Senate File 528 - Reprinted SENATE FILE 528 BY COMMITTEE ON COMMERCE (SUCCESSOR TO SSB 1200) (As Amended and Passed by the Senate March 28, 2019 ) A BILL FOR An Act relating to self-service storage facilities, including 1 the creation and enforcement of liens on personal property 2 within leased spaces. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 SF 528 (3) 88 asf/jh/mb
S.F. 528 Section 1. NEW SECTION . 578B.1 Short title. 1 This Act shall be known as the “Self-Service Storage 2 Facilities Act” . 3 Sec. 2. NEW SECTION . 578B.2 Definitions. 4 As used in this chapter, unless the context clearly requires 5 otherwise: 6 1. “Commercially reasonable sale” means a sale that is 7 conducted at the self-service storage facility, at the nearest 8 suitable place to where the personal property is held or 9 stored, or on a publicly accessible internet site that conducts 10 sales or auctions. 11 2. Default” means the failure by the occupant to perform on 12 time any obligation or duty set forth in a rental agreement or 13 this chapter. 14 3. “Emergency” means any sudden, unexpected occurrence 15 or circumstance at or near a self-service storage facility 16 that requires immediate action to avoid injury to persons 17 or property at or near the self-service storage facility, 18 including a fire. 19 4. “Last-known address” means the postal address or 20 electronic mail address provided by an occupant in a rental 21 agreement or the postal address or electronic mail address 22 provided by the occupant in a subsequent written notice of a 23 change of address. 24 5. “Late fee” means any fee or charge assessed for an 25 occupant’s failure to pay rent when due. “Late fee” does not 26 include interest on a debt, reasonable expenses incurred in 27 the collection of unpaid rent, or costs associated with the 28 enforcement of any other remedy provided by law or contract. 29 6. “Leased space” means individual storage space at a 30 self-service storage facility which is rented to an occupant 31 pursuant to a rental agreement. 32 7. “Occupant” means a person entitled to the use of leased 33 space at a self-service storage facility under a rental 34 agreement or the person’s successors or assigns. 35 -1- SF 528 (3) 88 asf/jh/mb 1/ 11
S.F. 528 8. “Operator” means the owner, operator, lessor, or 1 sublessor of a self-service storage facility or an agent or any 2 other person authorized to manage the facility. “Operator” does 3 not include a warehouse worker if the warehouse worker issues a 4 warehouse receipt, bill of lading, or other document of title 5 for the personal property stored. 6 9. “Personal property” means movable property not affixed 7 to land, including goods, wares, merchandise, motor vehicles, 8 watercraft, household items, and furnishings. 9 10. “Property that has no commercial value” means property 10 offered for sale in a commercially reasonable sale that 11 receives no bid or offer. 12 11. “Rental agreement” means an agreement or lease, written 13 or oral, that establishes or modifies the terms, conditions, 14 or rules concerning the use and occupancy of leased space at a 15 self-service storage facility. 16 12. “Self-service storage facility” means real property 17 designed and used for the purpose of renting or leasing 18 individual storage space to occupants who are to have access 19 to the space for the purpose of storing personal property. If 20 an operator issues a warehouse receipt, bill of lading, or 21 other document of title for the personal property stored, the 22 operator and occupant are subject to chapter 554, article 7, 23 and this chapter does not apply. 24 13. “Verified mail” means any method of mailing offered by 25 the United States postal service or private delivery service 26 that provides evidence of the mailing. 27 Sec. 3. NEW SECTION . 578B.3 Facility not residence. 28 1. An operator shall not knowingly permit a leased space 29 at a self-service storage facility to be used for residential 30 purposes. 31 2. An occupant shall not use a leased space for residential 32 purposes. 33 Sec. 4. NEW SECTION . 578B.4 Notice and consent for 34 inspection and repair. 35 -2- SF 528 (3) 88 asf/jh/mb 2/ 11
