Bill Text: MO HB1225 | 2014 | Regular Session | Engrossed
Bill Title: Changes the laws regarding the Self-Service Storage Facilities Act
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2014-07-10 - Delivered to Secretary of State (G) [HB1225 Detail]
Download: Missouri-2014-HB1225-Engrossed.html
SECOND REGULAR SESSION
[PERFECTED]
HOUSE COMMITTEE SUBSTITUTE FOR
97TH GENERAL ASSEMBLY
5063H.02P D. ADAM CRUMBLISS, Chief Clerk
AN ACT
To repeal sections 415.400, 415.405, 415.410, 415.415, 415.417, 415.420, and 415.425, RSMo, and to enact in lieu thereof eighteen new sections relating to self-service storage facilities, with an effective date for certain sections.
Be it enacted by the General Assembly of the state of Missouri, as follows:
Section A. Sections 415.400, 415.405, 415.410, 415.415, 415.417, 415.420, and 415.425, RSMo, are repealed and eighteen new sections enacted in lieu thereof, to be known as sections 379.1640, 379.1645, 379.1650, 379.1655, 379.1660, 379.1665, 379.1670, 379.1675, 379.1680, 379.1685, 379.1690, 415.400, 415.405, 415.410, 415.415, 415.417, 415.420, and 415.425, to read as follows:
379.1640. As used in sections 379.1640 to 379.1690, the following terms shall mean:
(1) "Director", the director of the department of insurance, financial institutions, and professional registration;
(2) "Insurance company" or "insurer", any person, reciprocal exchange, interinsurer, or any other legal entity licensed and authorized by the director to write inland marine coverage;
(3) "Insurance producer" or "producer", a person required to be licensed under the laws of this state to sell, solicit, or negotiate insurance;
(4) "License", the same meaning as such term is defined in section 375.012;
(5) "Location", any physical location in this state or any website, call center site, or similar location directed to residents of this state;
(6) "Negotiate", the same meaning as such term is defined in section 375.012;
(7) “Occupant”, a person, lessee, sublessee, successor, or assignee entitled to the use of a leased space at a self-service storage facility under a rental agreement;
(8) “Operator”, the owner, operator, lessor, or sublessor of a self-service storage facility, or an agent or any other person authorized to manage the facility; except that, the term “operator” does not include a warehouseman unless the operator issues a warehouse receipt, bill of lading, or other document of title for the personal property stored;
(9) "Person", an individual or business entity;
(10) "Personal property", movable property which is not affixed to land including, but not limited to, goods, wares, merchandise, motor vehicles, watercraft, household items, and furnishings;
(11) "Self storage insurance", an insurance policy issued by an insurer which may be offered on a month-to-month or other periodic basis as a group or master commercial inland marine policy issued to an operator of self storage units under which individual occupants may elect to enroll for coverage for hazard insurance coverage for the loss of, or damage to, tangible personal property in storage or in transit during the rental period;
(12) "Self storage insurance license", a license to sell or solicit self storage insurance;
(13) "Self storage transaction", the lease of a self storage unit by an operator to an occupant;
(14) "Sell", the same meaning as such term is defined in section 375.012;
(15) "Solicit", the same meaning as such term is defined in section 375.012;
(16) "Supervising business entity", the insurer or a licensed business entity producer designated by the insurer to supervise the actions of an operator.
379.1645. 1. No operator shall sell or solicit self storage insurance coverage in this state unless such operator has obtained a self storage insurance license.
2. An operator applying for a self storage insurance license shall make an application to the director on the prescribed form as required. On the prescribed form, the operator shall be required to provide the name of an employee or officer of the operator who is designated by the operator as the person responsible for the operator’s compliance with the requirements of this section, and such designated responsible person shall not be required to hold an insurance producer license. Such license shall authorize an employee or authorized representative of an operator to sell or offer coverage under a policy of self storage insurance to an occupant at each location at which the operator engages in a self storage transaction.
