Nuances in Louisiana and New Orleans Self Storage Law

 

Louisiana's Self-Service Storage Facility Act was passed in 1981. Self storage facilities do not fall under Louisiana statute Title 10. Instead, the Self-Service Storage Facility Act is part of Title 9, starting with section 4756. While Louisiana has historically resisted the Uniform Commercial Code, Louisiana does not require the self-storage facility to go to court to act upon the lien which is considered the private enforcement of a possessory lien. New Orleans self storage facilities must follow Louisiana state law.

Louisiana Law and Storage Liens

Louisiana allows the New Orleans self storage facility owner to take ownership of the contents of the unit after the occupant has failed to make payment on time. The contents can be sorted through by the owner and items kept by the owner, sold at auction or a combination of the two. The lien can be settled by the owner taking possession of the property and keeping it if the value of the items is less than what is owed and satisfying the claim for all rent due.


Louisiana statute 10:9-504 states that the creditor can sell, lease and dispose of the collateral after default. In theory, the self-storage facility could claim the property to satisfy the lien, settle the lien in full, and then donate the property to charity. The owner can also buy items at fair market value and apply that amount toward the lien. If the owner buys the items for less than fair market value, he or she could be sued. If the owner loses the judgment, the penalties are up to three times the value of the property lost plus the winner's legal fees. Louisiana also allows employees of the self-storage facility to bid on items in auction, something forbidden in some other states. However, owners who regularly sift through items and keep the better ones may lower their reputation with auction buyers. Louisiana does not hold New Orleans self storage owners liable for the low amounts received if the property was sold at an open auction. For example, if the lot is sold at an open auction for $1,000 and the contents are worth five times that much, the $1,000 is applied to the lien and anything over the money owed is considered the property of the former tenant. The purchase price set by buyers who could not assess the value of items locked in chests or did not bid up valuable antiques is not the fault of the New Orleans self storage owner.


Louisiana law specifically states that the self-storage facility lien is inferior to a chattel mortgage. While other states are unclear on whether or not a car in storage can be sold at a self-storage property auction, Louisiana's Self-Service Storage Facility Act was amended in 1989 specifically to state that the liens held by a bank, institution holding the car note or even a "cash for car titles" lender are clearly superior to the storage facility lien.


The right of self-storage facilities to take possession of the property was reaffirmed by Louisiana Supreme Court case number 98-CA-1959, Harry Price versus U-Haul. That case challenged self-storage liens under the 1981 self-storage act as a violation of the due process clause of the U.S. Constitution, where judicial review is necessary before someone's property can be taken.

Louisiana Law and Bankruptcy

According to Louisiana statue R.S. 13:3881, the bankruptcy exemptions that protect personal property from seizure like household goods and clothing does not prevent the self-storage facility lien from being executed. And property repossessed for failure to make a car payment or reclaimed by the lender during the bankruptcy takes precedence over a self-storage facility lien.

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