Nov 182013

I’ve been getting a lot of questions from self-storage operators in states with recent statutory updates. Their statute says they can e-mail lien/default notices. They want to know how to do that and if they should e-mail these notices instead of mailing them.

The answer to the first part depends on the state. Let’s look at a few of the 2013 statutes that have changed to allow e-mail of default notices.

·         Arkansas allows for the lien notice to be sent by e-mail as long as the e-mail address was provided to you by the occupant and you have obtained written permission to send the notice by e-mail.  What’s the takeaway?  You need to gather an e-mail address from the occupant and add a clause to your rental agreement that not only gives you permission to send notices by e-mail but requires the occupant to keep his e-mail address up to date with you in the same manner as his postal address. You may also send the lien notice by a verified mail method such as First Class Mail with a Certificate of Mailing. You will need send the notice this way if you do not have an e-mail address or permission to e-mail.

·         Connecticut allows for e-mail service of the lien notice, however, you must obtain confirmation that the occupant opened the notice within seven days of sending.  If you can’t obtain confirmation, the notice must be re-sent via First Class Mail with Certificate of Mailing.  Of course, there’s no prohibition against just sending the notice via First Class Mail in the first place; and if you do this, the notice is presumed delivered.

·         Georgia is a hybrid of Arkansas and Connecticut.  To send an e-mail version of the lien notice, you must have permission to send notices by e-mail, and you must obtain some sort of response or receipt of delivery or you have to re-send the notice via First Class Mail with Certificate of Mailing. Again, nothing prevents the use of First Class Mail in the first place.

·         Maryland allows for e-mail notices in addition to providing authority to send by any method offered by the United States Postal Service or a private delivery service that provides a receipt showing the item was mailed or sent (not delivered). Again, if the notice is e-mailed, you must receive a response or receipt of e-mail delivery or you are back to mailing the notice.

·         Nevada, New Jersey, Oregon (effective Jan. 1) and Utah (must have proof of receipt within three days) all follow similar requirements to obtain a response or receipt of proof of e-mail delivery.

The question is whether you should rely on e-mail as your sole method of sending a default or lien notice to your occupant?  I know e-mail service is now permitted in many states, but my answer is still no, you shouldn’t rely on e-mail as the only way to send a default notice.

My reasons are varied, but they follow two essential paths. First, I don’t think the e-mail method of service has been upheld in courts enough yet to deem e-mail as “safe.”  Can you imagine the judge looking at you during a wrongful-sale lawsuit and saying, “You sold this person’s worldly possessions based on an e-mail?  You could have sent it via regular mail or First Class Mail with Certificate of Mailing for $1 or so, but all you did was send an e-mail.”  You get my drift. It may be legal, but it’s not an outstanding way to run your business.  Lien sales are always risky. So many things can go wrong. You don’t even know until the sale is over and you can’t fix the problem.

By the way, I’m not saying you shouldn’t send e-mail. Send e-mail often if you have permission. But send the default or lien notice by the prescribed mailing method in addition to the e-mail. My tax professor used to call it using “belt and suspenders.”

My second concern is the “looseness” in the e-mail verification or receipt language.  I contend there’s a lot left open to interpretation.  For example, in Connecticut, the statute says that if the owner does not receive confirmation that the occupant has opened the e-mail, he must use First Class Mail with Certificate of Mailing.  How do you prove the occupant opened that e-mail?  Can you just hear the occupant’s arguments that a disgruntled spouse, former girlfriend, roommate, etc., must have opened the e-mail and deleted it to be vindictive? Let’s not forget spam folders and the risk that the e-mail address was improperly entered at the time of rental.  The prospects concern me too much to recommend to operators that they rely on e-mail as their sole method to serve important documents such as default notices.

Finally, a traceable return-receipt e-mail costs about 50 cents; a stamp costs 47 cents.  Even First Class Mail with Certificate of Mailing is only 90 cents and $1.05 as of this writing.  Is it worth all the risk to potentially save 55 cents?  Further, if you don’t get a verification that the e-mail was opened, you’re going to pay for snail mail anyway.  All in all, the risks of e-mail for default notices outweigh the benefits at this time.

  One Response to “It May Be Legal in Your State to Send Self-Storage Default Notices Via E-Mail, But Is It a Good Idea?”

  1. I total agree with the premise of your article. I have had some heated exchanges with executives at SSA over this very issue. There are plenty of other areas to save more $$ on. While the Associations are working to make things easier on us, I don’t think this is ultimately one of them. I have over 500 units and spend about $80-120 a month on certified mailings which are generated from facility software automatically. When you are talking about auctioning off someone’s personal goods, even $5 is not a lot considering the risk. Put things in perspective, if you have ever rented apartments, you know how much easier you have it in Self-Storage. Buck up and play it straight and not sleazy.

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