S.F. 528 Unless otherwise provided in a rental agreement, an 1 occupant, upon reasonable request from the operator, shall 2 allow the operator to enter a leased space for the purpose of 3 inspection or repair. If an emergency occurs, an operator may 4 enter a leased space for inspection or repair without notice to 5 or consent from the occupant. 6 Sec. 5. NEW SECTION . 578B.5 Lien —— late fee —— electronic 7 communication permitted. 8 1. The operator of a self-service storage facility and the 9 operator’s heirs, executors, administrators, successors, and 10 assigns shall have a lien upon all of an occupant’s personal 11 property located at the self-service storage facility for 12 delinquent rent, late fees, labor, or other charges incurred 13 pursuant to a rental agreement and for expenses incurred for 14 preservation, sale, or disposition of the personal property. 15 The lien established by this subsection shall have priority 16 over all other liens and security interests except for those 17 perfected prior to the time the personal property is brought to 18 the self-service storage facility. 19 2. The lien described in subsection 1 attaches on the date 20 on which personal property is brought to the self-service 21 storage facility. 22 3. If the rental agreement specifies a limit on the value 23 of personal property that the occupant may store in the leased 24 space, such limit shall be deemed to be the maximum value of 25 the personal property in the occupant’s leased space. 26 4. A rental agreement under this chapter may provide for a 27 reasonable late fee for failure of the occupant to timely make 28 payments for the leased space when due. A monthly late fee of 29 twenty dollars or twenty percent of the monthly rental amount, 30 whichever is greater, shall be reasonable and is not a penalty. 31 5. The operator and occupant may agree to use electronic 32 mail to satisfy all notice requirements under this chapter. 33 The parties, if consenting to use electronic mail for notice, 34 must consent to use electronic mail for all notices. If the 35 -3- SF 528 (3) 88 asf/jh/mb 3/ 11
S.F. 528 parties agree, the rental agreement shall contain a section 1 outlining the rights and duties for each party regarding the 2 use of electronic mail. 3 Sec. 6. NEW SECTION . 578B.6 Right to deny access due to 4 default. 5 If the occupant is in default, the operator shall have the 6 right to deny the occupant access to the leased space at the 7 self-service storage facility if such right is set forth in the 8 rental agreement. 9 Sec. 7. NEW SECTION . 578B.7 Enforcement of lien. 10 1. If an occupant is in default for a period of at least 11 thirty days, the operator may enforce the lien granted in 12 section 578B.5 by selling the occupant’s personal property. 13 Sale of the occupant’s personal property may be by public or 14 private proceedings. Such personal property may be sold as a 15 unit or in parcels, by way of one or more contracts, at any time 16 or place, and on any terms as long as the sale is commercially 17 reasonable. The operator may otherwise dispose of any property 18 that has no commercial value. 19 2. Before conducting a sale under this section, the operator 20 shall do all of the following: 21 a. Send notice of default to the occupant by hand mail, 22 verified mail, or electronic mail pursuant to subsection 7. 23 The notice of default shall include all of the following: 24 (1) A statement of the operator’s claim showing that the 25 amount due at the time of the notice and the date when the 26 amount became due. 27 (2) A brief and general description of the personal property 28 subject to the lien. The description shall be reasonably 29 adequate to permit the occupant to identify the property, 30 except that any container including a trunk, valise, or box 31 that is locked, fastened, sealed, or tied in a manner which 32 deters immediate access to the container’s contents shall be 33 described as such and shall omit a description of the contents. 34 (3) A demand for payment of the charges due within a 35 -4- SF 528 (3) 88 asf/jh/mb 4/ 11
