Certified Mail Still Important

By Richard Marmor, Esq.
AZSA Legal & Legislative Chair          

Recent calls suggest that we need to understand when the tried and true – and expensive – certified-mail-return-receipt-requested form of notice must still be used, and when the much cheaper certificate-of-mailing is enough.

Certificate-of-mailing is easiest to understand. When we foreclose our storage liens we must send out two notices, the first of which may be sent by "verified mail." That's a legal term meaning "any method of mailing that is offered by the United States Postal Service . . . that provides evidence of mailing." There are several such methods, the cheapest and easiest being certificate-of-mailing.

Our lien statute requires that we send notices. It does not require that the tenant receive them. The law is written that way for a reason, and it's not because we are trying to dodge any responsibility. When we finally send pre-auction notices we are creditors chasing a debtor trying to get ourselves paid. Delinquent tenants often actively avoid contact with us. In the old days of certified notices, the majority of the green cards were returned unsigned. So the law makes sure that we send the notices. If tenants are foolish enough to avoid receiving and reading them, that's their problem.

This discussion has nothing to do with late letters, by the way. How many you send, what you call them, and in what manner you mail them (certified mail included) are just functions of company policy.

There are some times when using certified mail is necessary. They all have to do with changes to lease terms. Incidentally, when I say "certified mail," I mean "certified-mail-return-receipt-requested." There is frankly no point in sending certified mail without the benefit of getting a signed green receipt of delivery back.

A lease is at its heart a contract, an agreement between parties listing their respective rights and responsibilities. A month-to-month lease is a contract that lasts for one month only, but it contains language that says that unless one of the parties takes action, the contract renews automatically each month upon the same terms and conditions. In effect, each month has a new lease.

Now suppose all of your leases for certain spaces call for rent of $85 per month. When tenants signed those leases they were promising to pay $85 for that month and for each renewal month thereafter.

Now suppose that you decide to raise the amount of rent on those units to $100 per month. The problem is that you cannot change someone else's promise. You would be putting words in their mouth. If you did that and later got sued by the tenants, the judge would simply ask them, "How much was the promise?" When the answer comes back "$85," end of lawsuit; you lose.

What you can do is ask tenants to revise their promises and agree with you that the monthly rent on subsequent renewals will be $100. You can do that in a letter or even a telephone call. But you need something in your file to prove that the tenants agreed to change their promises from $85 to $100. That could be a new lease, of course. It could also be a letter from tenant agreeing to pay $100.

There is a third way. (You're subjected to this method all the time by your credit card company as it constantly changes the terms of your credit card agreement.) You can send a letter to the tenant advising of an increase in the rent coming in 30-days and add this provision to the letter:

Your continued occupancy of the space after [date of rent increase] indicates your agreement to the new rental rate. If you do not wish to be bound by the new rate, you must vacate the space by or before [date of rent increase].

Still, you must be able to prove that the tenant knew about this choice. Solution: Send the letter by certified mail. Now you have: A copy of your letter, a certified mail delivery receipt signed by the tenant showing that (s)he received the letter, and finally, tenant's continued occupancy. It adds up to a new promise by tenant to pay $100 instead of $85.

You should use this method for any change in lease terms: rent rates, late fee amounts (if you publish them in your lease; the law does not require that late fee amounts be in the lease), etc. You can even use this method to switch to an all new lease, for example the AZSA Standardized Lease (subtle, subtle, hint, hint).

The important thing to recognize is that using certified mail remains a necessary and very useful tool.

[This article deals with a law related subject at a general level and is not intended for you to rely on. You should consult a lawyer before making a final decision in a situation involving any legal issues.]

Richard Marmor, Esq. is a self-storage consultant, facility owner and former facility operator in the Phoenix area. He is also the founding President and current member of the Board of Directors of the Arizona Self-Storage Association, serving as Chair of the Legal and Legislative Committee.

Source: Behind Closed Doors, AZSA Newsletter Archives