Louisiana Laws on Self Storage Units
Louisiana does not regulate self storage facilities as warehouses unless they issue bills of lading and receipts for property stored there. If warehouse receipts are issued, then the self-storage facility will fall under Title 10 of Louisiana statues.
The occupant or lessee can use the storage space exclusively for almost any purpose, though Louisiana storage units cannot be used as a residence under any circumstances.
Self Storage Lien Law in Louisiana
Louisiana law allows the owner or manager of a self-storage facility to sell the occupant’s property to pay for past-due bills. The tenant can be forced to pay both the past due rent and costs for moving the property like replacement locks. Tenants must be informed in writing well before the property can be sold. The tenant can redeem his or her property up to the start of the auction.
Facility owners must inform the tenant when there is a bill past due and the full amount owed. Payment cannot be demanded less than ten days after the tenant received the bill. This law is in place to give the tenant a reasonable time period to raise the money to pay the bill before losing his or her property. An advertisement for the sale cannot be placed until at least ten days have passed from the date when the property owner was notified. Additional time is required if the tenant is a member of the military. Louisiana storage units rented by military members may fall under the federal Servicemembers Civil Relief Act. If in doubt, hold on longer before holding the auction and give the service member more time to receive the bill and pay it.
The storage service’s lien is generally the first lien against the property being sold. However, the storage service’s lien is second to any liens against the property being sold held by creditors. For example, if a car kept in storage is being sold, the money for the car goes first and foremost to the company holding the car note, not the self-storage owner. The same is true for other property that may have liens against it like motorcycles, RVs and boats.
The self-storage company can keep the funds up to the amount it was owed. If the property sale generated more money than was owed, it must hold onto the money for the tenant and inform the tenant of the funds. If the sale did not generate enough money to pay off the lien, the storage company can sue the tenant for the remaining balance.
Louisiana state law allows the self-storage owner to accelerate the lease and cancel it when monthly payments have been missed. Louisiana storage units do not fall under the abandoned property law in most cases; contact an attorney if the property has sat for several years without payments made for its storage before reporting it as abandoned or trying to sell it.
Servicemembers Civil Relief Act from Military.com
- Servicemembers Civil Relief Act Overview
Servicemembers Civil Relief Act Overview | Military.com
Preventing Problems with Self Storage Sales
It is wise to take pictures of the unit before it is locked by the property manager due to non-payment. Lock it securely. Do not let anyone enter the unit, whether it is the tenant requesting items to be retrieved from storage or potential buyers seeking a peek at the lot pre-auction. Only open the unit when the tenant pays what is owed or when the sale starts. Tenants can arrive minutes before the sale and pay for their property.
Do not let employees or buyers peruse the property until it is certain that the tenant will not be able to recover it. This ensures that the tenant cannot sue for theft of the property after the tenant has redeemed it.
Louisiana confirmed in the court case No. 98-CA-1959, HARRY PRICE Versus U-HAUL COMPANY OF LOUISIANA, that the sale of property per the self-storage facility lien was not a violation of the Fourth Amendment of the United States right to due process before seizure of property. However, self-storage facilities are legally bound to duly inform tenants prior to the sale to remain on the right side of the law.
Questions & Answers
Can a storage facility in Louisiana have a rummage sale with the contents of the units instead of an auction or do the storage units have to be auctioned off?
The sale is authorized to pay back unpaid rent. If the self-storage unit sells the items, they're obligated to record how much it sells for so they can subtract that money from the debt.
If you just throw everything from several units into one sale, you can't track how much income went to which debtor.
That said, you don't HAVE to sell it all. Auctions dominate because you sell all of it to the buyer, and disposal of useless stuff is their responsibility. But you could sell what you could sell in a rummage sale, donate and dispose of the rest, as long as you give the original owner credit for the proceeds.
If in doubt, talk to a lawyer.Helpful 1