Legal Question in Business Law in California

Re: Storage Fees

The old term used to be "bailment," and you still encounter this sometimes, but the current California term for keeping someone else's property for them is called deposit. The subject is covered in the Civil Code at sections 1813 et seq.

Deposits are divided into voluntary and involuntary. Most are voluntary, such as when a friend parks his car in the other half of your garage or you leave your watch at the jeweler for repairs. An involuntary deposit is typically where you rescue a stray animal and keep it until claimed, or when you leave your hat on the rack at the restaurant by mistake.

Deposits are also divided into 'for safe keeping' and 'for exchange.' The first category assumes the article will be returned to the depositor; the second is typified by a consignment at a thrift shop or with an eBay reseller.

Deposits can further be classified as gratuitous or storage. All involuntary deposits are gratuitous, and the depositary is not entitled to a fee or reward (although you can give one if you want!). Some voluntary deposits are also gratuitous, and that's apparently what your keeping of the vehicle would be classified as currently - voluntary and gratuitous.

If a deposit is voluntary and not gratuitous, it is called storage. Note that technically you have been keeping the vehicle for your friend, but to this point it would not be considered "storage" under the Civil Code (section 1851.)

What you have to do is terminate your gratuitous deposit, then turn it into a deposit for hire. The gratuitous deposit can be terminated by restoring the vehicle to its owner, or by giving him reasonable notice to remove it and him failing to do so within a reasonable time thereafter. Civil Code section 1847.

So, I would deliver a notice to your friend by a means whereby it is very likely to reach him - not just tacking it on his door or mailing it by regular mail to his last-known address. Use certified mail or personal delivery. The notice should give him a reasonable time to remove the vehicle, after which you will store it for him at $X a month. Give him ample time.

Also note that the depositary (you) has different duties of care with respect to the deposited article under each type of deposit. With a gratuitous deposit, you have only a slight duty of care; under a deposit for hire (storage), you are required to use ordinary care in order to avoid possible liability for damage.

In the vehicle context, "slight care" might mean making sure the windows were rolled up during the rainy season. "Ordinary care" might go further to require that you park it in a safe place and keep it looking as though it is not abandoned.