Military Customers and the Servicemembers Civil Relief Act
Military personnel have been regular self storage customers since the early days of the industry and many facilities are located near military bases to serve the need for space by military personnel. Both the industry and individual storage operators should be mindful that military service can cause disruption for our customers and their families. Storage operators should be sensitive to the unique problems associated with military service when payments are missed or late.
The storage operators in 48 states and the District of Columbia have a statutory lien which permits them to sell a customer’s goods without going to court when rent is unpaid. The lien remedy is very important to the self storage industry and should be used intelligently and not mechanically by storage operators. This is especially true when dealing with customers who are members of our armed forces. We advise that self storage facility operators, especially those serving military bases, think carefully before selling the property of active military personnel for non-payment; especially when they have lost contact with such customers. They may not be a deadbeat tenant; they may be on overseas assignment.
Most storage operators have heard about the Servicemembers Civil Relief Act (SCRA - 50 U.S. Code sections 530 et seq.). They may even know that it provides military personnel on active duty with protections from their creditors. However, the actual protections provided by the SCRA are limited and will only apply to a very small number of the military personnel who rent self storage units. The primary protection provided to military personnel and their families is how the self storage lien is enforced.
§ 537. Enforcement of storage liens
(1) Limitation on foreclosure or enforcement. A person holding a lien on the property or effects of a servicemember may not, during any period of military service of the servicemember and for 90 days thereafter, foreclose or enforce any lien on such property or effects without a court order granted before foreclosure or enforcement.
This section appears to require that storage liens on the property of military personnel be enforced only after a court order is issued. Cautious operators will not enforce their lien when they have knowledge that a tenant or the tenant’s spouse is on active duty military service without first filing suit in state court and getting a court order authorizing the enforcement of the lien.
What if you do not know the military status of a customer? The structure of the SCRA strongly suggests that the storage operator must have notice of the delinquent customer’s military status. The operator does not have an obligation to discover whether or not a customer is in the military; but he cannot ignore facts that may indicate that the customer is in the service. It is probably good practice to have a question in the rental agreement or rental application asking this question.
Are you or your spouse on active duty military service? Yes____ No_____
Most of the provisions of SCRA do not apply to rental agreements or other contracts that soldiers and sailors enter into while they are on active duty. They are bound by the term of such contracts, including the rental of a self storage space, and the operator can pursue state remedies if there is a breach. The law does limit how a self storage facility operator may enforce his lien rights; it does not permit military personnel from escaping their legal responsibilities. Keep in mind that selling any customer’s property for non-payment of rent is a draconian measure. Once sold the property is gone and can seldom be recovered. Common sense dictates that storage operators be especially careful when dealing with customers on active military services.
The key to resolving any payment problem is establishing contact with the customer. This may not be easy when your customer is a young man or woman who is facing an overseas assignment and may not give a lot of thought to the fact that they left some stuff in a storage unit. It is strongly urged that storage operators find out why that young soldier is not responding to late notices and is no longer at the address in the rental agreement. Help may be available from the military in trying to find out why the customer is not responding.
No storage operator or manager in the country would want to tell a young soldier or sailor that his or her property was sold while they were overseas defending our country. Storage operators who are careful and act responsibly can usually avoid having to perform this sad duty