3. Any operator licensed under sections 379.1640 to 379.1690 shall pay an initial license fee to the director in an amount prescribed by the director by rule, but not to exceed one hundred fifty dollars, and shall pay a renewal fee in an amount prescribed by the director by rule, but not to exceed one hundred dollars. License fees shall be deposited in the insurance dedicated fund.
4. Notwithstanding any provision of sections 375.012 to 375.018, a self storage insurance license, if not renewed by the director by its expiration date, shall terminate on its expiration date and shall not after such date authorize its holder to sell or solicit any self storage insurance under sections 379.1640 to 379.1690.
379.1650. 1. An operator shall have the obligation to ensure that every location that is authorized to sell, solicit, or negotiate self storage insurance to occupants shall have specific brochures available to prospective occupants which:
(1) Disclose that self storage insurance may provide a duplication of coverage already provided by an occupant’s homeowner's, renter's, or other source of coverage;
(2) State that the enrollment by the occupant in a self storage insurance program is not required in order to lease self storage units;
(3) Summarize the material terms of the insurance coverage, including:
(a) The identity of the insurer;
(b) The identity of the supervising business entity;
(c) The amount of any applicable deductible and how it is to be paid;
(d) Benefits of the coverage; and
(e) Key terms and conditions of coverage;
(4) Summarize the process for filing a claim; and
(5) State that the occupant may cancel enrollment for coverage under a self storage insurance policy at any time and receive a refund of any unearned premium on a pro rata basis.
2. Eligibility and underwriting standards for occupants electing to enroll in coverage shall be established for each self storage insurance program. Each insurer shall maintain all eligibility and underwriting records for a period of five years. Self storage insurance issued under sections 379.1640 to 379.1690 shall be deemed primary coverage over any other collateral coverage and any policy or certificate of coverage issued subsequent to January 1, 2015, shall contain a disclosure to that effect. A policy or certificate of coverage shall be made available to prospective occupants at the point of sale or delivered to an enrolled occupant within sixty days from the date an occupant enrolls for coverage.
3. Insurers offering self storage insurance coverage through operators shall appoint a supervising business entity to supervise the administration of the program. The supervising business entity shall be responsible for the development of a training program for employees and authorized representatives of an operator, and shall include basic instruction about the self storage insurance offered to occupants and the disclosures required under this section.
4. Insurers and applicable supervising business entities offering self storage insurance shall share all complaints, grievances, or inquiries regarding any conduct that is specific to an operator and that may not comply with applicable state laws and regulations.
5. A supervising business entity shall maintain a registry of operator locations which are authorized to sell or solicit self storage insurance coverage in this state. Upon request by the director and with ten days' notice to the supervising business entity, the registry shall be open to inspection and examination by the director during regular business hours of the supervising business entity.
6. Within thirty days of a supervising business entity terminating an operator location's appointment to sell or solicit self storage insurance, the supervising business entity shall update the registry with the effective date of termination. If a supervising business entity has possession of information relating to any cause for discipline under section 375.141, the supervising business entity shall notify the director of such information in writing. The privileges and immunities applicable to insurers under section 375.022 shall apply to supervising business entities for any information reported under this subsection.
7. The supervising business entity shall not charge a fee for adding or removing an operator location from the registry.
8. No employee or authorized representative of an operator shall advertise, represent, or otherwise hold himself or herself out as an insurance producer unless such employee or authorized representative is otherwise licensed as an insurance producer.
9. The training required in subsection 3 of this section shall be delivered to all employees and authorized representatives of the operators who are directly engaged in the activity of selling self storage insurance in this state. The training may be provided in electronic form. However, if conducted in an electronic form, the supervising business entity shall implement a supplemental education program regarding the self storage insurance product that is conducted and overseen by licensed employees of the supervising business entity.
