By Scott Zucker
Editor's note: The following article is reprinted from the Spring 1998 issue of Mini-Storage Law Commentary, a newsletter written by Scott Zucker for mini-storage owners and managers published by the law firm of Shapiro Fussell Wedge Smotherman & Martin, LLP.The legal relationship between a self-storage facility and a party renting space for storage is that of landlord and tenant. That is why the parties use rental or lease agreements to document the terms and conditions of their relationship, rather than a purchase order or sales receipt. The key is that the parties' agreement is in writing. By reducing agreements to writing, the parties hopefully can avoid future disputes.
Today's lease agreements contain all of the provisions necessary to outline the rights of the landlord and the obligations of the tenant with regard to the storage of a tenant's personal property. But, no matter how well a lease is written, there is always some situation that occurs at a self-storage facility that falls "outside" the terms and conditions of the lease agreement as well as the standard operating procedure for the self-storage facility. These situations may involve the settlement of a claim made by a tenant for the loss or damage to his property or a request by a tenant for the facility to do something on his behalf. When a self-storage owner or manager is confronted with such a situation, and the parties can agree on a resolution, it is important that the terms of their agreement again be confirmed in writing for the benefit of both parties.
Without commenting on the appropriateness of a self-storage facility entering into settlements with its tenants on loss or damage claims (or even on a wrongful-sale claim), many times the ability of a facility to resolve tenant claims by paying the tenant a small amount, reducing the tenant's rent or waiving the tenant's rent in its entirety can be a very effective way of resolving future litigation on those claims.
The information contained on a tenant release form should be as specific as possible. However, simple, fill-in-the-blank documents can be used for such a form. In situations where there is a tenant loss or damage claim for which the facility agrees to compensate the tenant, the general release form might read as follows:
|This agreement, entered into this ___ day of ____, between ______ ("Tenant")
and ______ ("Owner") is as follows:
1. Tenant has made a claim that the property contained in Storage Unit No. ______ has been damaged. Tenant states that the damage is as follows: ______________________.
2. Tenant claims that such damage occurred on or about the ___ day of ______, 19___.
3. Owner has denied any liability for loss of or damage to tenant's property.
4. In consideration of $_______ (or owner's agreement to waive rent in the amount of $______), tenant, for itself, its heirs, executors, administrators and assigns, forever releases and discharges owner (defined to include its agents, employees and representatives) from any and all claims, demands, actions and causes of action arising out of tenant's claim as listed above.
Certainly, from the perspective of a storage owner, once an agreement is reached, having the tenant sign a release of its claim against the facility is a strong defense against any future claim brought by that tenant with regard to the loss or damage of its property. In fact, it may be a complete defense to any future claim. It clearly benefits a facility to have a general release form available to use when such situations occur and settlements are reached.
The other type of document that should be created and maintained at a self-storage facility is a form that authorizes a facility to take action on behalf of its tenant, which is not otherwise contemplated by the rental agreement. For example, forms can be created to allow the owner to cut the tenant's lock, allow a third party to enter a tenant's space to remove the tenant's property, or even to verify the abandonment of the tenant's property to the storage facility.
The list of potential authorization forms is endless. Issues arise daily for self-storage managers concerning the release of property where a tenant has died, the transfer of property where there has been a divorce, not to mention the numerous other situations where tenants request that facility owners or operators act on their behalf. In order to protect a facility from potential liability on future claims brought either by the tenant or others, such tenant requests must be put in writing and approved by the tenant through some type of authorization form.
Again, the information contained in a tenant authorization form should be as specific as possible. A general authorization form might read as follows:
|This agreement, enters into this ____ day of _____ between ______ ("Tenant")
and ______("Owner") is as follows:
1. Tenant has authorized that the owner has the authority to do the following:
2. Owner has agreed to the tenant's request, conditioned on the tenant's approval of this agreement.
3. Tenant releases owner (defined to include its agents, employees and representatives) from any and all claims, demands, actions and causes of action arising out of the loss of or damage to tenant's stored goods. Tenant agrees to indemnify, defend and hold the owner harmless from any claims arising from any third parties.
4. This agreement is incorporated by reference into the tenant's rental agreement. The provisions of the rental agreement shall govern and no provisions of that agreement shall be waived by operation of this document.
Scott Zucker is an attorney with the Atlanta-based law firm of Shapiro Fussell Wedge Smotherman & Martin. Mr. Zucker, who specializes in self-storage law, is a frequent contributor to Inside Self-Storage and a regular speaker at Inside Self-Storage Expos. He may be reached at (404) 870-2232.