of the county in which the sale was held. (Id.)
10. Provides that the required notices, as specified, may be sent to the occupant at their provided electronic mail address only if: the rental agreement states that lien notices may be sent to the occupant and the alternate address by electronic mail; the occupant provides a written signature on the rental agreement consenting to receive lien notices by electronic mail. (Bus. & Prof. Code § 21712(c))
11. Requires the landlord, when personal property has been left behind after termination of a tenancy, to provide written notice to the former tenant of their right to reclaim the abandoned property for at least 15 days after the notice is personally delivered, or 18 days after deposit if mailed. (Civil (Civ.) Code § 1983)
12. Requires the above notice to inform the tenant whether the landlord intends to hold a public sale for the property, or intends to keep or dispose of the property because it is believed to be worth less than $700 if it is not claimed within the time specified. (Civ. Code § 1984)
13. Requires the landlord to release the personal property to the former tenant or, at the landlord’s option, to any person reasonably believed by the landlord to be its owner, if such tenant or other person pays the reasonable cost of storage and takes possession of the property not later than the date specified in the required notice of remaining property. Specifies that the landlord must release the personal property to the tenant or owner after the specified date in the notice if the tenant or owner pays the reasonable costs of storage and any reasonable costs for the sale incurred up to the point of claim, if the property is claimed before it is sold or otherwise disposed of. Prohibits a landlord from charging costs of storage for personal property when the property remains on the premises and is claimed within two days of when the tenant vacated the premises. (Civ. Code § 1987)
14. Authorizes a landlord to retain for their personal uses, sell, destroy, or otherwise dispose of personal property left on the premises by the former tenant if the property remains unclaimed after the landlord provided notice, and the landlord reasonably believes that the property has a resale value less than $700. (Civ. Code § 1988.)
15. Requires the landlord to hold a public sale with competitive bidding for unclaimed personal property left by a former tenant if the value of the property is believed to be worth $700 or more, and the property is not claimed by the tenant within the 15-day notice period. (Civ. Code § 1988.)
16. Requires notice of the sale be published in a newspaper of general circulation in the county where the sale is held, with the last publication occurring at least five days before the sale, and must describe the property to be sold. (Id.)
17. Requires that the proceeds from the sale, minus the costs of the storage, advertising, and sale of the property, must be paid by the landlord to the treasury of the county in which the sale took place within 30 days of the sale, unless claimed by the tenant before it is paid to the treasury. The tenant is then able to claim the proceeds from the treasury within a year. (Id.)
18. Establishes that the personal property described in the notice must either be left on the vacant premises or stored by the landlord in a place of safekeeping, and provides that the landlord must exercise reasonable care, but is not liable for any loss not caused by their deliberate or negligent act. (Civ. Code § 1986)
19. Requires, for month-to-month residential tenancies, 30 days’ advance notice of any change in the terms of the lease or any raise in rent, except as specified. Requires, for tenancies of terms less than a month, that notice be provided at least as long as term to expire. (Civ. Code § 827(b)(2))

This bill:

1. Specifies that a self storage facility must give written notice to the occupant prior to the termination or non-renewal of the rental agreement, and that such notice must include a statement that the occupant may minimize the costs of storage by claiming any property remaining at the self-service storage facility within two days after the end of the rental agreement and that the property may be sold, kept, destroyed, or disposed of if it is not claimed within the time period provided in this bill.
2. Specifies that, where a renter of a self storage unit leaves personal property at the self storage facility after the rental agreement has ended, the owner of the self storage facility must provide the former renter notice that describes the property in a manner reasonably adequate to permit the renter to identify it; advises the renter that rent may be charged before the property is returned, where the property may be claimed, and the date not less than 15 days after the notice is personally delivered, or 18 days after the notice is deposited in the mail, by which the renter must claim the property. Specifies that this notice must be personally delivered, sent by first-class mail with prepaid postage to the last known address or alternative address, or by email pursuant to Business and Professions Code Section 21712.
3. Provides an example notice of abandoned property that a self storage facility may use for satisfying the notice requirement described in 1, including a statement that the owner of the self storage facility may sell any unclaimed property, or that the owner will sell, destroy, keep, or otherwise dispose of any unclaimed property because it is believed to be less than $300 in value.
4. Requires that personal property left at the facility must either be left at the self storage facility, or be stored by the owner in a place of safekeeping until it is released to the renter or is disposed of. Requires the owner to exercise reasonable care in storing the property, but specifies that the owner is not liable to the former renter or any other person for any loss not caused by the owner’s deliberate or negligent act.
5. Specifies that the abandoned property must be released to the former renter if the renter pays the rent for storing the property, and takes possession no later than the date specified in the notice of abandoned property. Specifies that, where the property is not released before the specified date, the owner of the self storage facility must release the property to the renter if the renter claims it prior to the time it is sold, kept, destroyed, or otherwise disposed of, and pays the rent and reasonable costs of advertising and sale. Specifies further that the owner must release the property to the renter and not require the renter pay the cost of storage, if the property remained in the storage facility and the renter claims the property within two days of termination of the rental agreement.
6. Requires that the owner of the self storage facility, if the property is not claimed by the former renter, sell the property at a public sale by competitive bidding. However, if the owner reasonably believes the property’s resale value to be less than $300, the owner may keep, sell, destroy, or otherwise dispose of the property in any manner. Requires that the owner advertise the public sale through the process for lien sales described in Business and Professions Code Section 21707. Specifies that nothing in this bill’s provisions is to be construed to preclude the self storage facility owner or the renter from bidding on the property at the public sale.
7. Requires that the owner of the self storage facility pay any balance of the proceeds from the public sale of abandoned property to the treasury of the county in which the sale took place within 30 days of the sale, less the rent for storing the property and the costs of advertising and sale. Specifies that the former renter may claim the proceeds within one year from when the owner pays the proceeds to the county treasury by making an application to the county treasurer or other designated official.
8. Specifies that an owner of a self storage facility may change the terms of a rental agreement for a self storage unit after providing the renter 30 days’ notice of the change. Requires such notice be given in writing by personal delivery, first-class mail with prepaid postage to the last known address of the renter, or by email pursuant to Business and Professions Code Section 21712. Specifies that the notice shall, in and of itself, operate to create and establish the terms and conditions of the agreement, if the renter continues to store personal property at the self storage facility at the time the notice takes effect.
9. Specifies that the provisions of the Civil Code that regulate the disposition of personal property remaining on the premises after the termination of a tenancy shall only apply to self storage units to the extent that it does not conflict with the California Self Storage Facilities Act.

FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local: No

SUPPORT: (Verified 6/5/24)

California Self Storage Association (co-source)

Self Storage Association (co-source)

OPPOSITION: (Verified 6/5/24)

None received

ARGUMENTS IN SUPPORT:

According to the California Self Storage Association, which is a sponsor of AB 1916:

… the process for handling the abandoned property is unclear and can create uncertainty for both self storage operators and occupants. Some operators obtain a courtordered eviction following an unlawful detainer lawsuit and others rely on the process outlined in their rental agreement.

In these instances, self storage occupants sometimes choose to abandon certain items upon terminating a lease rather than incur the cost of moving and/or disposing of the property themselves. Further, any abandoned property is often of little to no value. However, when disposing of the property, self storage operators – many of whom are California small businesses – not only take on the financial burden but also, unfortunately, run the risk of potential litigation given the lack of clarity in current law. Additionally, it should be noted that because renting a self storage unit is different from a residential tenancy, an unlawful detainer lawsuit is not fitting for these cases and can result in a waste of court resources.