10. The charges for self storage insurance coverage may be billed and collected by the operator. Any charge to the occupant that is not included in the cost associated with the lease of self storage or related services shall be separately itemized on the occupant's bill. If the self storage insurance is included in the lease of a self storage unit, the operator shall clearly and conspicuously disclose to the occupant that the self storage insurance coverage is included with the self storage lease. Operators billing and collecting such charges shall not be required to maintain such funds in a segregated account, provided that the insurer authorized the operator to hold such funds in an alternative manner and remits such amounts to the supervising business entity within forty-five days of receipt. All funds received by an operator from an occupant for the sale of self storage insurance shall be considered funds held in trust by the operator in a fiduciary capacity for the benefit of the insurer. Operators shall maintain all records related to the purchase of self storage insurance for a period of three years from the date of purchase.
379.1655. Persons licensed as operators shall be subject to the provisions of sections 375.012 to 375.014, 375.018, 375.031, 375.046, 375.051, 375.052, 375.071, 375.106, 375.116, 375.141, and 375.144 of the insurance producers act.
379.1660. 1. The director may suspend, revoke, or refuse to issue any license or renew any license required by the provisions of sections 379.1640 to 379.1690 for any reason listed in section 375.141 or for any one or more of the following causes:
(1) Use of any advertisement or solicitation that is false, misleading, or deceptive to the general public or persons to whom the advertisement or solicitation is primarily directed;
(2) Obtaining or attempting to obtain any fee, charge, tuition, or other compensation by fraud, deception, or misrepresentation;
(3) Violation of any professional trust or confidence.
2. The director may impose other penalties that the director deems necessary and reasonable to carry out the purposes of sections 379.1640 to 379.1690, including:
(1) Suspending the privilege of transacting self storage insurance under sections 379.1640 to 379.1690 at specific locations where violations have occurred; and
(2) Suspending or revoking the ability of individual employees or authorized representatives to act under the license.
379.1665. Operators shall be subject to the investigation and examination provisions of section 374.190.
379.1670. Premiums received by an operator or supervising business entity shall be deemed received by the insurer. Insurers may require occupants to provide proof of purchase.
379.1675. If the director determines that a person has engaged, is engaging in, or has taken a substantial step toward engaging in an act, practice, or course of business constituting a violation of sections 379.1640 to 379.1690 or rule adopted or order issued thereunder, or that a person has materially aided or is materially aiding an act, practice, omission, or course of business constituting a violation of sections 379.1640 to 379.1690, or a rule adopted or order issued thereunder, the director may:
(1) Issue such administrative orders as authorized under section 374.046; or
(2) Maintain a civil action for relief authorized under section 374.048.
A violation of sections 379.1640 to 379.1690 or rule adopted or order issued thereunder is a level two violation under section 374.049.
379.1680. The license of a supervising business entity may be suspended, revoked, renewal refused, or an application refused if the director finds that a violation by a self storage insurance operator was known or should have been known by the supervising business entity, and the violation was neither reported to the director nor corrective action taken. A violation of this section is a level three violation under section 374.049.
