2021 -- S 0407 SUBSTITUTE A | |
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LC002107/SUB A | |
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STATE OF RHODE ISLAND | |
IN GENERAL ASSEMBLY | |
JANUARY SESSION, A.D. 2021 | |
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A N A C T | |
RELATING TO PROPERTY -- DRY DOCK FACILITIES | |
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Introduced By: Senators Felag, Euer, DiPalma, Sosnowski, and Miller | |
Date Introduced: February 25, 2021 | |
Referred To: Senate Judiciary | |
It is enacted by the General Assembly as follows: | |
1 | SECTION 1. Sections 34-46-2, 34-46-4, 34-46-5 and 34-46-6 of the General Laws in |
2 | Chapter 34-46 entitled "Dry Dock Facilities" are hereby amended to read as follows: |
3 | 34-46-2. Definitions. |
4 | As used in this chapter, the following words shall have the following meanings unless the |
5 | context clearly indicates otherwise: |
6 | (1) "Default" means the failure to pay obligations incurred by the storage of a vessel and |
7 | associated charges. |
8 | (2) "Dry dock" means any space and/or real property designed and/or used for the purpose |
9 | of renting or leasing storage space for vessels. |
10 | (3) "Facility" means a marina, boatyard, or marine repair facility that provides, as part of |
11 | its commercial operation, the storage of vessels. |
12 | (4) "Last known address" means that address provided by the owner in the latest rental |
13 | storage agreement or the address provided by the owner in a subsequent notice of a change of |
14 | address. |
15 | (5) "Lien holder" means a person holding a security interest. |
16 | (6) "Operator" means the proprietor, operator, lessor, or sublessor of a dry dock facility, |
17 | his or her agent, or any other person authorized by him or her to manage the facility or to receive |
18 | rent from the owner under a rental agreement. |
19 | (7) "Owner" means a person, other than a lienholder, having a property interest in or title |
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1 | to a vessel. The term includes a person entitled to use or have possession of a vessel subject to an |
2 | interest in another person, reserved, or created by agreement and securing payment or performance |
3 | of an obligation, but it does not include a lessee under a lease not intended as security. |
4 | (8) "Personal property" means movable property not affixed to land and includes, but is |
5 | not limited to equipment, goods, furniture, and household items whether affixed to the vessel or |
6 | not. |
7 | (9) "Rental Storage agreement" means any written agreement or lease that establishes or |
8 | modifies the terms, conditions, rules, or any other provisions concerning the storage of a vessel in |
9 | a dry dock facility. |
10 | (10) "Vessel" means every description of watercraft used or capable of being used as a |
11 | means of transportation on water and any personal property located thereon and shall include its |
12 | appurtenances. |
13 | 34-46-4. Notice of lien. |
14 | (a) A vessel owner must be notified of the lien created by this chapter before enforcement |
15 | of the lien by a facility operator. Notification of the lien created by this chapter is satisfied by: |
16 | (1) Written storage agreement. A written storage agreement signed by the vessel owner |
17 | that includes a notice of the lien created by this chapter the following language in bold, capitalized |
18 | font: "BEWARE -- THE VESSEL AND ITS CONTENTS MAY BE SOLD AT PUBLIC |
19 | AUCTION FOR FAILURE TO PAY STORAGE CHARGES PURSUANT TO THE DRY DOCK |
20 | FACILITIES ACT, CHAPTER 46 OF TITLE 34."; or |
21 | (2) Written notice of lien. Written notification of the lien sent by the facility operator to the |
22 | last known address of the vessel owner and, where applicable, to the last known address of the |
23 | person or entity the facility operator has on record as being responsible for the vessel, if different |
24 | from the vessel's registered owner to the vessel owner. |
25 | (b) A facility operator who does not have a written storage agreement that includes a notice |
26 | of the lien created by this chapter may not initiate an enforcement action under § 34-46-5 until |
27 | thirty (30) days after the written notice of a lien required by subdivision (a)(2) is delivered to the |
28 | vessel owner delivery of written notice of the lien pursuant to this chapter. |
29 | 34-46-5. Enforcement of lien. |
30 | A facility operator may enforce a lien created by this chapter only if the vessel owner has |
31 | been notified of the lien as required by § 34-46-4 notice requirement set forth in § 34-46-4 is |
32 | satisfied. |
33 | (1) Sale -- Use of proceeds. |
34 | (i) If a vessel owner is in default for a period of more than ninety (90) days, a facility |
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1 | operator may enforce a lien by selling the stored vessel at a commercially reasonable public sale |
2 | for cash. As used in this section, "commercially reasonable" shall have the same meaning as in the |
3 | Uniform Commercial Code. The proceeds of the sale shall be applied in the following order: |
4 | (A) To the reasonable expenses of the sale incurred by the facility operator including, but |
5 | not limited to, reasonable attorneys' fees, legal expenses and expenses of advertisement; |
6 | (B) To the satisfaction of the lien created by this chapter; |
7 | (C) To the satisfaction of all other liens on the vessel held by all lienholders of record to |
