House of Representatives

HB 2398

self-storage; late charges

Sponsor: Representative Anderson

DP	Committee on Commerce and Economic Development
dpa	Caucus and COW
x	As Transmitted to the Governor

HB 2398 authorizes operators of self-storage facilities to impose reasonable late fees for each month an occupant does not pay rent when due, as long as the late fee is specified in the rental agreement.

History

Several states are addressing the issue of the use of late fees by self-storage facilities. A class action lawsuit challenging late fees was filed in Maryland against a self-storage facility. This Maryland lawsuit caused the self-storage industry to become proactive in the establishment of late fee legislation.

In Arizona, current law allows providers of consumer services to impose a delinquency fee on a consumer with an account that has an unpaid balance of at least $10 [ARS 44-1366]. HB 2398 gives self-storage facilities the authority to impose late fees in the case of unpaid rent.

Provisions

· Defines late fee as a reasonable fee or charge, determined by the operator, imposed when occupant fails to pay rent when due.

· Includes late fees in the possessory lien given to the operator of a facility from the date the rent is unpaid and due.

· Requires the rental agreement to state that the lien may accrue as of the date rent is due.

· Allows the operator to charge a late fee each month the rent is unpaid and due.

· Stipulates that the rental agreement must state the date the rent is due and the date on which the late fee accrues.

· Mandates the operator to give adequate notice before the late fee is imposed.

· States that a reasonable late fee may be calculated as the greater of $10 or 20 per cent of one month’s rent.

· Makes technical and conforming changes.

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44th Legislature

Second Regular Session 2 May 8, 2001

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