Preventing Discrimination Suits
Copyright 2014 by Virgo Publishing.
By: Kenneth M. Piken
Posted on: 03/01/2008



 

There are many circumstances under which a self-storage operator can choose not to rent a unit to an individual. Of course, the exposure to the operator could be enormous if the necessary safeguards aren’t instituted prior to the “refusal.”

Your rental procedures and requirements should be clearly established and posted in a conspicuous place for all prospective customers to see, and they should be applied consistently to all renters. For example, a facility might request two forms of identification, and a valid credit card may be a condition of the rental.

Any deviation from these standards would constitute a waiver, compromising the rights of the facility. It could also result in the operator being viewed as acting in a discriminatory manner. This would certainly give rise to an action against the company for violation of human-rights laws.

A complaint was filed in the State Division of Human Rights in the Executive Department of the State of New York alleging unlawful discriminatory practices as to national origin. A self-storage customer was refused a unit and claimed the decision was based on race; but the facts revealed he could not produce the required forms of ID, i.e., a valid address or phone number. These prerequisites were clearly listed at the facility. The Executive Department found that since these procedures were established and followed, refusal to rent a unit did not constitute discrimination in this case.

Be Aware of Violations Laws

In addition to human-rights violations, there are other complaints that can be filed against a storage operator including EEOC (equal employment opportunity council) violations and violations of Federal Civil Rights Assertions, commonly known as 1982 assertions, based on U.S. Codes.

All the matters must be responded to and defended and, of course, at considerable expense. The violations can result in horrendous fines and have a negative impact on a company’s public image.

There’s no clear and simple rule to guide these situations; but any violation of state regulatory rules would ultimately be enforced in accordance with the matter in the U.S. Supreme Court known as Kremer v. Chemical Construction Corp., 456 US 461(1982). The net result would be that for any multi-state storage operation, the findings could be enforced throughout the country at each and every facility being operated by that company.

The formula and solution is one in the same: All storage facilities should clearly post their rules and regulations at the site and within their rental contract. The minimum requirements for unit rental should include the following:

  • Minimum number of IDs needed 
  • Whether a photo is to be on any or all IDs required 
  • Driver’s license or official certification of ISD from a government agency 
  • A valid credit card in the customer’s name 
  • Phone number to contact and whether a cell-phone number will suffice 
  • Authorization for credit check (if the facility uses one) 
  • Emergency contact name, address and phone number 
  • Verifiable legal address (not a P.O. box) Vehicle registration (this is of vital importance for the rental of parking space)

While an operator can establish whatever rules he wishes for the protection of his occupants and facility, he and his staff must adhere to these regulations. It’s a prima facie case of discrimination if one customer is singled out for illegal or illegitimate reasons. There are generally four bases for discrimination: age, sex, race or national origin. A facility’s regulations must not be discriminatory in any way, i.e., they must be applied to all customers uniformly.

The simple fact is once rules are established and followed, it’s hard for a discrimination claim to be successful. Caution is the key word as to the initial establishment of the policies and procedures. Treat each customer or prospect equally, and the issue will be minimized. 

This article is being provided for general information only and does not constitute advice. Anyone with specific questions about this topic must address them to his attorney. This article does not constitute a legally binding relationship of any nature nor is same protected under the attorney-client privilege.

Kenneth M. Piken is a practicing attorney for 25 years and the managing partner in the New York-based law firm of Piken & Associates. The firm, which is more than 50 years old, concentrates on real estate and logistics matters. Mr. Piken was General Counsel for the New York Self Storage Association of more than 15 years. He has lectured throughout the United States and is the author of numerous articles on self-storage. He has been an expert witness in courts throughout the country and participated in drafting and lobbying for lien laws in New York. For more information, visit www.pikenlaw.com .