379.1685. Notwithstanding any other provision of law:
(1) An insurer may terminate or otherwise change the terms and conditions of a policy of self storage insurance only upon providing the policyholder and enrolled occupants with at least thirty days' notice;
(2) If the insurer changes the terms and conditions of a policy of self storage insurance, the insurer shall provide the operator with a revised policy or endorsement and each enrolled occupant with a revised certificate, endorsement, updated brochure, or other evidence indicating a change in the terms and conditions has occurred and a summary of material changes;
(3) Notwithstanding subdivision (1) of this section, an insurer may terminate an enrolled occupant's enrollment under a self storage insurance policy upon fifteen days' notice for discovery of fraud or material misrepresentation in obtaining coverage or in the presentation of a claim thereunder;
(4) Notwithstanding subdivision (1) of this section, an insurer may immediately terminate an enrolled occupant's enrollment under a self storage insurance policy:
(a) For nonpayment of premium;
(b) If the enrolled occupant ceases to have an active lease agreement with the operator of self storage units; or
(c) If an enrolled occupant exhausts the aggregate limit of liability, if any, under the terms of the self storage insurance policy and the insurer sends notice of termination to the occupant within thirty calendar days after exhaustion of the limit. However, if the notice is not timely sent, enrollment and coverage shall continue, notwithstanding the aggregate limit of liability until the insurer sends notice of termination to the enrolled occupant;
(5) If a self storage insurance policy is terminated by an operator, the operator shall mail or deliver written notice to each enrolled occupant advising the occupant of the termination of the policy and the effective date of termination. The written notice shall be mailed or delivered to the occupant at least thirty days prior to the termination;
(6) Whenever notice is required under this section, it shall be in writing and may be mailed or delivered to the operator at the operator's mailing address and to its affected enrolled occupants' last known mailing addresses on file with the insurer. If notice is mailed, the insurer or operator, as the case may be, shall maintain proof of mailing in a form authorized or accepted by the United States Postal Service or other commercial mail delivery service. Alternatively, an insurer or operator may comply with any notice required by this section by providing electronic notice to an operator or its affected enrolled occupants, as the case may be, by electronic means. Additionally, if an insurer or operator provides electronic notice to an affected enrolled occupant and such delivery by electronic means is not available or is undeliverable, the insurer or operator shall provide written notice to the enrolled occupant by mail in accordance with this section. If notice is accomplished through electronic means, the insurer or operator, as the case may be, shall maintain proof that the notice was sent.
379.1690. 1. The director may promulgate rules to implement the provisions of sections 379.1640 to 379.1690. Any rule or portion of a rule, as that term is defined in section 536.010, that is created under the authority delegated in sections 379.1640 to 379.1690 shall become effective only if it complies with and is subject to all of the provisions of chapter 536 and, if applicable, section 536.028. Sections 379.1640 to 379.1690 and chapter 536 are nonseverable and if any of the powers vested with the general assembly under chapter 536 to review, to delay the effective date, or to disapprove and annul a rule are subsequently held unconstitutional, then the grant of rulemaking authority and any rule proposed or adopted after August 28, 2014, shall be invalid and void.
415.400. Sections 415.400 to [415.430] 415.425 shall be known and may be cited as the "Self-Service Storage Facilities Act".
415.405. As used in sections 415.400 to [415.430] 415.425, the following terms shall mean:
(1) "Default", the failure to perform on time any obligation or duty set forth in a rental agreement;
(2) "Electronic mail", an electronic message or an executable program or computer file that contains an image of a message that is transmitted between two or more computers or electronic terminals and includes electronic messages that are transmitted within or between computer networks;
(3) "Last known address", that postal address or electronic mail address provided by the occupant in the latest rental agreement or the postal or electronic mail address provided by the occupant in a subsequent written notice of a change of address, one of which may be designated in writing by the occupant as the preferred method of contact;
[(3)] (4) "Leased space", the individual storage space at the self-service facility which is rented to an occupant pursuant to a rental agreement;
[(4)] (5) "No commercial value", includes but not limited to any property offered for sale in a commercially reasonable manner that receives no bid or offer;
[(5)] (6) "Occupant", a person, lessee, sublessee, successor or assignee entitled to the use of a leased space at a self-service storage facility under a rental agreement;
[(6)] (7) "Operator", the owner, operator, lessor or sublessor of a self-service storage facility, or an agent or any other person authorized to manage the facility; except that, the term "operator" does not include a warehouseman, unless the operator issues a warehouse receipt, bill of lading, or other document of title for the personal property stored;
[(7)] (8) "Personal property", movable property which is not affixed to land, including, but not limited to, goods, wares, merchandise, motor vehicles, watercraft, household items, and furnishings;
[(8)] (9) "Private sale", [an unadvertised] a sale negotiated and concluded directly between the buyer and seller;
[(9)] (10) "Public sale", a sale made after public notice and includes but is not limited to a sale at the self-service storage facility or a sale conducted online at a publically accessible website;
[(10)] (11) "Rental agreement", any written contract or agreement that establishes or modifies the terms, conditions or rules concerning the use and occupancy of a self-service storage facility, which is signed by the occupant and the operator;
[(11)] (12) "Self-service storage facility", any real property used for renting or leasing individual storage spaces in which the occupants themselves customarily store and remove their own personal property on a self-service basis;
(13) "Verified mail", any method of mailing that is offered by the United States Postal Service or private delivery service that provides evidence of mailing.
