BILL NUMBER: S3395
SPONSOR: GOUNARDES
 
TITLE OF BILL:
An act to amend the lien law, in relation to enforcement of liens by
online sale of goods that remain in a storage facility
 
PURPOSE OR GENERAL IDEA OF BILL:
To modernize the lien sale system by codifying online sales and adver-
tising and allowing an operator the option to have an abandoned motor
vehicle towed rather than sold at a lien sale.
 
SUMMARY OF PROVISIONS:
Section one makes various changes to Section 182 of the Lien Law includ-
ing codifying the common practice of conducting online auctions for
public lien sales. It also permits advertising of lien sales online and
requires an online ad to be posted with all relevant information for the
sale ten days prior to a sale on a site that regularly advertises public
lien sales. This section also provides an option for the property owner
to have the vehicle towed instead of selling it at a lien sale, provided
that the property owner notify the occupant via verified or electronic
mail which identifies the towing company that will perform the towing
and the address where the towed property can be redeemed.
Section two sets the effective date.
 
JUSTIFICATION:
Self-storage facilities are governed under Section 182 of the Lien Law,
which grants the facility owner a lien on the property stored at the
self-storage facility for rental fees owed to them by the occupant. In
the event that the occupant is unable to pay the monthly fees, the self-
storage facility owner has the right, subject to compliance with certain
procedural requirements, to conduct a sale of the items to defray
outstanding and unpaid fees.
Section 182 of the Lien Law does not expressly state that lien enforce-
ment sales are permitted to take place online. Historical practice was
to conduct auctions in front of the storage units with groups of bidders
and a physical auctioneer on site to officiate the process. Over the
last few years, however, it has become common to hold auctions online.
Because Lien Law Section 182 is silent on this matter, it is left to
court interpretation as to whether an online auction meets the standard
of "commercially reasonable" provided in such section.
This bill would modernize this aspect of the law by amending Section 182
to explicitly allow online advertising and online auctions. This expands
upon the sole existing option for advertising of upcoming lien sales in
Section 202 of Lien Law, which mandates that the sale must be advertised
in a newspaper that is published in the town or city where the sale is
to be held once per week for two consecutive weeks.
Newspaper circulation has gone down in recent years, leaving lien sales
with fewer bidders, less competition, and lower bids which in turn means
less proceeds to offset unpaid occupant debt. Providing an online option
for both advertising and the auctions themselves would drive more poten-
tial bidders to sales and would align New York with the 28 other states
that expressly permit online auctions in their self-storage lien laws.
This bill would also explicitly provide an option for a property owner
to have a motor vehicle towed from a storage space rather than selling
it at a lien sale. Towing operators are accustomed to handling abandoned
vehicles and better understand the process to search for other lienhold-
ers on the vehicle. This experience could potentially help the storage
client avoid damaging their credit rating by allowing the vehicle to be
returned to the other lienholder.
 
PRIOR LEGISLATIVE HISTORY:
2024: S9610 - Referred to Judiciary
 
FISCAL IMPLICATIONS:
TBD
 
EFFECTIVE DATE:
This act shall take effect on the thirtieth day after it shall have
become a law.

Statutes affected:
S3395: 182 lien law, 182(7) lien law