Do you rent storage spaces by the square foot? It may surprise self-storage operators to learn the answer to this question is actually “no”— at least it should be.
This does not mean larger spaces should rent for equal or less money than smaller ones. It’s just that rent for self-storage space, unlike that for most commercial space, is not tied to a formula that makes the actual number of square feet critically important to calculating the monthly rent. We raise this issue because there are legal implications to how the size of a storage space is advertised.
A typical self-storage facility has between 400 and 600 spaces. Units may range in size from 5-by-5 feet to 20-by-40 feet. An effective way to communicate the varying sizes available to customers is by advertising the space dimensions. However, this is just a shorthand way of describing a space that may fit a customer’s particular needs. Ultimately, tenants rent a unit they believe can hold all of their property. It does not really matter to the customer or storage operator that the space is actually 10-by-10 or 9-by-11.5 feet if it will hold the customer’s property and the price is right.
So what’s the legal problem? Spaces are frequently advertised and rented as if the size were exact. Rental agreements frequently have a line for unit size that is filled in with the space dimensions at the time of rental. While the size of the space is listed as exact in the advertising materials and on the rental agreement, actual measurements are seldom so certain. Variations of six or more inches in width and depth are not uncommon. These variations can lead to lawsuits instigated by entrepreneurial lawyers.
For example, Shurgard is involved in a class-action lawsuit relating to this issue (Gary Drake v. Shurgard Storage Centers Inc. et al., Case No. 02CC00152). According to Shurgard’s annual report, the complaint alleges the company misrepresented the size of its storage units. The plaintiff seeks classaction status, as well as damages, injunctive relief and declaratory relief against the company. The suit claims Shurgard violated California law relating to consumer protection, unfair competition, fraud and deceit, and negligent misrepresentation. Shurgard denies these allegations and believes it will ultimately prevail at trial. However, if the judge grants the plaintiff class-action status, the suit will be a cause for concern.
The Shurgard suit does raise an interesting legal question: Is a self-storage tenant who rents a 10-by-10 unit entitled to a space of exactly that size and not a few inches less in width and depth? The discrepancy may make no difference in terms of the volume of property that can be stored. However, it can be argued a space that is actually 95 square feet should rent for $95 per month, not the $100 dollars actually charged for the advertised 100 square feet. A $5 per month difference per space doesn’t seem like much, but it quickly adds up to significant damages for a facility with 600 units. What is interesting about self-storage units is space height is as important in determining volume as width and depth, but few storage operators ever advertise this dimension.
To avoid this problem, self-storage operators may want to give some thought to how they advertise their storage spaces and how units are described in the rental agreement. First, they need to know the actual size of their units. If all spaces are the advertised size or larger, there is no problem. If there are variations in measurement, a few modifications in advertising and the rental agreement can help you avoid disputes.
- Make it clear in your advertising that space sizes are approximate and for purposes of comparison only.
- Do not state the size of the space in the rental agreement. The customer is renting a space that fits his storage needs, and the size is not necessary to the transaction. The only description necessary is the space designation, such as its number. If you cannot resist putting dimension information, state “approximate size.”
- Consider a provision in the facility rules and regulations that states, “SPACE SIZE: Advertised space sizes are approximate and for comparison purposes only. Spaces may be smaller or larger than advertised. Spaces are not rented by the square foot, and rent is not based on square-foot measurements.”
The problem faced by Shurgard in the Drake suit is rare. In the past 20 years, only a few customers and government entities have ever raised the issue of space-size advertising or rental-agreement representation. However, it may be wise to take some measures to diffuse the problem before it arises.
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.