8 | be paid in the order of priority; and |
9 | (D) To the extent that the proceeds of sale exceed the sum of the foregoing, the surplus |
10 | must be paid by the facility operator to the vessel owner. Where the surplus is not collected within |
11 | thirty (30) days of the sale, the facility operator shall provide the funds to the general treasurer as |
12 | unclaimed property. |
13 | (ii) If proceeds of the sale are not sufficient to satisfy the vessel owner's outstanding |
14 | obligations to the facility operator or any lienholder of record, the vessel owner remains liable to |
15 | the facility operator and/or lienholder for the deficiency. |
16 | (2) Advertisement -- Notice of default. Before conducting a sale under this section, the |
17 | facility operator shall: |
18 | (i) Personally serve a notice of default on the vessel owner if the vessel owner is a Rhode |
19 | Island resident, and where applicable, . If the vessel owner is not a Rhode Island resident, notice |
20 | shall be in accordance with subdivision (7). The facility operator shall provide a copy of the notice |
21 | to each lienholder of record. The notice must include: personally serve a notice of default on the |
22 | person or entity the facility operator has on record as being responsible for the vessel if different |
23 | from the vessel's registered owner, if the person or entity is a Rhode Island resident. |
24 | (A) After a licensed process server makes three (3) attempts at personal service on different |
25 | days and at different times of the day at the last known address of the vessel owner and the person |
26 | or entity the facility operator has on record as being responsible for the vessel if different than that |
27 | of the vessel's registered owner, service will be deemed effectuated by leaving a copy of the notice |
28 | of default in the door of the residence and mailing a copy of the notice of default in accordance |
29 | with subsection (7) of this section. |
30 | (B) The licensed process server will provide an affidavit detailing the attempts at personal |
31 | service including the date, time and location of each attempt, efforts to find an alternate address for |
32 | service, where and when the notice was left and the mailing of the notice. The notice will be deemed |
33 | delivered on the date the notice is left at the residence. |
34 | (ii) In the event that either the vessel owner or the person or entity the facility operator has |
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1 | on record as being responsible for the vessel if different from the vessel's registered owner are not |
2 | Rhode Island resident(s), notice shall be in accordance with subsection (7) of this section. The |
3 | facility operator shall provide a copy of the notice to each lienholder of record. In addition, the |
4 | facility operator shall affix a copy of the notice of default on the outside of the vessel in a manner |
5 | where it can be reasonably seen. |
6 | (iii) The notice of default must include: |
7 | (A) A statement that the vessel is subject to a lien held by the facility operator; |
8 | (B) A statement of the facility operator's claim indicating the charges due on the date of |
9 | the notice, the amount of any additional charges that will or may become due before the date of |
10 | sale, and the date those additional charges will become due; |
11 | (C) A demand for payment of the charges due within a specified time not less than forty |
12 | (40) thirty (30) days after the date the last notice of default required hereunder is delivered to the |
13 | vessel owner or the person or entity the facility operator has on record as being reasonable for the |
14 | vessel; |
15 | (D) A statement that unless the claim is paid within the time stated the vessel will be sold, |
16 | specifying the time and place of the sale; and |
17 | (E) The name, street address, and telephone number of the facility operator, or the facility |
18 | operator's designated agent, whom the vessel owner or the person or entity the facility operator has |
19 | on record as being responsible for the vessel may contact to respond to the notice; |
20 | (ii)(iv) After the expiration of the forty (40) thirty (30) day period set forth in subdivision |
21 | (2)(i)(C) subsection (2)(iii)(C) of this section, the facility operator shall publish an advertisement |
22 | of the sale once a week for two (2) consecutive weeks in a newspaper of general circulation in the |
23 | area where the sale is to be held and of general circulation in the state. The advertisement must |
24 | include a general description of the vessel, the name of the vessel owner, and, if applicable, the |
25 | person or entity the facility operator has on record as being responsible for the vessel and the date, |
26 | time and place of the sale. The date of the sale must be more than fifteen (15) days after the date |
27 | the first advertisement of the sale is published. In addition, the facility operator shall affix a copy |
28 | of the advertisement on the outside of the vessel in a manner where it can be reasonably seen. |
29 | (3) Location of sale. A sale under this chapter must shall be held at the facility or at the |
30 | nearest suitable location. |
31 | (4) Purchasers. A purchaser of a vessel sold at a sale pursuant to this chapter takes the |
32 | vessel free and clear of any rights of persons against whom the lien was valid and all other |
33 | lienholders of record. |