Addressing the second question, similarly, the Act is currently silent on the process for revising the terms of the rental agreement. Rental agreements may be revised, for example, when a new owner purchases a self storage facility and requests that the occupants sign the new owner’s rental agreement or when an existing owner changes a rental agreement in response to statutory or other legal changes. In these instances, self storage owners provide occupants with a copy of the revised agreement. Once an occupant reviews the new agreement, it is often signed without issue. However, on occasion, an occupant may or refuse fail to sign the revised agreement, even after having ample time to do so. All the while, the occupant continues to use the storage space. In these cases, should an issue arise, there could be confusion as to which agreement is enforceable. Without such clarity, the risk of unnecessary and burdensome litigation also exists.

AB 1916 uses two existing provisions in the Civil Code as a model to resolve the uncertainty in the Act. First, existing provisions of the Civil Code (CC 1983, et seq.) set forth a process for addressing property abandoned by occupants at the end of a lease term. AB 1916 simply mirrors many of the key provisions from current law, but tailors the proposal to self storage rentals and includes it in the Act.

Also, it should be noted that this proposed process for abandoned property is similar to the Act’s existing process when an occupant fails to pay rent and the owner must enforce its lien rights. Importantly, the process maintains key consumer protections including notice to the occupant and any alternative contact identified in the rental agreement, an opportunity to remove their property within a specified time, and, if applicable, return to the occupant of any excess proceeds from the sale.

More specifically, under AB 1916, when personal property remains at the self storage facility after the tenancy has been terminated, the self storge owner must provide written notice to the former occupant. The notice must describe the property in a manner reasonably adequate to permit the former occupant to identify it. The notice must also advise the former occupant of where the property may be claimed and the date before which the claim must be made. The date specified in the notice must be a date not less than 15 days after the notice is personally delivered or emailed, or, if mailed, not less than 18 days after the notice is deposited in the mail. AB 1916 further provides that the notice must either inform the former occupant that if the property is not reclaimed, the self storage owner will sell it at a public auction or otherwise dispose of the property.

Additionally, as noted earlier, the Act is currently silent on the process for changing the terms of the rental agreement. To address this, AB 1916 proposes Civil Code 827 as a foundation for establishing a process for changing the terms of self storage rental agreements. This process would require the owner to provide the occupant with at least 30 days between service of the notice modifying the terms and the effective date of those terms. The terms would be binding on the occupant if the occupant continued to store personal property after the effective date of the modified terms, even if the occupant did not sign the rental agreement.

ARGUMENTS IN OPPOSITION: None received

ASSEMBLY FLOOR: 74-0, 3/18/24

AYES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Juan Carrillo, Wendy Carrillo, Cervantes, Chen, Connolly, Davies, Dixon, Essayli, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Low, Lowenthal, Maienschein, Mathis, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Rendon, Reyes, Luz Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

NO VOTE RECORDED: Calderon, Megan Dahle, Hart, Lee, Ramos, Soria

Prepared by: Ian Dougherty / JUD. / (916) 651-4113

6/5/24 16:22:43

**** END ****

SENATE JUDICIARY COMMITTEE

Senator Thomas Umberg, Chair

2023-2024 Regular Session

Bill No: AB 1916 (Author:Maienschein)

Version: March 6, 2024

Hearing Date: June 4, 2024

Fiscal: No

Urgency: No

Consultant: ID

SUBJECT

Self-service storage facilities: abandoned personal property

DIGEST

This bill creates a process through which a self storage facility may sell or dispose of personal property left by a renter at a self storage facility after the rental agreement for a self storage unit ends, and creates a process by which a self storage facility may change the terms of a rental agreement, as specified.

EXECUTIVE SUMMARY

There are 50,000 self storage facilities across California that are utilized by thousands of Californians every day to store personal items and help with moving. However, sometimes renters of self storage units abandon their unit and the property within them, or fail to collect all of their personal property from the unit or self storage facility once the rental agreement for the unit ends. The California Self Storage Facilities Act (the Act) provides a process by which a self storage facility may sell or dispose of a renter’s property pursuant to a lien on the property when the renter does not pay their rental payments; however, the Act does not specify a process for disposing of property left after a rental agreement ends. Furthermore, the Act does not include a process by which a self storage facility may change the terms of a rental agreement between rental periods, or a process, outside of standard contract law, to determine which version of the rental agreement applies when a renter continues to use a self storage unit without signing the new, amended rental agreement. AB 1916 proposes to address these two issues with the Act.

AB 1916 is sponsored by the Self Storage Facilities Association and the California Self Storage Facilities Association, and the Committee has received no timely opposition.

PROPOSED CHANGES TO THE LAW

Existing law:

