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Online Auction Bill Passes, Brings Clarity to Chapter 59 Foreclosure Sales

Jun 02, 2017

Bill Passes Amidst Session Marred by Drama and Delays
by Ginny Sutton, TSSA Executive Director

On May 28, Governor Greg Abbott signed Senate Bill 952 into law, bringing to a conclusion an effort that was not only hard-fought but also comparatively tame amidst a sea of legislative angst.  TSSA pursued this bill so that online auctions could be codified into Texas Property Code Chapter 59—in other words, so there would be no question that online auctions are specifically allowed by statute.

Sponsored by Senator Kelly Hancock (R-Dist. 9), the bill adds simple language that allows facility owners a choice of in-person or online auctions.  If an online platform is used, the website address for the online platform, rather than a facility’s physical address, will be used for required notices and advertising.

The Background
Many TSSA members are already using online platforms to conduct their foreclosure auctions.  In its current form, Texas Property Code Chapter 59 states that the foreclosure sale must be a “public sale at the self-service storage facility or a reasonably near public place.”  Since the original statute was created in 1983, there was no anticipation of the technology afforded by an online auction platform.  TSSA heard from members who wanted the security of knowing that online auctions would be specifically referenced in the lien statute.

Online auctions offer advantages of easier processes, and in many cases far higher bids, as the pool of bidders expands.  Many members told TSSA they’d rather spend time on the normal business activity of renting and maintaining units and collecting rent than holding in-person auctions at the facility. Additionally, owners like the fact that online bidders do not need to come onto the property during the sale, risking slip-and-fall injuries or potential criminal activity as would-be burglars case the property.

The Process
Late last year, TSSA signed a legislative alliance with the Self Storage Association, which contributed funds to a legislative effort.  We had already retained the Austin-based lobbying firm Matz and Company to spearhead our legislative watchdog activities as legal counsel Connie Heyer stepped away from the lobbying role. 

Senator Hancock, chair of the Senate Business and Commerce Committee, agreed to sponsor the bill as a business-friendly initiative.

Board members and facility owners Amy Nolan of the Storage Place and Jeanne Dube of Solid Ground Storage made two trips to the Capitol, testifying first before the Senate Business and Commerce Committee and then before the House Business and Industry Committee. They were asked to show up early in the morning but both times were not called to testify until late in the day.

Our bill was unanimously approved by the Senate and House committees, with no one testifying against it. It looked like we were home free, but the bill languished for weeks as our lobbying team worked to get it before the Calendars Committee. 

On May 11, members of the self-labeled Freedom Caucus announced their intent with an impromptu news conference, where they stated they would use procedural maneuvers to kill more than 100 bills in the final hours they could move.

I was fearful that we would simply run out of time for our bill to get a vote, a very real threat as the clock ticked down.

As part of a larger group of non-controversial bills, our bill finally received its needed aye votes with no time to spare.  Two weeks later, on the Saturday of Memorial Day weekend, the governor signed the bill into law.  I wiped the sweat from my brow that day, both physically and metaphorically, as the typical heat and early summer storms set in but the relief flooded through me.

Notes of Thanks
A successful legislative effort takes a great deal of energy and commitment. Of course we extend a sincere thank you to Sen. Hancock, since without his sponsorship the bill would have never existed. We owe thanks to George McCanse and Amy Nolan for their early campaign fundraising efforts, as well as to Jeanne and Amy again, who logged in those critical hours prepping and delivering testimony.  We were lucky to have the wisdom of Connie Heyer, who advised as the session proceeded and are grateful to Lonnie Bickford, who provided much-needed data and photos. Our great lobbying team of Matz and Company really stepped up to make things happen and Robert Loeb and Clint Wynn responded to those late-night emails along with Amy. Truly, Amy was one of our biggest stars in this effort and deserves much credit.

If you enjoy the legislative process and see yourself contributing meaningfully to our efforts during the next session, or if you have a connection to any legislator, please contact me. We are already strategizing about our future goals and have big things in mind for the next go-round.