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33-1704. Enforcement of lien

A. If the occupant is in default for a period of more than thirty days, the operator may foreclose the lien by selling the property stored in the leased space at a public sale, for cash, or if the property is protected property, by disposing of the property pursuant to this section. Proceeds shall then be applied as provided in subsection G of this section. If the contents of the leased space include a vehicle, section 28-4839 does not apply.

B. Before conducting a sale under subsection A of this section, the operator shall:

1. Send notice of the default by verified mail or electronic mail to the occupant at the occupant's last known address.

2. Send a second notice of default by first class mail not less than seven days after the mailing date of the first notice to the occupant at the occupant's last known address that includes:

(a) A statement that the contents of the occupant's leased space are subject to the operator's lien.

(b) A statement of the operator's claim, indicating the charges due on the date of the notice and any other charges that may accrue.

(c) A demand for payment of the charges due within a specified time, not less than fourteen days after the mailing date of the second notice or thirty additional days if the address of the occupant is outside of the continental United States.

(d) A statement that unless the claim is paid within the time stated the contents of the leased space will be sold at a specified time and place, or in the case of protected property, otherwise disposed of at a specified time and place.

(e) The name, street address and telephone number of the operator, or the operator's designated agent, whom the occupant may contact to respond to the notice.

3. If the contents of the leased space include a vehicle:

(a) At the time the notice is sent pursuant to paragraph 1 of this subsection, send a notice of default by verified mail to the registered owner at the registered owner's most recent address as shown in the records of the department.

(b) At the time the notice is sent pursuant to paragraph 2 of this subsection, send a notice of default by first class mail to the registered owner at the registered owner's most recent address as shown in the records of the department.

(c) The operator is not required to send a notice pursuant to this paragraph if ownership information for a vehicle is unavailable.

(d) In any notice that is sent, include a description of the vehicle and its vehicle identification number.

4. At least ten days before the sale, send notice by verified mail to any record lienholder or secured party who has an interest in the property to be sold, of whom the operator has actual or constructive knowledge either through the disclosure provision of the rental agreement or through any other written or recorded notice of the sale, that any prior record lienor or secured party may at any time before the sale recover possession of the item of personal property to which the record lien or security interest attaches.

C. At any time before a sale under this section or before the disposal of protected property, whichever occurs first, the occupant may pay the amount necessary to satisfy the lien and redeem the occupant's personal property.

D. If the personal property includes a vehicle, any person listed as a registered owner or lienholder on the records of the department may pay the amount necessary to satisfy the lien, redeem the vehicle and recover possession of the vehicle. The operator is not liable to the occupant or any other person who claims an interest in the vehicle if the operator releases the vehicle to a person listed as a registered owner or lienholder pursuant to this subsection.

E. If the personal property is subject to a restitution lien, any person listed as the holder of the restitution lien in the public records may pay the amount necessary to satisfy the lien, redeem the personal property and recover possession of the personal property. The operator is not liable to the occupant or any other person who claims an interest in the personal property if the operator releases the personal property to a person listed as a restitution lienholder pursuant to this subsection.

F. If the leased space contains protected property and the operator has actual knowledge of the protected property, the protected property shall not be sold but is subject to disposal by the operator. The operator is not liable to the occupant or to any other person who claims an interest in protected property if the operator disposes of the protected property pursuant to this section. Proper disposal methods include destruction of the protected property or surrendering the protected property to appropriate state or federal authorities if those appropriate state or federal authorities accept the protected property.

G. If a sale is held under this section, the operator shall distribute the proceeds in the following manner:

1. To pay all reasonable costs of sale.

2. To satisfy the valid claims of any lienholder or secured party not otherwise subordinated pursuant to section 33-1703, subsection A.

3. To satisfy the operator's lien.

4. To satisfy the valid claims of any record lienholder or secured party subordinated pursuant to section 33-1703, subsection A.

5. To the occupant on demand.

6. If the occupant does not claim the balance due to the occupant within ninety days of the sale, the operator shall pay the balance to the department of revenue. If the occupant, at any time within two years from the date of payment to the department of revenue, establishes the occupant's right to the money to the satisfaction of the director of the department of administration, it shall be paid to the occupant. After two years, all unclaimed monies shall be deposited in the permanent state school fund.

H. If five or more bidders who are unrelated to the operator are in attendance at a sale held under this section, the sale and its proceeds are deemed to be commercially reasonable.

I. A purchaser in good faith of any personal property sold under this article:

1. Does not acquire ownership of protected property contained in the leased space and shall return to the operator any protected property that is found in the leased space.

2. Except for protected property prescribed in paragraph 1 of this subsection, takes the property free and clear of any rights of any party.

J. If the operator complies with this article, the operator's liability arising from the sale:

1. To the occupant is limited to the net proceeds received from the sale of the personal property.

2. To other lienholders or a secured party is limited to the net proceeds received from the sale of any personal property covered by that other lien.

K. If an occupant is in default, the operator may deny the occupant access to the leased space.

L. Unless the rental agreement specifically provides otherwise and until a lien sale under this article, the exclusive care, custody and control of all personal property stored in the leased space remain vested in the occupant. If the occupant is in default for a period of more than thirty days and until the time of sale, the operator, in addition to denying the occupant access to the personal property, may transfer the personal property to a place of safekeeping.