What SSA Has Done for You Lately: A Mid-Year Legal & Legislative Report

During this year of turmoil, the SSA has been busy advocating for, protecting, and educating owners and operators. Below is a mid-year summary of our accomplishments on your behalf. Please email Joe Doherty or Daniel Bryant with any questions.

Affirmative Agenda

Despite the challenges presented by the pandemic, the industry has secured important reforms in some states and legislation remains active in a few other states.

Idaho: Gov. Brad Little signed a bill adopting most of SSA’s lien law priorities, including alternatives to certified mail and reducing the required number of newspaper advertisements from two to one. The new law took effect on July 1. Visit here to purchase SSA’s Idaho lien law manual with analysis of the law and suggested checklists, timelines, and forms.

Mississippi: Gov. Tate Reeves signed a bill adopting all of SSA’s lien law priorities, including verified mail or email in lieu of certified mail and eliminating the newspaper advertising requirement. The new law took effect on July 1. Visit here to purchase SSA’s Mississippi lien law manual with analysis of the law and suggested checklists, timelines, and forms.

Tennessee: Thanks to the efforts of the Tennessee Self Storage Association, Gov. Bill Lee signed a bill eliminating the newspaper advertising requirement and expressly permitting online lien sales. The new law took effect on July 1. Visit here to purchase SSA’s Tennessee lien law manual with analysis of the law and suggested checklists, timelines, and forms.

Vermont: The Vermont Department of Financial Regulation adopted a regulation authorizing the sale of tenant insurance.

Lien law reform bills are still under consideration in California, Ohio, Pennsylvania, South Carolina, and Vermont. A tenant insurance bill is still under consideration in Rhode Island.

COVID-related Legislation and Its Effects on Self Storage

The pandemic crisis has caused a few direct legislative threats to the industry; mostly from municipal governments. Four California localities – Livermore, Los Angeles, Ontario, and Pasadena – have passed legislation expressly affecting the lien rights of self storage operators. Our efforts, including the engagement of local lobbyists and attorneys, have also diffused direct threats in Prince George’s County, Md. and Newark, NJ. Finally, we have monitored and reported to members on the potential effects of legislation and executive orders restricting evictions, landlords’ remedies and construction projects.

Los Angeles: SSA engaged a lobbyist in Los Angeles who, along with several members that operate in Los Angeles, vocally opposed a proposed ordinance to stop lien sales. Although the City Council passed an ordinance targeting self storage, the industry’s efforts persuaded the City Attorney’s Office to draft a narrow ordinance that protects only those tenants that provide documentation of a COVID-related reason for non-payment within seven days of the payment due date. The ordinance does not expressly prohibit lockouts or otherwise affect operators’ lien rights.

Livermore, Ontario, and Pasadena: SSA has engaged outside counsel to advocate on the industry’s behalf in these three cities. We hope to have a further update soon.

Prince George’s County, Md.: The Prince George’s County Council introduced legislation to restrict lien sales, lockouts, late fees, and rate increases, as well as residential evictions. SSA’s Maryland-based lobbyist, Bruce Bereano, quickly responded to the legislation and was successful in convincing the Council to remove any references to self storage from the ordinance.

State and local eviction moratoriums: Numerous states, counties, and cities have adopted, typically through executive order, eviction moratoriums and other restrictions on landlord remedies. Notable examples include Nevada, Oregon, Massachusetts, and North Carolina. Although these orders have not expressly referred to self storage, their language is often broad enough to at least arguably apply to self storage lien sales, late fees, and lockouts. Given the uncertainty, we have generally encouraged members to abide by these orders in order to avoid more direct threats against the industry.

SSA’s Rapid Response to Other Government Actions

As you were called to do for your businesses and tenants, SSA was called to provide a rapid response to confront the challenges presented by federal, state, and local government actions. The following are some highlights:

• Providing in-depth analysis of business closure, shelter-in-place, and related orders;
• Supporting the industry’s status as an essential business and interacting with state and local governments to combat threats to shut members’ businesses (e.g., in New Mexico, New York, and Newark, NJ);
• Helping the industry to understand the pricing restrictions that apply during a state of emergency;
• Holding several webinars to discuss the latest legal trends. Each of these webinars attracted 350-500 attendees; and
• Conducting Zoom meetings with boards and members from several SSA-managed and chartered state associations.

Other Defensive Agenda

We are also playing defense on a few matters that are unrelated to the pandemic.

California Property Tax Split Roll: In November, California voters will consider a ballot initiative to repeal the longstanding tax limitations established by Proposition 13. If passed, most California commercial and industrial properties would be reassessed to fair market value at least every three years, rather than only upon a change of ownership, as established by Proposition 13. Independent analyses have estimated that the tax burden on commercial and industrial properties would increase between $7.5 billion and $12 billion if so-called “split roll” were adopted.

SSA and CSSA, and their Property Protection Task Force, co-chaired by Brian Caster and Ken Nitzberg, have spearheaded the industry’s response. We anticipate that self storage operators that will contribute $2 - $3 million in opposition to the split roll measure. Click here to learn more and contribute to the opposition. Please email Joe Doherty with any questions.

Miami: The City Commission is considering an ordinance that would require all storage facilities in the City to provide bulk waste disposal to their tenants. The bill also threatens to hold facilities liable for any dumping within a one-mile radius if it can be proved that the dumping “originated” from the facility. We have engaged a Miami-based lobbyist and were successful in removing from the bill a requirement that the facility provide the bulk waste disposal at no cost to the tenant. The bill was on the agenda for the agenda for the Commission’s July 23, but the bill sponsor agreed to a six-month deferral of the ordinance. We will continue to oppose this ordinance.

New York: As the pandemic was setting in, the New York State legislature hastily passed a budget, with virtually no transparency or public input. The budget included a provision that singled out self storage and removed the ICAP tax abatement for development of self storage facilities in NYC, unless the development was permitted as of July 1, 2020. In effect, given that the permitting process virtually stopped during the pandemic, this meant that projects that were unpermitted when the budget passed in March had, at best, a very narrow window to qualify for ICAP.

A major storage developer in NYC sought an injunction to stop the changes from taking effect on July 1. The trial judge denied the injunction request.

NYSSA and SSA are supporting legislation that would change the trigger to qualify for ICAP from the need to have a building permit as of July 1, 2020 to the need to have submitted a preliminary application for the ICAP program by July 1, 2020.

Maryland: We successfully opposed two tax bills – one that would have imposed a tax on virtually all services and the other that would have imposed a tax on certain storage rents.

Nebraska: As we have done for the last few legislative sessions, we are opposing a bill to tax currently untaxed products and services, including self storage rents. Although the bill is officially alive, it is unlikely to pass, and the Governor has vowed to veto the bill if it passes.

Illinois: We successfully advocated to narrow the scope of the regulations interpreting a new statewide parking tax. Most significantly, based on our advocacy, the tax only applies to enclosed storage units when the operator knows at the time of rental that the tenant will store a vehicle, and the tax does not apply to the storage of watercraft.

Utah: At the end of 2019, we successfully opposed a tax on self storage rents.

Thank you for your ongoing support during this unsettled time. Please email Joe or Daniel with any questions about this report.