415.410. 1. An operator may not knowingly permit a leased space at a self-service storage facility to be used for residential purposes. An occupant may not use a leased space for residential purposes.
2. An operator may enter the leased space at all times which are reasonably necessary to insure the protection and preservation of the self-service storage facility or any personal property stored therein.
3. Prior to placing any personal property into his or her leased space, each occupant shall deliver a written statement to the operator or indicate in the rental agreement of such leased space containing the name and address of each person having a valid lien against such personal property.
4. The lessee shall be informed in writing that the lessor either does or does not have casualty insurance on the lessee's property.
5. If the rental agreement contains a limit on the value of property stored in occupant's space, such limit shall be deemed to be the maximum value of the stored property and the maximum liability of the owner for any claim for loss of or damage to stored property.
415.415. 1. The operator of a self-service storage facility has a lien on all personal property stored within each leased space for rent, labor, or other charges, and for expenses reasonably incurred in sale of such personal property, as provided in sections 415.400 to [415.430] 415.425. The lien established by this subsection shall have priority over all other liens except those liens that have been perfected and recorded on personal property. The rental agreement shall contain a statement, in bold type, advising the occupant of the existence of such lien and that property stored in the leased space may be sold to satisfy such lien if the occupant is in default, and that any proceeds from the sale of the property which remain after satisfaction of the lien will be paid to the state treasurer if unclaimed by the occupant within one year after the sale of the property.
2. If the occupant is in default for a period of more than [thirty] forty-five days, the operator may enforce the lien granted in subsection 1 of this section and sell the property stored in the leased space for cash. Sale of the property stored on the premises may be done at a public or private sale, may be done as a unit or in parcels, or may be by way of one or more contracts, and may be at any time or place and on any terms as long as the sale is done in a commercially reasonable manner in accordance with the provisions of section 400.9-627. The operator may otherwise dispose of any property which has no commercial value.
3. The proceeds of any sale made under this subsection shall be applied to satisfy the lien, with any surplus being held for delivery on demand to the occupant or any other lienholders which the operator knows of or which are contained in the statement filed by the occupant pursuant to subsection 3 of section 415.410 for a period of one year after receipt of proceeds of the sale and satisfaction of the lien. No proceeds shall be paid to an occupant until such occupant files a sworn affidavit with the operator stating that there are no other valid liens outstanding against the property sold and that he or she, the occupant, shall indemnify the operator for any damages incurred or moneys paid by the operator due to claims arising from other lienholders of the property sold. After the one-year period set in this subsection, any proceeds remaining after satisfaction of the lien shall be considered abandoned property to be reported and paid to the state treasurer in accordance with laws pertaining to the disposition of unclaimed property.
4. Before conducting a sale under subsection 2 of this section, the operator shall:
(1) At least forty-five days before any disposition of property under this section, which shall run concurrently with subsection 2 of this section, notify the occupant and each lienholder which is contained in any statement filed by the occupant pursuant to subsection 3 of section 415.410 of the default by first-class mail or electronic mail at the occupant's or lienholder's last known address;
(2) No [later] sooner than ten days after mailing the notice required in subdivision (1) of this subsection, mail a second notice of default, by [registered or certified] verified mail or electronic mail, to the occupant at the occupant's or lienholder's last known address, which notice shall include:
(a) A statement that the contents of the occupant's leased space are subject to the operator's lien;
(b) A statement of the operator's claim, indicating the charges due on the date of the notice, the amount of any additional charges which shall become due before the date of release for sale and the date those additional charges shall become due;
(c) A demand for payment of the charges due within a specified time, not less than ten days after the date on which the second notice was mailed;
(d) A statement that unless the claim is paid within the time stated, the contents of the occupant's space will be sold after a specified time; and
(e) The name, street address and telephone number of the operator, or a designated agent whom the occupant may contact, to respond to the notice;
(3) At least seven days before the sale, advertise the time, place and terms of the sale in a newspaper of general circulation in the jurisdiction where the sale is to be held. Such advertisement shall be in the classified section of the newspaper and shall state that the items will be released for sale.