1. Establishes the California Self Storage Facilities Act to regulate the rental agreements between a self storage facility and a renter of a storage unit, specify how a self storage facility may sell a renter’s personal property for non-payment of rent and other charges, and specify limits on allowable late payment fees and other rules regarding self storage facilities. (Bus. & Prof. Code § 21700 et seq.)
2. Specifies that an owner of a self storage facility or their heirs or successors hold a lien on a renter’s personal property located in a storage unit, for the purposes of recovering any owed rent payments, labor costs, late payment fees, expenses for holding and disposing of the property, or other charges incurred pursuant to the rental agreement. (Bus. & Prof. Code § 21702.)
3. Provides that each contract for the rental or lease of individual storage space requires a statement that the occupant’s property will be subject to a claim of lien and may even be sold to satisfy the lien if the rent or other charges due remain unpaid for 14 consecutive days. (Bus. & Prof. Code § 21712 (a).)
4. Requires every contract for the rental or lease of individual storage space in a self-service storage facility to be in writing and to contain a statement that the occupant’s property will be subject to a claim of lien and may even be sold to satisfy the lien if the rent or other charges due remain unpaid for 14 consecutive days. (Bus. & Prof. Code § 21712 (a).)
5. Provides that a self storage facility may terminate a renter’s right to use the storage unit if rent or other charges remain unpaid after 14 consecutive days, the facility sends the renter a specified notice of the delinquent payments and the timeline by which the facility may deny the renter access to the unit and sell the contents, and the owed charges are not paid within 14 days of the mailing of the notice. (Bus. & Prof. Code §§ 21703-21705.)
   1. Provides that, at the end of the 14 day period after the initial notice is mailed to the renter, the lien attaches, and the facility may deny the renter access to the unit, and the owner of the facility may enter the unit and remove any property to a place for safekeeping, if the rent remains unpaid. (Bus. & Prof. Code § 21705.)
   2. Specifies that, once the owner of the facility has taken those actions, they must mail the renter a blank declaration of opposition to the lien sale and a notice of lien sale that states, among other things, that the property in the unit may be sold after a specified date not less than 14 days from the mailing of the lien sale notice. (Bus. & Prof. Code § 21705(b).)
6. Specifies that, if a declaration of opposition to the lien sale is not received by the owner of the facility, or is withdrawn, before the specified date in the notice of lien sale, the owner may sell the renter’s property. (Bus. & Prof. Code § 21706.)
7. If a declaration of opposition to the lien sale is received, the owner of the facility may only enforce the lien through civil court or a small claims court. (Bus. & Prof. Code § 21710.)
8. Specifies that, for the process of selling property after expiration of the time in the notice of lien pursuant to Business and Professions Code 21705, an advertisement of sale must be published before the sale in either of the following ways: by once per week for two consecutive weeks in a newspaper of general circulation published in the public notice district where the sale is to be held, or in the county where the self-service storage facility is located; once in a newspaper of general circulation published in the public notice district where the sale is to be held or in the county where the self-service storage facility is located and once on any publicly accessible internet website that customarily conducts or advertises online auctions or sales, on which the advertisement must remain for at least 7 days. If there is no newspaper of general circulation published in the public notice district where the sale is to be held or the county where the self-storage facility is located, requires the advertisement be posted at least 10 days before the sale in at least six conspicuous places in the neighborhood of the proposed sale. (Bus. & Prof Code § 21707.)
9. Specifies that, minus the amount of the lien and costs of the sale, the owner must retain the excess proceeds of the sale on the occupant’s behalf, to be claimed by the occupant or other person within one year of the sale, after which the remaining proceeds must be paid to the treasury of the county in which the sale was held. (Id.)
10. Provides that the required notices, as specified, may be sent to the occupant at their provided electronic mail address only if: the rental agreement states that lien notices may be sent to the occupant and the alternate address by electronic mail; the occupant provides a written signature on the rental agreement consenting to receive lien notices by electronic mail. (Bus. & Prof. Code § 21712(c).)
11. Requires the landlord, when personal property has been left behind after termination of a tenancy, to provide written notice to the former tenant of their right to reclaim the abandoned property for at least 15 days after the notice is personally delivered, or 18 days after deposit if mailed. (Civ. Code § 1983.)
12. Requires the above notice to inform the tenant whether the landlord intends to hold a public sale for the property, or intends to keep or dispose of the property because it is believed to be worth less than $700 if it is not claimed within the time specified. (Civ. Code § 1984.)
13. Requires the landlord to release the personal property to the former tenant or, at the landlord’s option, to any person reasonably believed by the landlord to be its owner, if such tenant or other person pays the reasonable cost of storage and takes possession of the property not later than the date specified in the required notice of remaining property. Specifies that the landlord must release the personal property to the tenant or owner after the specified date in the notice if the tenant or owner pays the reasonable costs of storage and any reasonable costs for the sale incurred up to the point of claim, if the property is claimed before it is sold or otherwise disposed of. Prohibits a landlord from charging costs of storage for personal property when the property remains on the premises and is claimed within two days of when the tenant vacated the premises. (Civ. Code § 1987.)
14. Authorizes a landlord to retain for their personal uses, sell, destroy, or otherwise dispose of personal property left on the premises by the former tenant if the property remains unclaimed after the landlord provided notice, and the landlord reasonably believes that the property has a resale value less than $700. (Civ. Code § 1988.)
15. Requires the landlord to hold a public sale with competitive bidding for unclaimed personal property left by a former tenant if the value of the property is believed to be worth $700 or more, and the property is not claimed by the tenant within the 15-day notice period. (Civ. Code § 1988.)
16. Requires notice of the sale be published in a newspaper of general circulation in the county where the sale is held, with the last publication occurring at least five days before the sale, and must describe the property to be sold. (Id.)
17. The proceeds from the sale, minus the costs of the storage, advertising, and sale of the property, must be paid by the landlord to the treasury of the county in which the sale took place within 30 days of the sale, unless claimed by the tenant before it is paid to the treasury. The tenant is then able to claim the proceeds from the treasury within a year. (Id.)
18. Establishes that the personal property described in the notice must either be left on the vacant premises or stored by the landlord in a place of safekeeping, and provides that the landlord must exercise reasonable care, but is not liable for any loss not caused by their deliberate or negligent act. (Civ. Code § 1986.)
19. Requires, for month-to-month residential tenancies, 30 days’ advance notice of any change in the terms of the lease or any raise in rent, except as specified. Requires, for tenancies of terms less than a month, that notice be provided at least as long as term to expire. (Civ. Code § 827(b)(2).)

This bill:

1. Specifies that, where a renter of a self storage unit leaves personal property at the self storage facility after the rental agreement has ended, the owner of the self storage facility must provide the former renter notice that describes the property in a manner reasonably adequate to permit the renter to identify it; advises the renter that rent may be charged before the property is returned, where the property may be claimed, and the date not less than 15 days after the notice is personally delivered, or 18 days after the notice is deposited in the mail, by which the renter must claim the property. Specifies that this notice must be personally delivered, sent by first-class mail with prepaid postage to the last known address or alternative address, or by email pursuant to Business and Professions Code Section 21712.
2. Provides an example notice of abandoned property that a self storage facility may use for satisfying the notice requirement described in 1, including a statement that the owner of the self storage facility may sell any unclaimed property, or that the owner will sell, destroy, keep, or otherwise dispose of any unclaimed property because it is believed to be less than $300 in value.
3. Requires that personal property left at the facility must either be left at the self storage facility, or be stored by the owner in a place of safekeeping until it is released to the renter or is disposed of. Requires the owner to exercise reasonable care in storing the property, but specifies that the owner is not liable to the former renter or any other person for any loss not caused by the owner’s deliberate or negligent act.
4. Specifies that the abandoned property must be released to the former renter if the renter pays the rent for storing the property, and takes possession no later than the date specified in the notice of abandoned property. Specifies that, where the property is not released before the specified date, the owner of the self storage facility must release the property to the renter if the renter claims it prior to the time it is sold, kept, destroyed, or otherwise disposed of, and pays the rent and reasonable costs of advertising and sale. Further specifies that the owner must release the property to the renter and not require the renter pay the cost of storage, if the property remained in the storage facility and the renter claims the property within two days of termination of the rental agreement.
5. Requires that the owner of the self storage facility, if the property is not claimed by the former renter, sell the property at a public sale by competitive bidding. However, if the owner reasonably believes the property’s resale value to be less than $300, the owner may keep, sell, destroy, or otherwise dispose of the property in any manner. Requires that the owner advertise the public sale through the process for lien sales described in Business and Professions Code Section 21707. Specifies that nothing in the bill’s provisions is to be construed to preclude the self storage facility owner or the renter from bidding on the property at the public sale.
6. Requires that the owner of the self storage facility pay any balance of the proceeds from the public sale of abandoned property to the treasury of the county in which the sale took place within 30 days of the sale, less the rent for storing the property and the costs of advertising and sale. Specifies that the former renter may claim the proceeds within one year from when the owner pays the proceeds to the county treasury by making an application to the county treasurer or other designated official.
7. Specifies that an owner of a self storage facility may change the terms of a rental agreement for a self storage unit after providing the renter 30 days’ notice of the change. Requires such notice be given in writing by personal delivery, first-class mail with prepaid postage to the last known address of the renter, or by email pursuant to Business and Professions Code Section 21712. Specifies that the notice shall, in and of itself, operate to create and establish the terms and conditions of the agreement, if the renter continues to store personal property at the self storage facility at the time the notice takes effect.
8. Specifies that the provisions of the Civil Code that regulate the disposition of personal property remaining on the premises after the termination of a tenancy shall only apply to self storage units to the extent that it does not conflict with the California Self Storage Facilities Act.

COMMENTS

1. Author’s statement

According to the author:

AB 1916 is modeled from existing provisions in the Civil Code. This proposed law, designed for self-storage rentals, fits neatly into the framework of the Self-Storage Facilities Act. It reflects the consumer protections outlined in the California Self Storage Facilities Act. This ensures tenants receive proper notification and can reclaim their property within a specific time frame. Any extra proceeds from potential sales are returned to them, emphasizing fairness and accountability.