S.F. 528 specified time, which shall not be less than fourteen days 1 after the date of the notice. 2 (4) A statement that unless the claim is paid within the 3 time stated, the contents of the occupant’s leased space will 4 be sold or otherwise disposed of after a specified time. 5 (5) The name, street address, and telephone number of the 6 operator or a designated agent whom the occupant may contact to 7 respond to the notice. 8 b. Notify all persons whom the operator has actual knowledge 9 who claim a security interest in the personal property. An 10 operator shall conduct a search to determine whether there 11 is a security interest in property subject to sale if the 12 property is registered under chapter 321 or 462A. At least 13 seven days before the sale, the operator shall also advertise 14 the time, place, and terms of the sale in a commercially 15 reasonable manner. The manner of advertisement is deemed 16 commercially reasonable if it is likely to attract at least 17 three independent bidders to attend or view the sale in person 18 or online at the time and place advertised. The operator may 19 buy the occupant’s personal property at any public sale held 20 pursuant to this section. 21 3. If the personal property subject to the operator’s lien 22 is a vehicle, watercraft, or trailer, and rent or other charges 23 remain due and unpaid for thirty days, the operator may have 24 the vehicle, watercraft, or trailer towed from the self-service 25 storage facility. The operator shall not be liable for any 26 damages to the vehicle, watercraft, or trailer once the tower 27 takes possession of the property. Removal of any vehicle, 28 watercraft, or trailer from the self-service storage facility 29 shall not release the operator’s lien. 30 4. At any time before a sale is held under this section or 31 before a vehicle, watercraft, or trailer is towed under this 32 section, the occupant may pay the amount necessary to satisfy 33 the lien and redeem the occupant’s personal property. 34 5. In the event of a sale under this section, the operator 35 -5- SF 528 (3) 88 asf/jh/mb 5/ 11
S.F. 528 may satisfy the lien from the proceeds of the sale, but shall 1 hold the balance, if any, for a period of ninety days for 2 delivery on demand to the occupant. If the occupant does not 3 claim the balance within ninety days, the balance shall be paid 4 to the county treasurer in the county where the self-service 5 storage facility is located. The county treasurer shall hold 6 the funds for a period of two years. If a claim is not made by 7 the owner of the fund, then the fund shall become the property 8 of the county. There shall be no further recourse by any 9 person against the operator for an action pursuant to this 10 section. 11 6. A purchaser in good faith of any personal property sold 12 to satisfy a lien under this chapter takes the property free of 13 any rights of persons against whom the lien was valid, despite 14 noncompliance by the operator with the requirements of this 15 chapter. The purchaser of a motor vehicle shall apply for a 16 new title to the vehicle by the procedures outlined in section 17 321.47. For all other property which has a written title, 18 the purchaser shall follow the applicable procedures for the 19 property for the transfer of title by operation of law. 20 7. Notice to the occupant under subsection 2, paragraph 21 “a” , shall be sent to the occupant’s last-known address by hand 22 delivery, verified mail, or electronic mail. Notices sent 23 by hand delivery shall be deemed delivered when the occupant 24 has signed an acknowledgment of delivery. Notices sent by 25 verified mail shall be deemed delivered when deposited with the 26 United States postal service or private delivery service if the 27 notices are properly addressed with postage prepaid. Notices 28 sent by electronic mail shall be deemed delivered when an 29 electronic mail is sent to the last-known address provided by 30 the occupant. If the operator sends notice by electronic mail 31 and receives an automated message stating that the electronic 32 mail cannot be delivered, the operator shall send notice by 33 hand delivery or by verified mail to the occupant’s last-known 34 address with postage prepaid. 35 -6- SF 528 (3) 88 asf/jh/mb 6/ 11
S.F. 528 8. If the operator complies with the requirements of this 1 section, the operator’s liability: 2 a. To the occupant, shall be limited to the net proceeds 3 received from the sale of the occupant’s personal property 4 less any proceeds paid to the holders of any lien or security 5 interest of record on the personal property being sold. 6 b. To the holders of any lien or security interest of record 7 on the personal property being sold, shall be limited to the 8 net proceeds received from the sale of the personal property 9 subject to the holder’s lien or security interest. 10 Sec. 8. NEW SECTION . 578B.8 Exclusive care, custody, and 11 control of personal property vested in occupant. 12 Unless the rental agreement specifically provides otherwise 13 and until a lien sale under section 578B.7, the exclusive care, 14 custody, and control of all personal property stored in a 15 leased space remains vested in the occupant. 