If you are a storage company and you want to foreclose upon or remove automobiles parked or stored on your property in the event that rent is not paid in a timely manner, be wary of Georgia’s Self-Storage Facility Act.  The essence of the issue is whether Georgia law allows self-storage facilities to sell a vehicle left in a space subject to lien foreclosure.  The straight answer is that the law is unclear.

The safest way to resolve the situation is to follow the usual procedures under the self-storage statutes but to also have statutorily compliant towing signs posted on your property and then have a licensed towing company tow away the vehicle.  You should check with Title 44 of the Official Code of Georgia to ensure a compliant tow.  Aggressive application of the self-storage law seemingly allows sale of a motor vehicle; such an aggressive approach, however, could create problems because the self-storage law is not necessarily consistent with other laws.

Georgia law addresses foreclosure on a motor vehicle through the Georgia Self-Service Storage Facilities Act.  O.C.G.A. § 10-4-210 et. seq.  It was amended in 2000 to specifically include motor vehicles.  This Act allows the self-storage facility to place a lien upon personal property, including motor vehicles, trailers, and watercraft, located at the facility, after default under the lease.   However, the statute does not say how to pass title so it could cause problems.  There are other alternatives as well; you conceivably could utilize Georgia’s Abandoned Motor Vehicles Act or Georgia’s Derelict Motor Vehicles Act.  These statutes are much more complicated and compliance with them requires voluminous paperwork and time.

The Georgia Self-Service Storage Facilities Act, (“SSFA”), O.C.G.A. § 10-4-210 et. seq., allows a self-storage facility to acquire a lien on the stored personal property without judicial intervention.  Therefore, your storage company has a lien on all personal property placed in the storage space as soon as the lease agreement is signed.  O.C.G.A. § 10-4-212 & 213.  Under this Act, an occupant who fails to pay rent for their stored vehicle on the tenth of the month due is considered to be in default.  After thirty days of continuous default, the owner may enforce its lien.  After notice, if no one purchases the vehicle at the ensuing public sale, your storage company may dispose of the personal property and shall notify the occupant of the action taken.  Any sale or disposition of the personal property shall be held at that particular self-storage facility or at the nearest suitable place to where the personal property is held or stored.  At all times before the sale, the occupant can satisfy the lien and any reasonable expenses occurred by your storage company.  O.C.G.A. § 10-4-213.

II.         Georgia’s Self-Storage Facility Act Was Amended in 2000 to Treat Vehicles as Personal Property.

Although the previous version of the code section excluded motor vehicles, the statute was amended in 2000 to specifically include motor vehicles as personal property.  The legislature changed the statute to state that the definition of ‘personal property’ for purposes of an owner’s lien, “means moveable property, not affixed to land, and includes, but is not limited to, goods, wares, merchandise, motor vehicles, watercraft, household items, and furnishings.” O.C.G.A. § 10-4-211.

III.        Even Good Faith Compliance with the SSFA Could Expose Liability Under Georgia’s Motor Vehicle Certificate of Title Act.

If you seek to sell a stored vehicle through a SSFA lien, you could be in violation of the Georgia’s Motor Vehicle Certificate of Title Act (“MVCTA”) because neither the SSFA nor its legislative history address the implications of enforcing a lien on a stored vehicle without properly transferring the vehicle’s title.  According to Georgia courts, the MVCTA “provides the exclusive procedure for perfecting a security interest in a motor vehicle in Georgia”.  Metzger v. Americredit Financial Services, Inc., 273 Ga. App. 453, 455, 615 S.E.2d 120 (2005) (emphasis added). See Also Staley v. Phelan Finance Corp. of Columbus, 116 Ga. App. 1, 1-2, 156 S.E.2d 201 (1967).  Therefore, the legality of a SSFA vehicle lien is unclear because the SSFA provides neither an exception nor an exemption to the MVCTA’s requirements.  For example, the Abandoned Motor Vehicle Act provides sections dealing with sale and title in O.C.G.A. §§ 40-11-6 & 40-11-7.

The requirements of perfecting a vehicle lien under the MVCTA differ from the lien perfection under the SSFA.  O.C.G.A. § 40-3-53, of the MVCTA, entitled “Perfection and Enforcement of Liens Generally”, states that “[i]f the holder of any lien . . . desires to perfect such lien against a vehicle, the lienholder shall . . . execute a title application and notice of lien stating the type of lien and the specific vehicle against which the lien is claimed.” O.C.G.A. § 40-3-53.  Under O.C.G.A. § 40-3-50, a security interest in a motor vehicle is perfected, at the latest, on the date when the application documents for obtaining a certificate of title are delivered to the DMV.  See Metzger 273 Ga. App. 453, 455-456 (2005). There seems to be a conflict in the statutes and no Georgia case has resolved the discrepancy between the SSFA and the MVCTA.  Should you foreclose on a vehicle through a SSFA lien, it could be contended that we should also follow the requirements of the MVCTA.  Therefore, it is arguable that selling a vehicle without proof of a lien or security interest may run counter to the law.

IV.        A Court’s Resolution of this Statutory Conflict May Hold that Your Storage Company is Liable for Selling a Vehicle it Does not Own.

To resolve conflicts between statutes, Georgia law follows the rule that “specific statutes govern over more general statutes where they are in conflict.” Wadkins v. Smallwood 243 Ga. App. 134, 137, 530 S.E.2d 498, 503 (2000).  See Also Glinton v. And R, Inc., 271 Ga. 864, 524 S.E.2d 481 (1999).  Additionally, specific statutes will govern over general statutes, “absent any indication of a contrary legislative intent, to resolve any inconsistency between them.” Cobb County v. City of Smyrna, 270 Ga. App. 471, 475, 606 S.E.2d 667, 670 (2004).

If a court analyzes the conflict between the SSFA and the MVCTA, it may hold the latter statute to control because it is more specific as to perfecting a security interest on a motor vehicle in Georgia.  The SSFA, historically, deals with liens on personal property in general.  Even after the 2000 Amendment to the SSFA to include motor vehicles as personal property, courts have held that the MVCTA “provides the exclusive procedure for perfecting a security interest in a motor vehicle in Georgia”.  Metzger v. Americredit Financial Services, Inc., 273 Ga. App. 453, 455, 615 S.E.2d 120, 123 (2005).  Furthermore, there is no language in the newly amended SSFAt that attempts to resolve the inconsistencies between these two statutes.

V.         A Plaintiff Could Try to Hold You Liable for Conversion if we Foreclose on a Vehicle Through the SSFA.

Should you sell a vehicle through the Self-Storage Facility Act, it could be argued you are liable for conversion due to the conflict between these two Georgia statutes regarding enforcing liens on automobiles.  In Georgia, the tort of conversion involves an act of dominion wrongly asserted over another’s property.  Faircloth v. A.L. Williams & Associates, Inc., 206 Ga. App. 764, 767 (1992).  To make out a prima facie case for conversion, the plaintiff must show (1) title to the property; (2) possession by the defendant, (3) demand for possession; and (4) refusal to surrender the property.  Taylor v. Powertel, Inc., 250 Ga. App. 356, 358, 551 S.E.2d 765 (2001).  A party liable for conversion may also be subject to punitive damages if the conduct was willful and intentional.  Lawrence v. Direct Mortgage Lenders Corp., 254 Ga. App. 672, 563 S.E.2d 533 (2002).  A vehicle owner who holds title could sue you for conversion by pleading that you intentionally and willfully sold a vehicle you did not own, without ever complying with Georgia’s Motor Vehicle Certificate of Title Act.