Specifically, AB 1916 mandates that self-storage facility owners issue written notices to consumers when personal property remains on the premises post-tenancy termination. These notices must sufficiently describe the property and provide details on where and by when it can be claimed, with a minimum notice period of 15 days for personal delivery or email, and 18 days for mail. Failure to reclaim the property within the stipulated time frame may result in its sale at public auction or disposal.

Furthermore, in addressing the absence of a process for modifying rental agreements within the California Self-Service Storage Facilities Act, AB 1916 proposes adopting Civil Code 827 as a basis. This would require owners to provide tenants with at least 30 days’ notice of any proposed modifications, which would become binding if the tenant continues to store property after the effective date, even if the tenant did not sign the rental agreement.

By revising the California Self-Service Storage Facilities Act, AB 1916 aims to establish standardized procedures for handling abandoned property and modifying rental agreements within the self-storage industry. This not only ensures clarity and consistency for operators but also upholds essential consumer safeguards, fostering transparency and accountability for all parties involved.

1. Self storage units and their current regulation

Self storage facilities provide individual self storage units that can be rented to store items large and small, with renters having access to the unit and the ability to store whatever can fit in the unit they rent. Units vary in size, from only a few feet in width and depth to 10 by 20 feet in width and depth or larger. The growth of self storage facilities has been tremendous in recent years, with some reports estimating that the United States added 3,000 new self storage facilities every year from 2000 to 2005, and that self storage facilities went from 6,600 in 1985 to now more than 50,000 across the nation.^[1] The self storage industry is currently estimated to be a $44.3 billion industry.^[2] In California, there are about 3,500 self storage facilities with a combined storage space of 213.3 million square feet.^[3] Abandonment of units is also not uncommon, as estimates suggest that 155,000 storage units are auctioned off each year.^[4] Self storage units have become so ubiquitous in American life that they have spawned an entire television show, called “Storage Wars,” in which treasure hunters bid on storage units at auctions of storage units that have been abandoned.

Self storage units are specifically regulated by the California Self-Storage Facility Act (the Act) (Bus. & Prof. Code §§ 21700-21716). The Act regulates the written rental agreements between a self storage facility and a renter of a storage unit, the allowable late payment fees for when a renter of a unit fails to make rental payments, and how a self storage facility may ultimately dispose of a renter’s property for unpaid rent and other charges. The Act specifies that an owner of a self storage facility or their heirs or successors hold a lien on a renter’s personal property located in a storage unit, for the purposes of recovering any owed rent payments, labor, late payment fees, expenses for holding and disposing of the property, or other charges incurred pursuant to the rental agreement. (Bus. & Prof. Code § 21702.)

The Act specifies a process through which a self storage facility may act upon that lien to deny the renter access to the unit and sell off a renter’s property when a renter has not paid the owed rent or fees. It provides that a self storage facility may terminate a renter’s right to use the storage unit if: rent or other charges remain unpaid after 14 consecutive days; the facility sends the renter a specified notice of the delinquent payments and the timeline by which the facility may deny the renter access to the unit and sell the contents; and the owed charges are not paid within 14 days of the mailing of the notice. (Bus. & Prof. Code §§ 21703-21705.) At the end of the 14 day period after the initial notice is mailed to the renter, the lien attaches, and the facility may deny the renter access to the unit, and the owner of the facility may enter the unit and remove any property to a place for safekeeping. (Bus. & Prof. Code § 21705.) Once the owner of the facility has taken those actions, they must mail the renter a blank declaration of opposition to the lien sale and a notice of lien sale that states, among other things, that the property in the unit may be sold after a specified date, not less than 14 days from the mailing of the lien sale notice. (Bus. & Prof. Code § 21705(b).) If a declaration of opposition to the lien sale is not received by the owner of the facility, or is withdrawn, before the specified date, the owner may sell the renter’s property. (Bus. & Prof. Code § 21706.) If a declaration of opposition to the lien sale is received, the owner of the facility may only enforce the lien through civil court or a small claims court. (Bus. & Prof. Code § 21710.)

To sell the property, the facility must advertise the sale, either once a week for two consecutive weeks in a newspaper of general circulation or once in a newspaper of general circulation and on a publicly accessible internet website for one week. (Bus. & Prof. Code § 21707.) If there is no newspaper of general circulation published in the public notice district where the sale is to be held or the county where the self-storage facility is located, the advertisement must be posted at least 10 days before the sale in at least six conspicuous places in the neighborhood of the proposed sale. (Id.) The sale may be conducted in-person or through a publicly accessible internet website that customarily conducts online auctions or sales, as long as the sale is conducted in a commercially reasonable manner. (Bus. & Prof. Code § 21707(b).) The owner of the self storage facility must retain any proceeds from the sale on the renter’s behalf, less the costs of the sale and the amount of the lien, for a year, to be claimed by the renter or a person with a claim against the sold property, after which point the owner of the facility must provide the proceeds to the treasury of the county in which the sale was held. (Id.)

In addition to this lien process, the Act specifies allowable late payment fees and what must be included in the rental agreement between a self storage facility and the renter of the unit. The Act requires that a contract for the rental of a self storage unit be in writing, and contain a statement that the renter’s property will be subject to a lien and may be sold pursuant to that lien if the rent or other charges remain unpaid after 14 consecutive days. (Bus. & Prof. Code § 21712.) The rental agreement must also request the renter to provide the name and mailing or email address for another person for the purposes of receiving the statutorily-required lien notices, and the Act specifies that the lien shall not attach if this information is not requested in the lease. (Id.) These provisions do not specify how a self storage facility may amend the rental agreement, or what may happen when the facility does so and the renter continues to use the unit. In addition, the Act limits late payment fees to the amount specified in the rental agreement, that is not greater than specified amounts based on the monthly rent (for example, not more than $10 when monthly rent is $60 or less), and can only be assessed once for each rental payment not paid for at least 10 days after the due date. (Bus. & Prof. Code § 21713.5.) However, notably, the Act does not specify or mention how a self storage facility must handle or dispose of a renter’s property that is left after the rental agreement and the rental of the unit has ended.

1. The current process for a landlord to dispose of a tenant’s remaining property once the tenancy has ended

A comparable scenario to the one addressed by this bill exists in the residential landlord-tenant context. When a tenant leaves personal property on the premises of the residence after the end of their tenancy, the landlord may only dispose of that property through a process specified in Civil Code Sections 1980 through 1991. Those provisions require the landlord to provide written notice to the tenant, and any other person the landlord reasonably believes to be the owner of the remaining property, that describes the property, advises that the landlord may charge reasonable costs for the storage of the property before it is returned, and where and by when the owner must claim the property. (Civ. Code § 1983.) The notice must specify a date by which the property must be claimed, and this date may not be less than 15 days after the notice is personally delivered, or 18 days after the notice is deposited in the mail. The notice must also advise the tenant that the landlord either may sell unclaimed property, or if it is worth less than $700, keep, sell, or destroy it without further notice. (Civ. Code § 1984.) The landlord must release the remaining property if the tenant or owner of the property claims it before the specified date in the notice of the sale and pays the landlord the reasonable costs for its storage and sale costs, if any. (Civ. Code § 1987.) However, if the tenant or owner of the property claims it within two days of the tenant vacating the dwelling, the landlord may not require the tenant or owner pay any storage costs to receive the property.