5. If the property is a vehicle, watercraft, or trailer and rent and other charges remain unpaid for sixty days, the owner may treat the vehicle, watercraft, or trailer as an abandoned vehicle and have the vehicle, watercraft, or trailer towed from the self-service storage facility. When the vehicle, watercraft, or trailer is towed from the self-service storage facility, the owner shall not be liable for the vehicle, watercraft, or trailer for any damages to the motor vehicle, watercraft, or trailer once the tower takes possession of the property.
[5.] 6. At any time before a sale under this section, the occupant may pay the amount necessary to satisfy the lien and redeem the occupant's personal property.
415.417. 1. For the purposes of this section, "late fee" means a fee or charge assessed by an operator for an occupant's failure to pay rent when due. A late fee is not interest on a debt, nor is a late fee a reasonable expense which the operator may incur in the course of collecting unpaid rent in enforcing his or her lien rights pursuant to sections 415.400 to [415.430] 415.425, or enforcing any other remedy provided by statute or contract.
2. Any late fee charged by the operator shall be stated in the rental agreement. No late fee shall be collected unless it is written in the rental agreement or an addendum to such agreement.
3. An operator may impose a reasonable late fee for each month an occupant does not pay rent when due.
4. A late fee of twenty dollars or twenty percent of the monthly rental amount, whichever is greater, for each late rental payment shall be deemed reasonable, and shall not constitute a penalty.
5. An operator may set a late fee other than that permitted in subsection 4 of this section if such fee is reasonable. The operator shall have the burden of proof that a higher late fee is reasonable.
6. The operator may recover all reasonable rent collection and lien enforcement expenses from the occupant in addition to any late fees incurred.
415.420. 1. A purchaser in good faith of any personal property sold under sections 415.400 to [415.430] 415.425 takes the property free and clear of any rights of any persons against whom the lien was valid and other lienholders.
2. If the operator complies with the provisions of sections 415.400 to [415.430] 415.425, the operator's liability to the occupant shall be limited to the net proceeds received from the sale of the personal property, and to other lienholders shall be limited to the net proceeds received from the sale of any personal property covered by the other lien.
3. If an occupant is in default, the operator may deny the occupant access to the leased space.
4. Unless otherwise specifically provided in sections 415.400 to [415.430] 415.425, all notices required by sections 415.400 to [415.430] 415.425 shall be sent by [registered or certified mail] verified mail or electronic mail to the last known address as defined in section 415.400. Notices sent to the operator shall be sent to the self-service storage facility where the occupant's property is stored. Notices to the occupant shall be sent to the occupant at the occupant's last known address. Notices shall be deemed delivered when deposited with the United States postal service, properly addressed as provided in subsection 4 of section 415.415, with postage prepaid or sent via electronic mail to the last known address.
415.425. Except as provided in subsection 3 of section 415.420, unless the rental agreement specifically provides otherwise and until a lien sale under sections 415.400 to [415.430] 415.425, the exclusive care, custody and control of all personal property stored in the leased self-service storage space remains vested in the occupant.
Section B. The provisions of sections 379.1640, 379.1645, 379.1650, 379.1655, 379.1660, 379.1665, 379.1670, 379.1675, 379.1680, 379.1685, and 379.1690 of this act shall become effective January 1, 2015.
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