Thank You to Our Sponsors - Constant Contactfiles.constantcontact.com/abc29083101/49e19e73... · 3/21/2017 7 Regular Foreclosure Process pg 34-42 • STEP 10: ALLOW TENANT TO REDEEM

3/21/2017

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Thank You to Our Sponsors

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Announcements

• Housekeeping & introductions

• Real estate MCE credit

• Certificate requests

• Forms for sale (save shipping cost)

• Please complete seminar evaluations

• Today’s agenda and Q&A process

• Special meal requests

• Donate to the Shriners Hospital for Children

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Announcements

• Goldbook © pages referenced on slides

Follow the Conversation

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OVERVIEW:2016 – 2017 Goldbook©

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2016-2017 Goldbook© Changes

• New summarized steps for timeline

• New appendix forms

o MISC-7: Amendment for Change in Units

o BUS-20: Notice of Change in Permitted Payment Type

o BUS-21: Notice of Property Damage and Demand for Payment

• Sections removed from CD and are available online

o Business Property & Tax

o Criminal

o Federal

#TSSALegal

Legal Resources

• Goldbook©

• Electronic Goldbook© in Members Only section

• Resource Library (free webinars & podcasts)

• Free Auction Posting (auction.txssa.org)

• Ask The Experts Legal Questions

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Pop Quiz

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Connie Heyer

Attorney-at-Law

Niemann and Heyer, LLP (Austin)

The legal opinions expressed today are those of TSSA legal counsel.

Other attorneys may have different opinions. #TSSALegal

Texas Legislative Session

LEGISLATIVE UPDATE:What to expect for the 2017 Session • Ad valorem tax• Online auctions• Other bills affecting self storage

OVERVIEW:Self-Storage Lien Law & Foreclosure Process

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Understanding the Basic

Legal Issues in Self Storage

Understanding the Basic

Legal Issues in Self Storage

• Self Storage vs. Warehouse

• Automatic Lien & Priority of Lien

• Seizure

• Care/Custody/Control of Units

#TSSALegal

Regular Foreclosure Process

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• STEP 1: CHECK LEASE FOR PARTICULARS

• STEP 2: SEIZE THE CONTENTS OF THE UNIT

Option #1: Cut the lock + Notice of Claim (N.O.C.)

OR

Option #2: Overlock

• STEP 3: WAIT ANY AMOUNT OF TIME (OR NONE)

pg 34-42

#TSSALegal


pg 34-42

• STEP 4: MAIL OR EMAIL NOTICE OF CLAIM

• STEP 5: WAIT AT LEAST 15 DAYS

• STEP 6: PUBLISH NEWSPAPER ADS

(Two ads, at least 7 days apart, but still in two consecutive weeks)

#TSSALegal


pg 34-42

• STEP 7: PUBLISH NEWSPAPER ADS NO SOONER THAN 15 DAYS AFTER N.O.C. SENT (OPTIONAL) MAIL NOTICE OF PUBLIC SALE VIA REGULAR MAIL OR EMAIL

• STEP 8: WAIT AT LEAST 15 DAYS AFTER FIRST AD RUNS

• STEP 9: CONDUCT THE PUBLIC AUCTION

#TSSALegal

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pg 34-42

• STEP 10: ALLOW TENANT TO REDEEM ANYTIME BEFORE “GAVEL FALLS”

• STEP 11: GIVE BUYER BILL OF SALE

• STEP 12: COLLECT SALES TAX (IF APPLICABLE)

#TSSALegal


pg 34-42

• STEP 13: IF EXCESS PROCEEDS, SEND NOTICE TO TENANT VIA REGULAR OR CERTIFIED MAIL (If requested by tenant, send excess proceeds. If not requested by

tenant, hold excess proceeds for two years.)

• STEP 14: KEEP ALL RECORDS ON FORECLOSURE SALES FOR

FOUR YEARS

#TSSALegal

Special Foreclosure Process

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How is the Process Different?

• You must determine registered ownership (TDMV or TPWD)

• Lienholder may be involved

• If there is a lienholder, then a separate notice must be given

• Two notices are required

• Provide buyer with original documents at auction to register vehicle/boat

• Do not charge sales tax to buyer; buyer pays when registering

#TSSALegal


What is a Vehicle?