If the landlord reasonably believes that the value of the property is less than $700, the landlord may retain the property for themselves, sell the property, or dispose of it in any manner. (Civ. Code § 1988.) However, if the property is valued at more than $700, the landlord must sell it at a public sale by competitive bidding. Notice of the sale must be published in a newspaper of general circulation in the county where the sale is held, with the last publication occurring at least five days before the sale, and must describe the property to be sold. (Id.) The proceeds from the sale, minus the costs of the storage, advertising, and sale of the property, must be paid by the landlord to the treasury of the county in which the sale took place within 30 days of the sale, unless claimed by the tenant before it is paid to the treasury. The tenant is then able to claim the proceeds from the treasury within a year. (Id.)

1. AB 1916 addresses how self-storage companies dispose of a renter’s remaining property by adopting a process similar to the process for landlords of residential properties

AB 1916 proposes to create a clear process in the California Self Storage Facility Act for a self storage facility to sell or dispose of a renter’s property that is left at the unit after the rental agreement ends. The arrangement it creates is substantially similar to the process in place for a landlord to dispose of a tenant’s leftover property. Specifically, it requires that, when personal property is left at a storage unit after the end of the rental agreement, the facility must deliver to the former renter a notice that describes the property in a manner reasonably adequate to permit the former renter to identify it, advises that rent may be charged before the property is returned, where and by when the property must be claimed, and that unclaimed property may be sold or otherwise disposed of. It requires that the notice specifies the date, which must be not less than 15 days after the notice is personally delivered to the former renter or 18 days after the notice is deposited in the mail, by which the former renter must claim the property. In addition, similar to the Civil Code provisions for a tenant who has left property after their tenancy, AB 1916 provides a sample notice for satisfying these notice requirements.

AB 1916 also specifies how self storage facilities may store leftover property, and how a former renter may reclaim their property. It specifies that the property must be left at the self storage facility, or be stored by the facility in a place of safekeeping until it is claimed or disposed of. It further specifies that the self storage facility owner must exercise reasonable care in storing the leftover property, but may not be liable for any loss not caused by the facility owner’s deliberate or negligent act. If a former renter wishes to reclaim their property, AB 1916 requires that the property be released to the renter if they pay the rent charged for storing the property and take possession of the property not later than the date specified in the notice sent to the renter. If the renter does not claim their property before that specified date, the facility must nonetheless release the property to the renter if the renter claims the property before it is sold, kept, destroyed, or otherwise disposed of and pays the rent and reasonable costs related to the sale of the property incurred prior to the claim. If a renter claims the property within two days of the end of the rental agreement, and the property remained in the storage facility, AB 1916 prohibits the self storage facility from charging the cost of storage for releasing the property to the renter.

When the property is not claimed by the renter, AB 1916 specifies how the self storage facility may dispose of the property. AB 1916 requires that the facility sell the property at a public sale by competitive bidding, unless the facility owner reasonably believes that the total resale value of the property is less than $300, in which case the facility owner may dispose of the property by sale, destruction, keeping the item, or by otherwise disposing of the property in any manner. To sell the property, the bill requires that the facility owner advertise the sale through the process already outlined in Business and Professions Code Section 21707 for selling property pursuant to a lien. AB 1916 requires that the self storage facility owner pay the proceeds from the sale, after deducting the rent and costs of advertising and sale, to the treasury of the county in which the sale took place within 30 days of the sale. The former renter is then able to claim these proceeds from the treasury within one year from the date of the payment by the facility owner to the treasury.

This process deviates from the process required in the disposition of a tenant’s property under Civil Code Section 1980 in a number of ways. One significant difference is the value amount required for the facility or landlord to be able to dispose of the property other than through a public sale: AB 1916 specifies this threshold value to be $300, whereas the provisions relating to a residential tenant’s property specifies a threshold value of $700. AB 1916 also differs from the landlord-tenant process in the charges that may be charged for the storage of leftover property. In the landlord-tenant context, the landlord may only charge the “reasonable” costs of storage, with the cost being a fair rental value of the space reasonably required to store the property when kept on the premises. AB 1916 does not specify the rent that a self storage facility may charge for keeping leftover property. The last significant difference relates to the required notice of sale, as notice must be published at least five days before the sale in the landlord-tenant context, while AB 1916 requires notice be made in the same process as is required for a sale pursuant to a lien on the self storage unit under the California Self Storage Facility Act (which requires notice be published for 10 days or two weeks, depending on the process utilized).

1. AB 1916 specifies how a self storage facility may change the terms of a storage unit rental agreement

AB 1916 also includes provisions that specify a process by which a self storage facility may amend the rental agreement between the facility and the renter. It specifies that a self storage facility may change the terms of the rental agreement at least 30 days after providing written notice to the renter of the change. The notice must be provided either by personal delivery, first-class mail with prepaid postage, or by email pursuant to current rules on email notices for self storage facilities. AB 1916 additionally specifies that the notice of the change in terms in and of itself operates to create and establish the terms, rents, and conditions of the rental agreement if the renter continues to store personal property at the self-storage unit after the notice takes effect.

The author asserts that this provision is needed to address the silence in the California Self Storage Facility Act with regards to the process for amending the terms of a rental agreement for a storage unit. They assert that currently, instances arise where a renter is provided a revised rental agreement, but does not sign it before it is to take effect, resulting in confusion over which version of the rental agreement applies. While the Act currently does not address changes in the terms of the rent agreement, standard contract law already includes rules for determining which version of the contract applies and for determining performance of a contract as acceptance. Thus, while the statute is unclear, contract law itself may provide answers should a dispute arise out of a particular instance where the renter did not sign the new rental agreement. Additionally, the author asserts that agreements may be revised when a new owner purchases the self storage facility or when a legal or statutory change requires a change. However, AB 1916 does not specify what terms or conditions of the rental agreement may be changed through its 30-day notice process, or for what reason. Thus, all rental agreement terms, including the monthly rent charged the renter, may be changed through the bill’s process.

This provision of AB 1916 is modeled on Civil Code Section 827, which provides the process by which a landlord may change the terms of a rental agreement when the tenancy is for a week-to-week, month-to-month, or for any other period less than a month. Civil Code section 827 requires that specified, written notice be provided to the tenant, and that the change may take effect after at least 30 days from the notice for a month-to-month lease, and upon expiration of a period at least as long as the contract term, when the tenancy is for terms less than a month. Civil Code Section 827 also includes provisions like those included in AB 1916 specifying that the notice of the change in the rental agreement shall operate to create and establish the new terms and conditions of the agreement if the tenant continues to hold the premises after the effective date. However, Civil Code Section 827 only applies to month-to-month or shorter leases. AB 1916’s provisions would apply to all rental agreements for a self storage unit, even if the rental period is longer than a month. While most self storage units are rented on a month-to-month basis, a unit can be rented for longer periods of time.

Notwithstanding these considerations, AB 1916 does provide clarity in the timeline by which the self storage facility may change the rental agreement, providing the renter with clear notice and 30 days to review or move their possessions out of the unit should they object to the changes to the agreement.

1. Amendments

To ensure that renters of self storage units are aware before the rental agreement ends that personal property they leave at the storage unit may be sold and they may be charged rent before reclaiming it, the author has agreed to amendments that would require a self storage facility to notify the renter prior to the termination or non-renewal of the rental agreement that the renter may minimize storage charges by claiming any remaining property within two days of the end of the rental agreement, and that unclaimed property may be sold, kept, destroyed, or disposed of if it is not claimed within the time period described in this bill. A full mock-up of the amendments are attached at the end of this analysis.^[5]

SUPPORT

California Self Storage Association (sponsor)
Self Storage Association (co-sponsor)

OPPOSITION

None received

RELATED LEGISLATION

Pending Legislation: None known.