34 | (5) Facility operator liability. If the facility operator complies with the provisions of this |
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1 | chapter, the facility operator's liability is as follows: |
2 | (i) To a lienholder of record, the facility operator's liability is limited to payment from the |
3 | net proceeds received from the sale of the vessel pursuant to § 34-46-5; and |
4 | (ii) To the vessel owner, the facility operator's liability is limited to the net proceeds |
5 | received from the sale of the vessel after payment in full of all lienholders of record pursuant to |
6 | this section. |
7 | (6) Denying access to storage facility. A facility operator may deny a vessel owner who |
8 | has been notified under § 34-46-4 access to the storage facility, except that the vessel owner or |
9 | responsible party is entitled to access to the facility during normal business hours for the purpose |
10 | of satisfying the lien or viewing and verifying the condition of the vessel. |
11 | (7) Notices. Except as otherwise provided in subdivision (2)(i), all notices required by this |
12 | chapter must be sent by registered or certified mail, return receipt requested must be served by |
13 | registered or certified mail, return receipt requested or by a recognized commercial courier with |
14 | proof of signed-for delivery. Notices sent to a facility operator must be sent to the facility operator's |
15 | business address or to the address of the facility operator's designated representative. Notices to a |
16 | vessel owner or the person or entity the facility operator has on record as being responsible for the |
17 | vessel must be sent to the vessel owner at the vessel owner's person's or entity's last known address. |
18 | Notices to a lienholder of record must be sent to the address of the lienholder as provided in the |
19 | public filings that serve to perfect the lienholder's interest in the vessel. The lienholder's identity |
20 | and address that the department of environmental management has in its records shall be provided |
21 | to the facility operator upon written request and certification that the request is made solely for the |
22 | purposes of complying with the provisions of this chapter. Notices Except as otherwise provided |
23 | by this chapter, notices are considered delivered on the date the return receipt or proof of delivery |
24 | is signed or, if the notice is undeliverable, the date the post office or commercial courier last |
25 | attempts to deliver the notice. |
26 | 34-46-6. Cessation of enforcement actions. |
27 | A facility operator shall cease enforcement actions immediately upon any of the following: |
28 | (1) Payment by owner. The vessel owner pays the facility operator the full amount |
29 | necessary to satisfy the lien on the date payment is tendered. At any time before the conclusion of |
30 | a sale conducted under this chapter, the vessel owner may redeem the vessel by paying the full |
31 | amount necessary to satisfy the lien of the lien on the date payment is tendered; |
32 | (2) Payment by other lienholders. A person other than the facility operator who has a lien |
33 | on the vessel pays the facility operator the full amount necessary to satisfy the lien held by the |
34 | facility operator. Upon payment by a lienholder of record, the facility operator shall hold the vessel |
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1 | for the benefit of and at the direction of that lienholder and may not deliver possession of the vessel |
2 | to the vessel owner. Unless the facility operator and the lienholder enter into a new storage |
3 | agreement, the lienholder shall arrange removal of the vessel from the facility forthwith; or |
4 | (3) Initiation of Civil Action. An owner of a vessel or one claiming ownership rights in the |
5 | vessel files in a court of competent jurisdiction and serves on the facility operator, not less than ten |
6 | (10) days before the scheduled date of sale, a complaint against the facility operator relating to the |
7 | obligations incurred by the storage of the vessel or any claims related to the vessel and in such |
8 | complaint objects to the enforcement of the lien and sets forth the legal reasons why the lien should |
9 | not be enforced. The enforcement action shall not resume until either the civil action is resolved or |
10 | the court enters an order permitting the enforcement action to proceed. |
11 | SECTION 2. Section 34-46-7 of the General Laws in Chapter 34-46 entitled "Dry Dock |
12 | Facilities" is hereby repealed. |
13 | 34-46-7. Rental agreements -- Notice of this chapter. |
14 | All rental agreements which are subject to this chapter shall contain clear and conspicuous |
15 | language as follows: "BEWARE -- THE VESSEL AND ITS CONTENTS MAY BE SOLD AT |
16 | PUBLIC AUCTION FOR FAILURE TO PAY STORAGE CHARGES." |
17 | SECTION 3. This act shall take effect upon passage. |
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LC002107/SUB A | |
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EXPLANATION | |
BY THE LEGISLATIVE COUNCIL | |
OF | |
A N A C T | |
RELATING TO PROPERTY -- DRY DOCK FACILITIES | |
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1 | This act would amend the lien and notice procedures for facility operators of dry dock |
2 | facilities. |
3 | This act would take effect upon passage. |
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LC002107/SUB A | |
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