• Trailer, Car, Truck, RV

• Essentially, “anything required to be registered”

• ATV

• Motorcycle

• Includes boat trailers

• Golf carts are NOT “vehicles”

#TSSALegal


• STEP 1: CHECK LEASE FOR PARTICULARS

(Note: Some like to determine ownership information now)

• STEP 2: “SEIZE” UNIT OR VEHICLE BY OVERLOCKING + N.O.C., CUTTING LOCK, OR WHEELBOOTING/CHAINING IF OUTSIDE

(Or coding out + N.O.C.)

• STEP 3: WAIT ANY AMOUNT OF TIME (OR NONE)

pg 46-59 pg 63-77

#TSSALegal

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pg 46-59 pg 63-77

• STEP 4: MAIL OR EMAIL NOTICE OF CLAIM TO TENANT

• STEP 5: GET OWNER & LIENHOLDER INFO:• FOR BOATS: Use TPWD form 763 • FOR VEHICLES: Use TDMV official form VTR-275

#TSSALegal


pg 46-59 pg 63-77

• STEP 6: NOT MORE THAN 30 DAYS AFTER SEIZURE, MAIL “NOTICE OF INTENT TO SELL” VIA VERIFIED MAIL TO REGISTERED OWNER & LIENHOLDER(Can be sent when N.O.C. is sent)

• STEP 7: PUBLISH NEWSPAPER ADS (Same rules for ads as REGULAR foreclosure)

#TSSALegal


pg 46-59 pg 63-77

• STEP 8: (OPTIONAL) MAIL NOTICE OF PUBLIC SALE TO TENANT

• STEP 9: WAIT AT LEAST 31 DAYS AFTER SENDING NOTICE OF INTENT TO SELL AND UNTIL THE NEWSPAPER ADS HAVE BEEN PUBLISHED BEFORE HAVING AUCTION

#TSSALegal

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pg 46-59 pg 63-77

• STEP 10: CONDUCT THE PUBLIC AUCTION

• STEP 11: TENANT CAN REDEEM ANYTIME BEFORE GAVEL FALLS

• STEP 12: LIENHOLDER CAN REDEEM WITHIN SPECIFIC PERIOD OF TIME (W/IN 31 DAYS AFTER NOTICE)

#TSSALegal


pg 46-59 pg 63-77

• STEP 13: GIVE BUYER BILL OF SALE

• STEP 14: GIVE BUYER ALL NECESSARY DOCUMENTS TO TRANSFER OWNERSHIP, INCLUDING:• FOR BOATS: TPWD Affidavit Form PWD 308 • FOR VEHICLES: TDMV official form VTR-265-SSF

#TSSALegal


pg 46-59 pg 63-77

• STEP 15: DO NOT COLLECT SALES TAX

• STEP 16: IF EXCESS PROCEEDS, SEND NOTICE TO TENANT (Hold excess proceeds for 2 years; send if requested)

• STEP 17: KEEP RECORDS• FOR BOATS: 4 years• FOR VEHICLES: 5 years

#TSSALegal

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Question

What if lienholders want to redeem their property (boats or vehicles)?

#TSSALegal

Alternatives to Foreclosure


Eviction• When to evict vs. foreclose (GB page 238)

• Affidavit of military status (see Appendix CD form E-7)

• Step-by-Step Procedures for Evicting (GB page 239-242)

pg 239-242

#TSSALegal

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Abandonment Defined (lease paragraph 26)

Notice of Abandonment (see Appendix CD form MISC-3)

Authorization and/or Release form (official form, GB page 281)

Is it OK to have an abandonment pre-agreement?

#TSSALegal


Using Collection Agencies • Final Notice Before Collection Agency Fees Charged

(see Appendix CD form BUS-10)

pg 210

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Make a Deal

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Common Questions

About Foreclosure

• What about tenants who don’t want to provide email?

• We don’t trust email. Is it okay to still send notice of claim via certified mail?

• Can I text a tenant about his account?

Common Questions

About Foreclosure

#TSSALegal

• Is an inventory of the contents for delinquent units required?

• Must I use an auctioneer for the sale?

• Do I need auction rules?

• Can the tenant bid at the auction?

• Who can bid at the auction? What if no one bids on a unit?

Common Questions

About Foreclosure

#TSSALegal

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What items CANNOT be sold at auction?

