Relates to the enforcement of liens by sale of the occupant's goods that remain in a self-storage facility

◆ The sponsor's argument

Why Andrew Gounardes says this is needed

Self-storage facilities are governed under Section 182 of the Lien Law, which grants the facility owner a lien on the property stored at the self-storage facility for rental fees owed to them by the occupant. In the event that the occupant is unable to pay the monthly fees, the self- storage facility owner has the right, subject to compliance with certain procedural requirements, to conduct a sale of the items to defray outstanding and unpaid fees. Section 182 of the Lien Law does not expressly state that lien enforce- ment sales are permitted to take place online. Historical practice was to conduct auctions in front of the storage units with groups of bidders and a physical auctioneer on site to officiate the process. Over the last few years, however, it has become common to hold auctions online. Because Lien Law Section 182 is silent on this matter, it is left to court interpretation as to whether an online auction meets the standard of "commercially reasonable" provided in such section. This bill would modernize this aspect of the law by amending Section 182 to explicitly allow online advertising and online auctions. This expands upon the sole existing option for advertising of upcoming lien sales in Section 202 of Lien Law, which mandates that the sale must be advertised in a newspaper that is published in the town or city where the sale is to be held once per week for two consecutive weeks. Newspaper circulation has gone down in recent years, leaving lien sales with fewer bidders, less competition, and lower bids which in turn means less proceeds to offset unpaid occupant debt. Providing an online option for both advertising and the auctions themselves would drive more poten- tial bidders to sales and would align New York with the 28 other states that expressly permit online auctions in their self-storage lien laws. This bill would also explicitly provide an option for a property owner to have a motor vehicle towed from a storage space rather than selling it at a lien sale. Towing operators are accustomed to handling abandoned vehicles and better understand the process to search for other lienhold- ers on the vehicle. This experience could potentially help the storage client avoid damaging their credit rating by allowing the vehicle to be returned to the other lienholder.

This is the sponsor's own case for the bill, quoted from their memorandum. It is not Agora's description of what the bill does.