Prior Legislation:

AB 542 (Juan Carrillo, Ch. 531, Stats. 2023) amended the Act to require publication of a notice of a sale of a unit’s property pursuant to a lien on the property, as specified.

AB 655 (Emmerson, Ch. 439, Stats. 2010) amended the provisions of the Act to specify that the lien attaches to the property in the self storage unit if the renter has not paid the full amount due within 14 days of the termination date specified in the lien notice, and specified the required notice of lien sale and process by which a renter may claim their property prior to the lien sale.

AB 2263 (Correa, Ch. 156, Stats. 1999) authorized an owner of a self storage facility to assess renters of units specified late payment fees for delinquent rental payments, and provided that liens imposed on self storage units include any late payment fees.

PRIOR VOTES:

Assembly Floor (Ayes 74, Noes 0)

Assembly Judiciary Committee (Ayes 10, Noes 0)

**************

MOCK-UP OF AMENDMENTS TO AB 1916

THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

SECTION 1.

 Section 21712.3 is added to the Business and Professions Code, to read:

21712.3.

(1) The owner shall notify the occupant in writing prior to the termination or non-renewal of the rental agreement. The notice shall include a statement that the occupant may minimize the costs of storage by claiming any property remaining at the self-service storage facility within two days after the end of the rental agreement, and that the property may be sold, kept, destroyed, or disposed of if it is not claimed within the time period described in Section 21712.3(2)(b). 

(2)(a) Where personal property remains at the self-service storage facility after the rental agreement has ended, the owner shall give written notice to the former occupant.

(b) The notice shall describe the property in a manner reasonably adequate to permit the former occupant to identify it. The notice shall advise the former occupant that rent may be charged before the property is returned, where the property may be claimed, and the date before which the claim must be made. The date specified in the notice shall be a date not less than 15 days after the notice is personally delivered or emailed, or, if mailed, not less than 18 days after the notice is deposited in the mail.

(c) The notice shall be personally delivered to the former occupant or sent by first-class mail, postage prepaid, to the last known address of the former occupant and to the alternative address specified in subdivision (b) of Section 21712, or by email pursuant to subdivision (c) of Section 21712.

SEC. 2.

 Section 21712.4 is added to the Business and Professions Code, to read:

21712.4.

 (a) A notice given to the former occupant that is in substantially the following form satisfies the requirements of Section 21712.3:

(b) The notice set forth in subdivision (a) shall also contain one of the following statements, as applicable:

(1) “If you fail to reclaim the property, it will be sold at a public sale after notice of the sale has been given by publication. You have the right to bid on the property at this sale. After the property is sold and the rent and costs of advertising and sale are deducted, the remaining money will be paid over to the county. You may claim the remaining money at any time within one year after the county receives the money.”

(2) “Because this property is believed to be worth less than $300, it may be kept, sold, destroyed, or otherwise disposed of without further notice if you fail to reclaim it within the time indicated above.”

SEC. 3.

 Section 21712.6 is added to the Business and Professions Code, to read:

21712.6.

 The personal property described in the notice shall either be left at the self-service storage facility or be stored by the owner in a place of safekeeping until the owner either releases the property pursuant to Section 21712.7 or disposes of the property pursuant to Section 21712.8. The owner shall exercise reasonable care in storing the property, but the owner is not liable to the former occupant or any other person for any loss not caused by the owner’s deliberate or negligent act.

SEC. 4.

 Section 21712.7 is added to the Business and Professions Code, to read:

21712.7.

 (a) The personal property described in the notice shall be released by the owner to the former occupant if the former occupant pays the rent and takes possession of the property not later than the date specified in the notice for taking possession.

(b) Where personal property is not released pursuant to subdivision (a), the owner shall release the personal property to the former occupant if the former occupant claims it prior to the time it is sold, kept, destroyed, or otherwise disposed of and pays the rent and reasonable costs of advertising and sale incurred prior to the time the property is released to the former occupant.

(c) Notwithstanding subdivision (a), the owner shall release the personal property described in the notice to the former occupant and shall not require the former occupant to pay the cost of storage if the property remained in the storage facility and the former occupant reclaims the property within two days of termination of the rental agreement.

SEC. 5.

 Section 21712.8 is added to the Business and Professions Code, to read:

21712.8.

 (a) If the personal property described in the notice is not released pursuant to Section 21712.7, it shall be sold at public sale by competitive bidding. However, if the owner reasonably believes that the total resale value of the property not released is less than three hundred dollars ($300), the owner may keep, sell, destroy, or otherwise dispose of the property in any manner. Nothing in this section shall be construed to preclude the owner or former occupant from bidding on the property at the public sale.

(b) An advertisement of the sale shall be published pursuant to Section 21707.

(c) After deduction of the rent and costs of advertising and sale, any balance of the proceeds of the sale which is not claimed by the former occupant shall be paid into the treasury of the county in which the sale took place not later than 30 days after the date of sale. The former occupant may claim the balance within one year from the date of payment to the county by making application to the county treasurer or other official designated by the county. If the county pays the balance or any part thereof to a claimant, neither the county nor any officer or employee thereof shall be liable to any other claimant as to the amount paid.

SEC. 6.

 Section 21715.5 is added to the Business and Professions Code, to read:

21715.5.

 The owner may, upon the expiration of a period of at least 30 days from giving notice in writing to the occupant by personal delivery, by first-class mail, postage prepaid, to the last known address of the occupant, or by email pursuant to subdivision (c) of Section 21712, change the terms of the rental agreement. The notice, upon the expiration of a period of at least 30 days from the date of service, shall in and of itself operate and be effectual to create and establish, as a part of the rental agreement, the terms, rents, and conditions specified in the notice, if the occupant continues to store personal property at the self-service storage facility after the notice takes effect.

SEC. 7.

 Section 1980.5 of the Civil Code is amended to read:

1980.5.

 (a) Except as provided in Section 1993.01, the provisions of this chapter shall not apply to commercial real property, as defined in subdivision (d) of Section 1954.26. For purposes of this section, commercial real property shall not include self-storage units.

(b) This chapter shall apply to self-storage units only to the extent that it does not conflict with Chapter 10 (commencing with Section 21700) of Division 8 of the Business and Professions Code.

1. Jon Mooallem, “The self-storage self” The New York Times (Sept. 2, 2009), available at https://www.nytimes.com/2009/09/06/magazine/06self-storage-t.html; Clay S. Jenkinson, “Too much stuff: Americans and their storage units,” Governing (Dec. 18, 2022), available at https://www.governing.com/context/too-much-stuff-americans-and-their-storage-units. ↑

2. Al Harris, “U.S. Self-storage industry statistics,” Sparefoot (Apr. 16, 2024), available at https://www.sparefoot.com/self-storage/news/1432-self-storage-industry-statistics/. ↑

3. Selfstorage.com, “California self-storage facts” (accessed May 22, 2024), available at https://www.selfstorage.com/self-storage/california/#self-storage. ↑

4. Jenkinson, supra note 1. ↑

5. The amendments may be subject to non-substantive, technical changes required by Legislative Counsel. ↑

Date of Hearing: March 12, 2024

ASSEMBLY COMMITTEE ON JUDICIARY

Ash Kalra, Chair

ABPCA Bill Id:AB 1916

Author:(Maienschein) – As Amended Ver:March 6, 2024

PROPOSED CONSENT

SUBJECT: Self-service storage facilities: abandoned personal property

KEY ISSUE: SHOULD THE ACT GOVERNING SELF-STORAGE FACILITIES BE CLARIFIED TO INCLUDE PROVISIONS ADDRESSING THE DISPOSITION OF ABANDONED PROPERTY AT THE END OF A RENTAL AGREEMENT AND the REQUIREMENTS FOR UPDATING RENTAL AGREEMENTS?