16 Sec. 9. NEW SECTION . 578B.9 Supplemental nature of chapter. 17 This chapter does not impair the powers of the parties to a 18 rental agreement to create rights, duties, or obligations that 19 do not arise from this chapter. This chapter does not impair 20 or impact the rights of parties to create liens by special 21 contract or agreement, nor does it affect or impair other liens 22 arising at common law or in equity, or by a statute of this 23 state. The rights provided to an operator by this chapter are 24 in addition to all other rights provided by law to a creditor 25 against a debtor. 26 Sec. 10. NEW SECTION . 578B.10 Disclosure of flood zone. 27 The operator shall disclose in the rental agreement whether 28 the self-service storage facility is located in a “special 29 flood hazard area” as defined by the federal emergency 30 management agency in 44 C.F.R. pt. 61, Appendix A(3). 31 Sec. 11. NEW SECTION . 578B.11 Fire, flood, or other 32 catastrophic event damage or destruction. 33 If the self-service storage facility is damaged or destroyed 34 by a fire, flood, or other catastrophic event to the extent 35 -7- SF 528 (3) 88 asf/jh/mb 7/ 11
S.F. 528 that the leased space is rendered unusable, the operator 1 shall make a good faith effort to notify the occupant of the 2 event and the occupant may terminate the rental agreement by 3 giving the required notice in the rental agreement. If the 4 occupant terminates the rental agreement under this section, 5 the occupant shall remove all contents of the leased space as 6 soon as is reasonably practicable. Any prepaid rent is due to 7 the occupant upon removal of the occupant’s property from the 8 leased space. 9 Sec. 12. Section 321.20, subsection 1, unnumbered paragraph 10 1, Code 2019, is amended to read as follows: 11 Except as provided in this chapter , an owner of a vehicle 12 subject to registration shall make application to the county 13 treasurer of the county of the owner’s residence, or if a 14 nonresident, to the county treasurer of the county where the 15 primary users of the vehicle are located, or if a lessor of 16 the vehicle pursuant to chapter 321F which vehicle has a 17 gross vehicle weight of less than ten thousand pounds, to the 18 county treasurer of the county of the lessee’s residence, 19 or if a firm, association, or corporation with vehicles in 20 multiple counties, the owner may make application to the county 21 treasurer of the county where the primary user of the vehicle 22 is located, for the registration and issuance of a certificate 23 of title for the vehicle upon the appropriate form furnished 24 by the department. However, upon the transfer of ownership, 25 the owner of a vehicle subject to the apportioned registration 26 provisions of chapter 326 shall make application for issuance 27 of a certificate of title to either the department or the 28 appropriate county treasurer. The owner of a vehicle purchased 29 pursuant to section 578B.7 shall present documentation that 30 such sale was completed in compliance with that section. The 31 application shall be accompanied by a fee of twenty dollars, 32 and shall bear the owner’s signature. A nonresident owner 33 of two or more vehicles subject to registration may make 34 application for registration and issuance of a certificate 35 -8- SF 528 (3) 88 asf/jh/mb 8/ 11
S.F. 528 of title for all vehicles subject to registration to the 1 county treasurer of the county where the primary user of any 2 of the vehicles is located. The owner of a mobile home or 3 manufactured home shall make application for a certificate 4 of title under this section from the county treasurer of the 5 county where the mobile home or manufactured home is located. 6 The application shall contain: 7 Sec. 13. Section 321.20A, subsection 1, Code 2019, is 8 amended to read as follows: 9 1. Notwithstanding other provisions of this chapter , 10 the owner of a commercial vehicle subject to the apportioned 11 registration provisions of chapter 326 may make application 12 to the department or the appropriate county treasurer 13 for a certificate of title. The owner of a commercial 14 vehicle purchased pursuant to section 578B.7 shall present 15 documentation that such sale was completed in compliance 16 with that section. The application for certificate of title 17 shall be made within thirty days of purchase or transfer and 18 shall be accompanied by a twenty dollar title fee and the 19 appropriate fee for new registration. The department or the 20 county treasurer shall deliver the certificate of title to the 21 owner if there is no security interest. If there is a security 22 interest, the title, when issued, shall be delivered to the 23 first secured party. Delivery may be made using electronic 24 means. 