• Beer, liquor, wine

• Food, drugs, cosmetics, medical devices

pg 23-24

Common Questions

About Foreclosure

#TSSALegal

What items CANNOT be sold at auction?

• Firearms, such as semi-automatic assault weapons, machine

guns, sawed-off shotguns, guns with a silencer

• Illegal weapons (brass knuckles or spike strips)

pg 30

Common Questions

About Foreclosure

#TSSALegal

Q&A: Foreclosure Process

#TSSALegal

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Upcoming Events

Houston LuncheonMay 11

August 10

Big Ideas in Storage Annual Conference October 18-20, 2017

San Antonio Convention Center

#TSSALegal

Part 2#TSSALegal

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TECHNOLOGYand Its Impact on Self Storage

• Is it okay to do online-only auctions?

• Online leasing (if opt-out, then are paper leases available?)

• E-signatures: Are they valid?

Technology and Its Impact on

Self Storage

#TSSALegal

• Paperless record keeping

• How can I prove that email notices are sent/received?

• Management software considerations

• Data security duties

Technology and Its Impact on

Self Storage

#TSSALegal

3/21/2017

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Question

Is texting allowed for giving notice?

#TSSALegal

BEST PRACTICESand Operational Tips for Common Issues

The TSSA Lease

• Notifying your tenants of change in lease

• Does tenant have to sign?

• Caution about policies in conflict with the lease

Best Practices and

Operational Tips

#TSSALegal

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Most Important Provisions of the Lease

• Who should sign a lease?

• Tenants’ and others’ access rights (TSSA Lease ¶1)

• Change in language for access rights person & lessor’sonline form option for change of address

Best Practices and

Operational Tips

#TSSALegal

Accessing the Unit

• Keeping vacant units locked

• Tenant adding or changing units

• Tenant wanting to “turn over” unit to another party

Best Practices and

Operational Tips

#TSSALegal

Accessing the Unit

• Powers of attorney

• Court orders

Best Practices and

Operational Tips

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Lessor’s Right of Entry TSSA Lease ¶18

• Emergency, Health Hazard, Imminent Danger

• Suspicion of Criminal Activity

• Inspection, Repair, Improvement, Casualty Loss (after written request)

• Tenant in default

Best Practices and

Operational Tips

#TSSALegal

Relocation of ContentsTSSA Lease ¶18

• Seizure because of foreclosure

• Protect from loss or damage

• Tenant liable for reasonable storage charges

• Tenant has access, except when in default

Best Practices and

Operational Tips

#TSSALegal

Tenant Bankruptcy

• Hire an attorney

• Strike a deal (Ch. 11 or 13 vs. Ch. 7)

• Proof of claim

• Post-bankruptcy rents

• Tenant “claims” bankruptcy filed

Best Practices and

Operational Tipspg 115-116

#TSSALegal

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Question

A tenant filed bankruptcy. I contacted the trustee and he said that the case was dismissed. Now, I can’t get in touch with the tenant.

Am I at risk if I foreclose on the unit? The unit has mostly junk, but there is a camper.

#TSSALegal

Deceased Tenants

• Certainties: (1) death, (2) taxes, (3) storage rent

• Estate liable

• Emergency contact

• Affidavit for Removal of Property… (see Appendix CD form MISC-2)

• Practical business decision

Best Practices and

Operational Tipspg 200

#TSSALegal

Question

The son & daughter of a deceased tenant do not want the contents of his unit, including a boat and trailer.

What should I do?

#TSSALegal

3/21/2017

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Question

Who has more rights to the unit of a deceased tenant?

ANSWER:

(A) The executor

(B) The access rights person

(C) The emergency contact person

#TSSALegal

Incarcerated or Incapacitated Tenants

• Emergency contact

• Affidavit for Removal of Property… (see Appendix CD form MISC-2)

Best Practices and

Operational Tips

#TSSALegal

Military Tenants

Best Practices and

Operational Tips

#TSSALegal

3/21/2017

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Dealing with Military Tenants

• Importance of gathering information at time of rental

• Photocopying military IDs is PROHIBITED

• Foreclosures and evictions on military tenants and their spouses

Best Practices and


#TSSALegal

Dealing with Military Tenants

• Military Waiver (see Appendix CD form ADD-4)

• You may require proof of active duty status

• Consider DOD check prior to any foreclosure (need SSN & DOB)

Best Practices and


#TSSALegal

Law EnforcementTSSA Lease ¶19

• Officer MUST present a search warrant

• No warrant, no unit entry

• Open unit or allow law enforcement to open

Best Practices and

Operational Tips

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Criminal Searches & Police Seizure of Stolen Property

• No warrant, no unit entry

• Superior lien rights

• Sharing information with law enforcement?

