Storage Units and You: The Ins and Outs of Renting Storage Units

Storage units can be a great place to store that extra stuff that just will not fit in the garage. We all seem to have a need to store our personally valuable stuff outside of our own home. Yet, how many customers actually read the fine print on the form when deciding to rent a storage unit? What happens to your precious items if they are stolen or there is mildew contamination to them? In many cases, it is a good idea to get out your magnifying glass before you sign that contract.

Overview

As both a current Property Manager and a previous Storage Manager, the author can state that renting a storage unit is similar to a landlord tenant situation but focused on personal property rather than occupancy. There are several differences between a Landlord Tenant Contract and A Self Storage Facility contract:

First, people cannot reside at a Storage Facility except if there is an on site apartment for the manager. Renting to people is legally more complex than renting personal property items to be stored for a person.

Second, Rental Unit Owners and Managers add clauses to reduce liability and eliminate the storage of various items in the unit. The Owner or the Manager must apply the rules and regulations equally to every customer. "What rights does an operator have in turning away prospective tenants, whether the decision is based on credit or criminal information or how the prospect fills out his lease? The answer is he has the right to choose his tenants, as long as leasing decisions are made consistently and without discrimination" (Zucker, 2005).

Third, the renter of the unit is responsible for possessing a reasonable knowledge of the value of the items in their unit. Items are stored at your own risk. The Owner or manager of the complex is simply required to show that he or she is not grossly negligent and provides reasonable maintenance and security for the complex as a whole.

So what should a person expect in their rental contract?

Showing ID

Many contracts begin with filling out a short application and showing identification. Again, the Patriot Act and Homeland Security can require Storage Facility Owners and Managers to prove to whom they rent their units so requiring adequate identification is required at all facilities. In fact, some storage facilities have added an additional fingerprinting requirement and a credit check to the storage renting process. In any case, every tenant has to be treated the same and they all are required to fill out the same form. Most of the forms used by Storage Unit Associations are short and to the point but they do include alternate contact information, email addresses and employment data. Many storage facilities attempt to call the given information within one to two days of receiving the application so that they can verify that the tenant has given the correct employer and home phone. Most Storage Facilities rent month by month to reduce issues with long term leases and to increase general profitability for the complex.

Now what about Fees?

Late Fees

Everybody hates late fees and the imagination just goes wild as to how much money the Storage Owner is collecting by charging those fees. However,
a properly worded contract does not attempt to punish people for being late. Rather, "fees should be charged to "reimburse" the landlord for its costs" (Zucker, 2007). Punitive fees can be difficult to collect should the case be heard before a judge in a smalls claims court case. Fees should always be reasonable and not exceed documentable costs. If you feel that your storage facility is charging excess fees then you have the right to seek legal counsel or rent at another facility.

Damaged Goods

You open your unit and notice that your items are lost, stolen, or damaged. What do you do? First, go back to your original paperwork. Odds are that the contract you signed indicates that all items stored at the facility are done so at the sole risk of the tenant . Sole Risk is generally taken to mean that the landlord is not legally liable for the items stored in your units. Are there exceptions? Yes and No. The big question is whether or not the owner was negligent or deliberately attempted to harm the items. Owner negligence is a complicated issue and one that usually winds up in court.

There are several specific clauses that further reduce liability in each and every contract.

Fungus and mold problems are a recent scourge of the storage industry. Most storage units lack climate controls and few units are properly vented to prevent moisture buildup. Look for release clauses that release the owner from being responsible for mildew.

Most storage facilities meet fire department rules and regulations. Still, many older units do not have sprinklers in each unit and existing sprinklers may malfunction. Your items can easily be damaged or destroyed and the owner is usually not liable for the damage.

Theft? Again, items are stored at the Sole Risk of the tenant. Prospective renters should inquire about security measures and theft rates before they rent a unit. In my case, I once managed a large storage facility in the Bay Area. The facility was in a high crime area but the security was poor. Once, the security cameras were stolen and fake ones were put in there place to discourage theft until new ones could be installed.

Consequences:

Read your contract before you sign. Owners have the right to lien and eventually foreclose for all items stored without payment at a facility. The owner or manager can report their delinquent units to a collection agency. This is why an owner can over lock your unit if you are late. However, many states have their own procedures for Storage Unit Liens and Foreclosures. For example, most states require unit owners to post their foreclosures in a local paper before they foreclose and auction the items in a unit. Storage Unit Contracts should have wording that updates the form to existing State lien laws or else the owner of the unit can find themselves in hot water if they attempt to improperly sell the contents of a unit. Again, ask questions and keep notes. If the unit feels unsafe - do not rent there even if the prices are a bit lower.

Auctions

Failure to pay for a storage unit can result in the loss of any and all items stored in the unit. The auction process may be painful but it can be fun to bid at unit auctions because they are open to the public. Prior to the auction and according to State regulations, the storage facility owner or manager opens the unit, photographs the contents and then re-locks the unit. Sometimes a second person is required to view the contents of a unit once the lock is cut and the contents are viewed by the owner or manager. In any case, bidders on individual storage units are usually working 'blind' and therefore can only guess at the value of the items stored in the unit.

References:

Zucker, S. (2005). Self Storage and Homeland Security retrieved June 20, 2007 from http://www.insideselfstorage.com/articles/344/344_531feat2.html

Zucker, S. (2007). Charging Fees ...Keeping It Legal. Self Storage Now. Phoenix, AZ, 2007