25 Sec. 14. Section 321.23, subsection 1, paragraph a, Code 26 2019, is amended to read as follows: 27 a. If the vehicle to be registered is a specially 28 constructed vehicle, reconstructed vehicle, street rod, replica 29 vehicle, or foreign vehicle, such fact shall be stated in the 30 application. A fee of ten dollars shall be paid by the person 31 making the application upon issuance of a certificate of title 32 by the county treasurer. For a specially constructed vehicle, 33 reconstructed vehicle, street rod, or replica vehicle subject 34 to registration, the application shall be accompanied by a 35 -9- SF 528 (3) 88 asf/jh/mb 9/ 11
S.F. 528 statement from the department authorizing the motor vehicle 1 to be titled and registered in this state. The owner of a 2 specially constructed vehicle, reconstructed vehicle, street 3 rod, replica vehicle, or foreign vehicle purchased pursuant to 4 section 578B.7 shall present documentation that such sale was 5 completed in compliance with that section. 6 Sec. 15. Section 321.47, subsection 1, Code 2019, is amended 7 to read as follows: 8 1. If ownership of a vehicle is transferred by operation of 9 law upon inheritance, devise or bequest, dissolution decree, 10 order in bankruptcy, insolvency, replevin, foreclosure or 11 execution sale, abandoned vehicle sale, or when the engine of a 12 motor vehicle is replaced by another engine, or a vehicle is 13 sold or transferred to satisfy an artisan’s lien as provided 14 in chapter 577 , a landlord’s lien as provided in chapter 570 , 15 a self-service storage facility lien as provided in section 16 578B.7, a storage lien as provided in chapter 579 , a judgment 17 in an action for abandonment of a manufactured or mobile home 18 as provided in chapter 555B , upon presentation of an affidavit 19 relating to the disposition of a valueless mobile, modular, or 20 manufactured home as provided in chapter 555C , or repossession 21 is had upon default in performance of the terms of a security 22 agreement, the county treasurer in the transferee’s county of 23 residence or, in the case of a mobile home or manufactured 24 home, the county treasurer of the county where the mobile home 25 or manufactured home is located, upon the surrender of the 26 prior certificate of title or the manufacturer’s or importer’s 27 certificate, or when that is not possible, upon presentation 28 of satisfactory proof to the county treasurer of ownership 29 and right of possession to the vehicle and upon payment of a 30 fee of twenty dollars and the presentation of an application 31 for registration and certificate of title, may issue to the 32 applicant a registration card for the vehicle and a certificate 33 of title to the vehicle. A person entitled to ownership of 34 a vehicle under a decree of dissolution shall surrender a 35 -10- SF 528 (3) 88 asf/jh/mb 10/ 11
S.F. 528 reproduction of a certified copy of the dissolution and upon 1 fulfilling the other requirements of this chapter is entitled 2 to a certificate of title and registration receipt issued in 3 the person’s name. 4 Sec. 16. Section 462A.77, Code 2019, is amended by adding 5 the following new subsection: 6 NEW SUBSECTION . 10. The buyer of a vessel sold pursuant to 7 section 578B.7 shall present documentation that such sale was 8 completed in compliance with that section. 9 Sec. 17. Section 462A.82, subsection 1, Code 2019, is 10 amended to read as follows: 11 1. If ownership of a vessel is transferred by operation of 12 law, such as by inheritance, order in bankruptcy, insolvency, 13 replevin, or execution sale, or in compliance with section 14 578B.7, the transferee, within thirty days after acquiring the 15 right to possession of the vessel by operation of law, shall 16 mail or deliver to the county recorder satisfactory proof of 17 ownership as the county recorder requires, together with an 18 application for a new certificate of title, and the required 19 fee. A title tax is not required on these transactions. 20 Sec. 18. REPEAL. Chapter 578A, Code 2019, is repealed. 21 -11- SF 528 (3) 88 asf/jh/mb 11/ 11