• Your paragraph 18 rights

• Suspicious of criminal activity?

Best Practices and


#TSSALegal

Handling the Repo Man • We cannot let you in; no legal authority

• We do not, as policy, disclose tenant’s unit #s

• We welcome your $; it will stop the collection process/auction sale

• Talk with your tenant

Best Practices and

Operational Tips

#TSSALegal

Tenant Records and Privacy Issues

• Business records are your property

• Sample privacy policy (pg 172)

• Privacy policy for websites

• Dealing with third parties and sensitive information

Best Practices and


#TSSALegal

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Tenant Records and Privacy Issues

• Sensitive documents stored by tenants (medical or legal records)

• Self storage is not equivalent to a document storage company;

hence, HIPAA agreements do not apply

Best Practices and

Operational Tips

#TSSALegal

Credit Card Security

• PCI/SSC compliance requirements

• Merchant services agreement

Best Practices and


#TSSALegal

Partial Payments

• Why partial payment agreements are critical (Appendix CD form PP-1)

• Dealing with pre-paid rent and refunds; special rates tied to pre-paid rent

Best Practices and

Operational Tips

#TSSALegal

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Renting to Businesses

• Tips for renting to businesses

• Delinquent tenants storing property used in running a business (no special rules)

• But be careful…

Best Practices and


#TSSALegal

Pest Control

• Apply your own pesticide or hire a licensed professional?

• Treating units, both leased and vacant

• Treating workplaces

Best Practices and

Operational Tipspg 208

#TSSALegal

Guidelines for Break-ins

• Secure the unit

• Notify the tenant

• Complete an incident report

• Tenant notifies police and their insurance company

Best Practices and


#TSSALegal

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LIABILITY and Other Important Issues

Sales Tax • Vehicle & Trailer Parking/Storage

• Sale of goods/merchandise

• Services

• Giveaways

• POD rentals

Liability and

Other Important Issuespg 220-225

#TSSALegal

Americans with Disability Act (ADA)

• 1991 standards vs 2010 standards (effective March 15,2012)

• “Readily achievable” test

o Easily accomplished and able to be carried out w/out much difficulty/expense

• Scoping requirements (how many units meet standards)o 200 or < units, 5% accessible

o > 200 units, 10 units, plus 2% of # of units over 200 accessible

• Dispersion requirements (what kind of units meet standards) o Accessible units in each “class” of unit

Liability and


#TSSALegal

3/21/2017

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Smoke Alarms in On-Site Residences

• Smoke alarms in every bedroom (effective Jan 1, 2013)

• In good working order

• Duty to inspect & repair

Liability and


#TSSALegal

Credit or Background Checks

• Permission from tenant?

• Federal Fair Credit Reporting Act (FFCRA)

• “Adverse action” requirements

Liability and


#TSSALegal

Credit Card Fraud Liability Law • EMV (chip card) is the new standard

• Businesses that have not upgraded to EMV payment terminals will be liable for

fraud that occurs on an EMV-ready credit card

• Shift in liability in the credit card policies and not a change in the law

Liability and


#TSSALegal

3/21/2017

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LEGAL CASES and Trends

• Class action lawsuit regarding insurance Bowe v. Public Storage

• Unpaid overtime lawsuitAlford v. Metro Mini Storage, Inc. et al.

Legal Cases

#TSSALegal

Group Activity

#TSSALegal

3/21/2017

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Group Activity

Scenario 1: Delinquent tenant left behind old TVs to

cover any remaining rent

Scenario 2: Delinquent tenant with vehicle and a

separate motor in the unit

Scenario 3: Units with no lease being used to store

seized items

#TSSALegal

Open Q&A

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Thank You to Our Sponsors

Thank you for attending!

Please complete the seminar evaluation.

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Documents

Thank You to Our Sponsors - Constant Contactfiles.constantcontact.com/abc29083101/49e19e73... · 3/21/2017 7 Regular Foreclosure Process pg 34-42 • STEP 10: ALLOW TENANT TO REDEEM