Hazardous Waste

D. Carlos Kaslow Comments
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The discovery of hazardous materials in a self-storage unit raises the prospect of nightmarish consequences for the facility owner. The nightmare begins with the discovery of the toxic material, and the level of fear rises if the tenant who placed the illegal property in the space cannot be located.

Under the Comprehensive Environmental Response and Liability Act and similar state laws, the facility operator is strictly liable for the cost of the removal and legal disposal of the hazardous materials if the tenant cannot be found or cannot pay the disposal costs. This rule may not seem fair, but it is the law. Storage operators should operate their facilities with this potential exposure in mind.

Not only does the law unfairly penalize innocent landowners, but if hazardous materials are discovered, few storage operators have insurance to cover the costs of removing them. Standard property and liability package policies exclude hazardous-material-cleanup claims. Some of the self-storage specialty insurers have endorsements that cover this risk, but few storage operators carry this coverage. The cost of rectifying even a minor hazardous-materials incident can be several thousand dollars, and the removal and disposal of more dangerous chemicals can cost tens of thousands of dollars. Failure to deal with a problem when it is discovered can lead to hefty fines and even criminal prosecution.

So how do you protect your facility from becoming a toxic-waste dump site? Obviously, the best approach is prevention. There is no perfect system that can be adopted to prevent tenants from storing illegal materials at your facility, but there are some simple things you can do that will reduce the risks:

  • Make it clear to your customers that they may not store hazardous or toxic materials in their storage spaces. This policy should be stated in the rental agreement. Signs prohibiting the storage of hazardous materials should be posted in the office and around the facility.
  • Identify your customer. When you rent a storage unit, request positive identification, including a driver's license and Social Security number at a minimum. A good skip tracer can find most individuals if it has these two pieces of information. Also insist on a physical address from your customer--a P.O. box is not sufficient. This may discourage some customers from renting from you, but it may deter potential dumpers from renting space at your facility.
  • Quickly verify the personal information provided by the tenant. A letter should go out to the addresses provided by the customer and calls should be made to the phone numbers. This contact can be made with a pleasant welcome letter and phone call. If the information is incorrect or false, remove the tenant's gate code from the system until the discrepancy is corrected. If you are lucky, you may catch the error before the tenant even stores any property with you. This procedure will also correct inadvertent errors that could impact your lien rights.
  • Have a very public policy that every vehicle is subject to search upon entry into the facility. This policy should be enforced whenever an unmarked covered truck enters the premises. Large quantities of hazardous materials are not teleported into self-storage spaces--they arrive in trucks. It does not take an extensive search to determine something potentially dangerous is being brought onto the premises.
  • Make sure prospective customers understand your policies against storing hazardous materials. They should also be aware you will report all incidents to the appropriate government authorities. The goal is prevention. You want to scare off potential toxic dumpers. If you make it difficult for them, they will go elsewhere.

While following these suggestions can have a deterrent effect, some storage operators take even more aggressive measures. One tactic is to photograph all tenants upon the execution of the rental agreement. Many facilities get a thumbprint from all new tenants. Such measures may not only discourage potential toxic dumpers from renting a unit at your facility, but also customers considering renting space for other illegal reasons.

There is no perfect system for preventing a self-storage space from becoming a depository for hazardous materials. However, you can reduce the odds your facility will be chosen by toxic dumpers. Dumping toxic materials in a self-storage facility is a crime and, like most criminals, dumpers want to remain anonymous. If they believe you know who they are and are watching what they are doing, they may look for an easier site to practice their illegal trade.

D. Carlos Kaslow is an attorney in Berkeley, Calif., and is the founding partner of the Self Storage Legal Network and author of the Self Storage Legal Review, a bimonthly newsletter covering self-storage legal issues. He is also general counsel for the national Self Storage Association. For more information, visit www.selfstorage.org.

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