SYNOPSIS

This bill, sponsored by the Self Storage Association and the California Self Storage Association, seeks to resolve uncertainty in the California Self-Storage Facilities Act (the Act) relating to the disposition of abandoned property and the requirements for updating rental agreements. The Act, although extensive in its procedures on a variety of consumer disclosures and protections, is silent on the two issues that this bill seeks to address. First, how to handle property left at a storage unit after the lease has ended and the occupant has paid in full. And second, the effect of an unsigned amended lease agreement. The bill’s procedures for dealing with the abandoned property largely mirror the procedures established in the Civil Code for personal property abandoned at the end of a residential lease—notice, a prescribed period to reclaim the property, and procedures for disposing or publicly selling the property with any remaining proceeds being made available to the former occupant. The bill’s second component establishes that after a 30-day notice period, a lease agreement’s new terms apply if the occupant continues to store their property at the self-storage facility. This bill is unopposed.

SUMMARY: Amends the Self-Storage Facility Act to include provisions addressing the disposition of abandoned property at the end of a rental agreement and the requirements for updating rental agreements. Specifically, this bill:

1. Requires the owner of a self-service storage facility to give notice to a former occupant of any personal property remaining at the facility after the rental agreement has ended.
2. Provides that the notice required in 1):

a) Contain a description of the property in a manner reasonably adequate to allow the former occupant to identify it;

b) Include information about where the property may be claimed, the date before which the claim must be made, and notice that rent may be charged before the property is returned;

c) Be personally delivered, mailed class mail, or electronically mailed;

d) Be dated not less than 15 days after the notice is personally delivered or emailed (if mailed, then not less than 18 days after being placed in the mail);

e) Include a statement informing the former occupant that, if not reclaimed, their property will either be:

i) Sold at a public sale, with the proceeds used to pay rent and costs of advertising, the remaining money paid to the county, which can then be claimed by the prior owner, or;

ii) Kept, sold, destroyed or otherwise disposed of because it is believed to be worth less than $300.

3) Provides a template for the “notice of right to reclaim abandoned property” required in 1).

4) Requires the owner of a self-service storage facility to leave the remaining personal property at the self-service storage facility or store in a place of safekeeping until the remaining property is either released or disposed of.

5) Requires the owner of a self-service storage facility to exercise reasonable care in storing the remaining property as described in 4).

6) Establishes that the owner of a self-service storage facility is not liable for any loss in storing the remaining property as described in 4) not caused by the owner’s deliberate or negligent act.

7) Requires the owner of a self-service storage facility to release the remaining property to the former occupant if the former occupant claims it on or before the date specified in the notice as provided in 2d).

8) Establishes that if the former occupant does not claim the property prior to the noticed date provided in 2d), the owner of a self-service storage facility shall nevertheless release it to the former occupant if the former occupant claims it prior to the time it is sold or disposed of, and pays the rent and reasonable costs of advertising and sale incurred prior to the time the property is released to the former occupant.

9) Establishes that if the former occupant claims the property within two days of termination of the rental agreement, the owner must release the personal property and not require the former occupant to pay the cost of storage incurred after the lease was terminated.

10) Establishes that if the remaining property is not claimed by the former occupant as provided in 7)-9), it must either be sold at a public sale or, if the owner reasonably believes the remaining property is worth less than $300, may be kept, sold, destroyed, or otherwise disposed of.

10) Confirms that the former occupant or self-service storage facility owner may bid on any remaining items at a public sale, if one takes place.

11) Requires that the advertisement of sale is consistent with the requirements specified in existing law.

12) Requires the owner to hold a public sale with competitive bidding for unclaimed personal property left by a former occupant if the value of the property is believed to be worth $300 or more.

13) Permits the owner to deduct the rent associated with storing the abandoned property and costs of advertising and sale from the proceeds of the public sale, with the balance paid to the county as unclaimed property within 30 days of the date of the public sale.

14) Limits the county’s liability for compliance with 13).

15) Allows the owner to change the terms of the lease agreement no fewer than 30 days after providing notice, as required by law.

16) Establishes that after the 30 day period, the terms, rents, and conditions specified in the notice become part of the operative lease agreement so long as the occupant continues to store personal property at the facility.

EXISTING LAW:

1. Provides that each contract for the rental or lease of individual storage space requires a statement that the occupant’s property will be subject to a claim of lien and may even be sold to satisfy the lien if the rent or other charges due remain unpaid for 14 consecutive days. (Business and Professions Code Section 21712 (a).)
2. Clarifies that both property belonging to a known owner and unknown owner that has “not been called for by an owner or consignee” is “unclaimed.” (Shedoudy v. Spreckels Bros. Commercial Co. (1908) 9 Cal. App. 398, 400-401.)
3. Requires the landlord, when personal property has been left behind after termination of a tenancy, to provide written notice to the former tenant of his or her right to reclaim the abandoned property for at least 15 days after the notice is personally delivered, or 18 days if mailed. (Civil Code Section 1983. All further references are to this code unless otherwise stated.)
4. Requires the above notice to inform the tenant whether the landlord intends to hold a public sale for the property, or intends to keep or dispose of the property if it is not claimed within the time specified because it is believed to be worth less than $700. (Section 1984.)
5. Requires the landlord to release the personal property to the former tenant or, at the landlord’s option, to any person reasonably believed by the landlord to be its owner if such tenant or other person pays the reasonable cost of storage and takes possession of the property not later than the date specified in the above notice for taking possession. (Section 1987.)
6. Authorizes a landlord, to retain or dispose of personal property left on the premises by the former tenant if the landlord reasonably believes that the property has a resale value less than $700. (Section 1988.)
7. Requires the landlord to hold a public sale with competitive bidding for unclaimed personal property left by a former tenant if the value of the property is believed to be worth $700 or more. (Ibid.)
8. Establishes notice requirements that include disclosure of the above provisions. (Sections 1984-1985.)
9. Establishes that the personal property described in the notice must either be left on the vacant premises or stored by the landlord in a place of safekeeping, and provides that the landlord must exercise reasonable care and is not liable for any loss not caused by their deliberate or negligent act. (Section 1986.)
10. Requires every contract for the rental or lease of individual storage space in a self-service storage facility to be in writing and to contain a statement that the occupant’s property will be subject to a claim of lien and may even be sold to satisfy the lien if the rent or other charges due remain unpaid for 14 consecutive days. (Business and Professions Code Section 21712 (a).)
11. Requires a self-service storage facility operator to advertise a lien sale in one of two ways:
    1. Once per week for two consecutive weeks in a newspaper of general circulation; or
    2. Once in a newspaper of general circulation published in the public notice district where the sale is to be held or in the county where the self-storage facility is located and once on any publicly accessible internet website that customarily conducts or advertises online auctions or sales. (Business & Professions Code Section 21707 (a).)
12. Requires, for month-to-month residential tenancies, 30 days’ advance notice of an annual rent increase of up to 10% of the prior rent. (Civil Code Section 827 (b)(2).)

FISCAL EFFECT: As currently in print this bill is keyed non-fiscal.

COMMENTS: This bill, sponsored by the Self Storage Association and the California Self Storage Association, seeks to resolve uncertainty in the California Self-Storage Facilities Act (the Act) relating to the disposition of abandoned property and the requirements for updating rental agreements. This bill is largely modeled after provisions of the Civil Code governing abandoned property at the termination of a residential tenancy.

