A lengthy June report on the equity provisions adopted by the 2021 Minnesota Legislature included one topic perhaps not expected among issues like promoting teachers of color, housing aid, and expanding the working family tax credit: Self-storage reform.
Rep. Esther Agbaje, a DFLer from Minneapolis, said the mundane and seemingly everywhere storage buildings are sometimes used by people in desperate situations: those who have lost homes, been evicted from apartments or are in the midst of domestic violence crisis. Often coinciding with those issues are financial problems that make it more likely they can’t pay the monthly rent.
When that happens, they become subject to the remedy for nonpayment under Minnesota law for self-storage facilities: owners are able to lock out renters out and ultimately auction off their property (think A&E’s “Storage Wars”).
It’s a result that can fall especially hard on people already facing hardship. “These are people who could currently be homeless and need a place to put their belongings,” Agbaje said. “Sometimes, if victims of domestic violence are trying to escape their situation, they need a storage unit.”
“We knew in practice those were the majority of people who would be affected by a delinquency in a payment and would be the most in need of retrieving their property,” Agbaje said. “We wanted to make sure that those groups that are already vulnerable had protection.”
So Agbaje sponsored a bill, HF 1205, to update a 1988 law that hadn’t been touched since 2014. After negotiations with the Minnesota Self Storage Association and Mid Minnesota Legal Aid, language was approved that pleased both renter advocates and owners.
The previous state law allowed delinquent renters to go into units and recover some personal items before auctions, but only if they were valued at less than $50.
The new law (starts on page 88, line 22) states that any renter who is facing an auction of property for non-payment may recover personal papers and any health aids, like CPAP machines or wheelchairs, regardless of value. It then expands the list of items that can be recovered by people who are recipients of “relief based on need” or who are survivors of domestic violence and sexual assault.
“Relief based on need” is defined as those on a variety of assistance programs, including the Minnesota Family Assistance Program, medical assistance, general assistance, MinnesotaCare, the earned income tax credit and other government programs aimed at lower income residents.
Those renters can now recover papers and health aids of any value plus clothing and any tools and equipment “necessary for the livelihood of the occupant” that have a market value of less than $125 per item, an amount that can increase by inflation.
Also added to state law is a more detailed notice requirement for building owners before they can move to auction property. In addition to saying how much rent is owed, the notice must now also say when access to the unit will end and how the renter can dispute the claim of money owed.
In addition, the new law changes how the owners of storage units can evict renters for nonpayment. The change was important to Agbaje because it removes the process from state landlord-tenant and eviction law and instead places it in the section of law covering self-storage.
“We wanted to make sure this was not another avenue for people to put evictions on people’s records,” said Agbaje.
Before, someone who used a storage unit because they were homeless could have trouble finding new housing later if they had an eviction from a storage unit on their record. Now it will be treated as a trespassing issue. Though the process looks like an eviction, it isn’t called that and doesn’t create an eviction record for renters. The auction process was not changed.
The Minnesota Self Storage Association estimates that 250,000 households in the state use self-storage facilities. In a letter to the House Commerce Committee, Joe Doherty, the chief legal and legislative officer for the national Self Storage Association, said building owners resort to the auction process for just 1 to 2 percent of unit rentals each year.
Doherty said Minnesota already had one of the most-generous consumer protection regimes of any state — it’s one of the few that allows renters to get back inside a unit they haven’t paid rent on to reclaim some property.
Current law also doesn’t allow a storage unit owner or manager to lock a renter out until they are past due by 29 days, allowing a month’s free rent with no consequences. But Doherty said the association was sympathetic to concerns about vulnerable people who have fallen behind on payments. Talks with Agbaje and Ron Elwood of Mid Minnesota Legal Aid focused on low-income people and victims of domestic abuse and sexual assault.
“It bumped up the amount of property that can be taken out for folks who are truly in difficult financial or other difficult circumstances, like domestic abuse, but took out some of the incentive that people have to maybe not pay when they have the capability of doing so,” Doherty said.
The first bill removed the authority to use eviction law to deal with problem renters without offering a replacement, he said, but the final agreement fixed that. Getting someone out of a unit is less a matter of nonpayment and more often one of conduct: Some renters abuse managers, try to live in units or engage in illegal activity from their units, he said.
While auctions have been portrayed as a treasure hunt in popular culture, especially on cable shows like “Storage Wars,” Doherty said most property left behind — whether abandoned or due to nonpayment of rent — isn’t worth very much.
“There’s an impression, especially from the television shows, that there’s a goldmine of property,” he said. “Most of the time if the property is that important to somebody, they’re gonna use the grace period to remove it or they’ll pay to keep their property.”
Owners of storage buildings would much rather work out payments or find a way for a renter to leave without resorting to auctions. “They’re in the business of renting property. They’re not in the business of selling people’s property when they can’t pay,” Doherty said.