Self-storage: when they lock you out and when they can auction

This is the law governing the relationship between a self-storage operator — a self-service storage facility or a mobile unit such as a trailer, van or shipping container — and the user who rents a space. The law clarifies that these spaces may not be used for residential or unlawful purposes, and that a self-storage facility is not considered a warehouse or a public service company for purposes of Act 109-1962. There is one scenario where this law does not apply: if the operator issues a warehouse receipt, bill of lading or other document of title for the stored goods, then the operator and the user are subject to Act 208-1995 and this law’s provisions do not apply.

A user is the natural or juridical person authorized to use a self-storage facility or a mobile unit, under a self-storage contract executed with the operator. The law requires that contract to always contain the obligations and duties of user and operator, plus the procedure by which the lien the law grants the operator will be exercised. One fact decides where your notices land: "last known address" is the one you provided in the contract, or the one you notified the operator of by certified mail indicating a change of address. If you moved and did not notify it that way, the notices go to the old one.

• To deny you access: that seven (7) days have passed from any rent due date without your paying in full. No prior notice is needed.Verified against the official source
• For the first default notice: that the rent or other payable sum be more than twenty (20) days overdue. It is sent through the United States postal service with a certificate of mailing to your last known address.Verified against the official source
• For the auction: a notarial deed with inventory and appraisal, an edict published in a newspaper of general circulation, a copy posted on the facility’s board, and a sale no less than ten (10) days after the edict.Verified against the official source

• The self-storage contract, which must describe the procedure by which the lien will be exercised.
• The two default notices with their mailing dates: the ten-day terms are counted from those.
• If claiming goods that are a third party’s rather than yours: satisfactory evidence of ownership accompanied by a sworn statement from the third party representing to the operator that they are the legal owner of those goods.

1. 1

   Step 1: Separate the lockout from the auction

   These are two different things happening at different moments. Once seven (7) days pass from any rent due date without the user paying in full, the operator may, with no prior notice, deny you access to the rented space. That does not mean they will sell: the sale procedure is separate and has its own terms and notices.

2. 2

   Step 2: Read the first notice: it tells you everything

   When the debt is more than twenty (20) days overdue, the operator must notify you through the United States postal service with a certificate of mailing to your last known address. That notice must contain the due date and a breakdown of the sum owed with a payment demand; the operator’s name, phone and physical and mailing address so you can send payment or reply; a notice that, if you do not pay, they may proceed with a public auction sale; a notice that until you pay the rent in full you will have no access; and a notice that you have the right to file a claim with the Department of Consumer Affairs or with the Court of First Instance.

3. 3

   Step 3: File the dispute and the execution freezes

   This is the law’s strongest tool and it is in Article 3. The Department of Consumer Affairs has concurrent jurisdiction with the Court of First Instance to adjudicate all disputes between operator and user. And the operator may not proceed with enforcing its lien while a dispute is pending before the corresponding forum, provided the operator has been duly notified, through the applicable procedure, that the dispute was duly filed. Filing and having the operator notified is what stops the clock.

4. 4

   Step 4: Count the notices before the auction

   Within a term of no less than ten (10) days after mailing the first notice, per the date of the mailing certificate, the operator must send you a second with a certificate of mailing, identifying the space’s number or code and its location, and giving you clear notice that if you do not settle the full amount within the term indicated — no less than ten (10) days from the letter’s mailing date — it may proceed with the public auction sale. If the operator skipped a notice or shortened a term, that is what to take to the forum.

5. 5

   Step 5: Demand the notarial deed and the edict

   Once the two notices are met and the term lapses without payment, a notary public shall draw up a Notarial Deed inventorying all the property that may be subject to the sale, and the operator shall perform an appraisal that becomes part of that deed. Only then may the auction be announced, by publishing an edict in a newspaper of general circulation in Puerto Rico, including the facility’s address, the space’s number or code, the user’s name, and the time, place and date of the sale. The operator shall also post a copy of the edict on a board kept for that purpose at the facility, and must retain all auction documents for a minimum of two (2) years for inspection by regulatory agencies and public scrutiny.

6. 6

   Step 6: You may pay up to the last moment

   The user may, at any time before the sale, pay the full amount owed and the other charges stipulated in the contract to the operator, and thereby recover possession of the stored goods. That same right belongs to any third party who presents the operator satisfactory evidence that they own the stored goods, accompanied by a sworn statement so representing.

7. 7

   Step 7: If there was a surplus, claim it within sixty days

   The operator applies the sale proceeds to satisfy your debt, and you remain responsible for any deficiency. If there is a surplus, the operator must notify you within ten (10) days after the auction, by regular mail to your last known address, identifying the amount and explaining that you will have sixty (60) days to claim it. If you do not claim it within that term, the operator remits it to the Department of the Treasury, where you will have one (1) year to request the refund; after that year, the amount goes to the General Fund.

The Department of Consumer Affairs has concurrent jurisdiction with the Court of First Instance to adjudicate all disputes between an operator and a user, whether a natural or juridical person, under the agency’s administrative procedure or the Courts Administration’s procedures. The first default notice itself must inform you of that right. And filing there, with notice to the operator, halts enforcement of the lien while the dispute is pending. If the surplus was already remitted, the refund is requested at the Department of the Treasury within the year.

• Assuming the seven-day lockout means the auction is imminent: they are different procedures.
• Not filing the dispute at DACO or in court, which is the only thing that halts enforcement of the lien.
• Not notifying a change of address by certified mail: the notices go to the last known address.
• Missing the chance to pay in full, which can be done at any time before the sale.
• Not claiming the surplus within sixty days of the notice.
• Believing losing the auction settles the debt: you remain responsible for any deficiency.
• Not checking whether the operator complied with the two notices, the notarial deed and the edict.
• Assuming personal identification documents are also retained: the law excludes them from the lien.

These are the government pages this guide is based on.

• Departamento de Asuntos del Consumidor (DACO)

  DACO

  bvirtualogp.pr.gov

• DACO services

  DACO

  www.daco.pr.gov