The author of the bill explains the impetus for this measure:

By revising the California Self-Service Storage Facilities Act, AB 1916 aims to establish standardized procedures for handling abandoned property and modifying rental agreements within the self-storage industry. This not only ensures clarity and consistency for operators but also upholds essential consumer safeguards, fostering transparency and accountability for all parties involved.

The California Self-Storage Facility Act has extensive procedures governing liens placed on property for unpaid storage fees. The Act, set forth in Business and Professions Code Sections 21700-21716, is the principal law regulating the relationship between the owners of self-storage facilities and the occupants of self-storage units within those facilities. One of the Act’s most important aspects is its specification of the owner’s rights to dispose of an occupant’s stored personal property if the occupant fails to timely pay storage fees, including rent. Under the Act, the owner has a right to place a lien on the occupant’s personal property as security for unpaid storage fees. However, the lien does not attach (become legally enforceable) unless the owner follows statutory procedures meant to ensure that the occupant has notice of the lien, any lien sale, and an opportunity to oppose the lien sale.

The Act, although extensive in its procedures on a variety of consumer disclosures and protections, is silent on two issues that this bill seeks to address. First, how to handle property left at the storage unit after the lease has ended and the occupant has paid in full. And second, the effect of an unsigned amended lease agreement.

This bill establishes procedures for abandoned property left at a storage unit where storage fees have been paid and the lease agreement has ended. The body of law relating to self-storage facilities is extensive, and for good reason—nearly 10 percent of Americans rent a storage facility. (Jenkinson, Clay, Governing Too Much Stuff: Americans and Their Storage Units, Dec. 18, 2022, available at https://www.governing.com/context/too-much-stuff-americans-and-their-storage-units.) In 2020, California had approximately 3,728 self-storage facilities. (Statista, https://www.statista.com/statistics/1092129/self-storage-facilities-state-usa/ (last visited Mar. 1, 2024).) According to a survey of 10,000 storage unit facilities, the average number of storage units per facility was 546. (ProjectionHub, https://www.projectionhub.com/post/how-to-start-a-self-storage-unit-facility (last visited Mar. 1, 2024).) This translates into millions of units across the state, affecting many Californians.

Most occupants pay on time and in full and therefore the procedures in place for lien sales are not implicated, but according to proponents of this measure, additional clarity and certainty is warranted for dealing with abandoned property when the occupant has paid in full.

This bill is modeled after provisions in the Civil Code addressing abandoned property at the end of a residential tenancy. When personal property remains on rented premises after the tenancy has been terminated, the landlord must provide written notice to the former tenant or to any other person the landlord reasonably believes to be the owner of the property. (Civil Code Section 1983.) The notice must describe the personal property and inform the former tenant or owner of how the landlord plans to dispose of it. The notice also informs the former tenant or owner of his or her right to reclaim the property. Generally, the former tenant must reclaim the property within fifteen days of receiving the notice, if the notice is personally delivered, and within eighteen days of the date the notice was sent, if sent by mail. The former tenant is also informed of his or her right to bid on the property, or to reclaim any proceeds, if the property is sold at public sale. If the former tenant does not respond within the prescribed time, then the landlord is free to dispose of the property in any manner if the property is deemed worth $700 or less, or to commence a public sale if it is deemed worth more than $700.

This bill largely mirrors the process set forth for abandoned property in rental dwellings. It requires notice, provides a time period for the former occupant to retrieve the property without incurring any additional expenses, and establishes procedures for when and how a public sale of the property might occur, along with how the former occupant can collect remaining proceeds, if any.

The general timeline and procedures contemplated by this bill is as follows:

• Day 1: Lease ends, occupant has paid in full, but some property has been left in the unit.
• Day 1: Self-storage owner provides former occupant with notice:
  • Describing the abandoned property
  • Containing information about where the property may be claimed and the date by which it must be claimed.
• Day 1 + 2 days: Former occupant may retrieve abandoned property without incurring any costs.
• Day 1+15 (18 if mailed): Final day to retrieve property before occupant disposes (or publicly sells, if valued at $300 or more). Former occupant is responsible for any sale or storage costs incurred during this time period.
• If a public sale occurs, proceeds minus costs deposited as unclaimed property with the county where sale occurred.
• Former occupant is entitled to collect unclaimed property, if any, from county.

The most significant distinction between this bill and existing law regarding abandoned property at a residential property is the threshold amount. The threshold amount determines whether a self-storage owner has the option to keep or dispose of a former occupant’s unclaimed personal property, or whether they are required to hold a public sale for such property. Existing law sets the threshold as $700 for personal property abandoned at the end of a residential lease. This bill’s threshold for property abandoned at a self-storage unit is $300. This lower threshold is warranted because the value of items left in storage facilities is usually low. By lowering the amount, it increases the likelihood that a public sale occurs and the former occupant may receive excess proceeds.

This bill establishes a process for changing the terms of self-service storage rental agreements. Most self-storage rental agreements are month-to-month. The Act is currently silent on the process for changing the terms of a rental agreement. This bill establishes a process whereby the owner is required to provide the tenant with at least 30 days between service of the notice modifying the terms and the effective date of those terms. The terms would be binding on the tenant if the tenant continued to store personal property after the effective date of the modified terms.

ARGUMENTS IN SUPPORT: The Self Storage Association and the California Self Storage Association, sponsors of this measure, argue that AB 1916 would resolve uncertainty under existing law:

AB 1916 uses two existing provisions in the Civil Code as a model to resolve the uncertainty in the Act. First, existing provisions of the Civil Code (CC 1983, et seq.) set forth a process for addressing property abandoned by occupants at the end of a lease term. AB 1916 simply mirrors many of the key provisions from current law, but tailors the proposal to self storage rentals and includes it in the Act.

Also, it should be noted that this proposed process for abandoned property is similar to the Act’s existing process when an occupant fails to pay rent and the owner must enforce its lien rights. Importantly, the process maintains key consumer protections including notice to the occupant and any alternative contact identified in the rental agreement, an opportunity to remove their property within a specified time, and, if applicable, return to the occupant of any excess proceeds from the sale.

More specifically, under AB 1916, when personal property remains at the self storage facility after the tenancy has been terminated, the self storge owner must provide written notice to the former occupant. The notice must describe the property in a manner reasonably adequate to permit the former occupant to identify it. The notice must also advise the former occupant of where the property may be claimed and the date before which the claim must be made. The date specified in the notice must be a date not less than 15 days after the notice is personally delivered or emailed, or, if mailed, not less than 18 days after the notice is deposited in the mail. AB 1916 further provides that the notice must either inform the former occupant that if the property is not reclaimed, the self storage owner will sell it at a public sale or otherwise dispose of the property.

Additionally, as noted earlier, the Act is currently silent on the process for changing the terms of the rental agreement. To address this, AB 1916 proposes Civil Code 827 as a foundation for establishing a process for changing the terms of self storage rental agreements. This process would require the owner to provide the occupant with at least 30 days between service of the notice modifying the terms and the effective date of those terms. The terms would be binding on the occupant if the occupant continued to store personal property after the effective date of the modified terms, even if the occupant did not sign the rental agreement.

REGISTERED SUPPORT / OPPOSITION:

Support

California Self Storage Association

Self Storage Association

Opposition

None on file

Analysis Prepared by: Shiran Zohar / JUD. / (916) 319-2334