Security is on everyone’s mind these days, including that of the self-storage operator. Whether it’s a concern for tenant safety or the risk of criminal activity at their facilities, owners are being forced to carefully consider who their tenants are and what rights they have to protect their property and customers.
It was once considered unorthodox for an operator to photograph tenants for identity verification. Now we see facilities fingerprinting tenants and even performing background checks. Why? The first answer is potential liability. Owners may be considered liable if they rent space to individuals who use it to commit crimes, wherein people are injured or property is damaged. The second reason is the improved technology can help owners determine who might constitute a threat to a facility.
Using Tenant Information
Take, for example, the Self Storage Association’s Counter Measures program. This service allows operators to quickly obtain tenant identity verification, credit scoring and even background checks via the Internet. Now even though that information may be available, the more difficult question is how to properly (and legally) use it. Will a tenant be turned away if he has bad credit, even though self-storage rental is only month to month? Will he be turned away if he has a criminal record, even if the crime has nothing to do with property theft? Storage operators need to make informed decisions regarding how to use tenant information properly.
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. It is illegal for a self-storage operator to deny rental based on a prospect’s national origin, race, color, religion, disability, sex or familial status. There are laws that declare people cannot be denied “equal opportunity” because they or their families are from another country, have a name or accent associated with a particular nationality, or are married to or associate with people of a certain origin.
For example, there have been court cases brought against restaurants at which one ethnic group was treated differently than another and hotels where certain visitors were required to pay higher rates and in cash as compared to other guests. Although racial profiling has been used by the police in the context of traffic stops and the search for contraband, it continues to be a hotly debated civil-rights subject.
After the events of Sept.11, Congress passed a law known as the USA Patriot Act, which focused on ways to limit terrorism in the United States. However, the act includes a law addressing concerns about the act of bigotry against Muslim and Sikh-Americans. This law condemns such prejudice and calls upon law enforcement to prosecute related crimes.
When it comes to self-storage, rather than judging tenants based on ethnic or racial criteria, operators can and should have a set of requirements for all prospective tenants. These criteria can include picture IDs, verifiable addresses and Social Security confirmation. They can also include credit and criminal background checks.
Whatever your policies might be, they should be applied consistently to all tenants to avoid discriminatory practices. If you have a required procedure for all prospects and someone fails to meet a requirement for tenancy, that person can be denied use of the facility. Whether to use strict identification or credit/criminal verification methods is an operational decision for each owner. The bottom line is if all tenants are treated the same way, there can be no claim of unfair treatment.
What else can storage operators do to secure their facilities? In the increasingly competitive industry environment, operators have pushed each other to enhance the security devices they use, such as secured fencing, code-access gates, individual unit alarms, video cameras, security lighting and even guard dogs. Each of these measures focuses on keeping unauthorized people from entering a facility and gaining access to units. They have almost become a requirement for protecting tenants’ goods; but they’ve also strengthened a facility’s ability to protect tenants themselves.
As on all commercial property, there is the risk of a tenant being the victim of a crime while he is on a self-storage site. If this occurs, the property owner and facility management can potentially be held liable. Such cases have been filed against hotels and shopping centers, and storage facilities are not immune. The use of external security enhances a facility’s defense against claims. If an offense does occur, an owner can argue that he attempted to protect his tenants by the use of perimeter fencing, security gates, video cameras, etc.
Security devices also protect a facility and its employees from vandalism, robbery or other crimes. A facility can better protect itself and its customers by limiting access to regular business hours. The rental agreement should plainly state that access to the facility can be limited by posted hours as well as emergency situations (such as inclement weather or damage to the facility).
Finally, operators should encourage tenants to protect themselves from theft. For example, stress the use of disc rather than combination locks and suggest they create a list of their property (including any serial numbers) in case their property is stolen.
The Importance of Maintenance
Not only must a facility provide the security it advertises, it must maintain its systems so they are fully operational. Although there are always circumstances in which equipment will falter, once an owner is given notice of or discovers problems, he is duty bound to repair the system.
It is the same responsibility he takes to maintain the property’s structures, walkways, driveways and other areas that require upkeep. An owner who allows a driveway pothole to remain in a state of disrepair assumes the potential liability for an injury arising from that condition. Similarly, if he leaves a hole in his fence or the front gate open, he assumes potential blame for criminal activity.
When it comes to facility and security maintenance, it is crucial to maintain the proper documents and record your preservation and repair efforts. Again, an operator who does not adequately maintain his property assumes a tremendous risk of losses arising from unkempt conditions. On the other hand, a responsible business owner who uses proper record-keeping can defend his position in the event of a claim.
Operators can further protect their facilities through regular facility inspections. You have the right to inspect property being stored at your facility. First, there should be a “use” provision in every rental agreement that limits what can be stored in a storage unit. A standard provision might read:
The space named herein is to be used by the Tenant solely for the purpose of storing any personal property belonging to the Tenant. The Tenant agrees not to store any explosives, or any flammable, odorous, noxious, corrosive, hazardous or pollutant materials or any other goods in the space which would cause danger or nuisance to the space or facility. The Tenant agrees that the property will not be used for any purposes unlawful or contrary to any ordinance, regulation, fire code or health code, and the Tenant agrees not to commit waste, nor to create a nuisance, nor alter or affix signs on the space, and will keep the space in good condition during the term of the Agreement. The Tenant agrees not to store jewels, furs, heirlooms, art works, collectibles or other irreplaceable items having special or emotional value to the Tenant. There shall be NO HABITABLE OCCUPANCY of the space by humans or pets of any kind for any period whatsoever and violation of these prohibitions shall be grounds for immediate TERMINATION of the Agreement.
Under this provision, a facility operator would have the right to ask what property is being stored by the tenant to ensure there will be no violation of the contract. If necessary, he may choose to specifically include in his contract a provision that allows all property and vehicles on the premises to be searched.
This inspection right is separate from a landlord’s right to enter a tenant’s unit if necessary for purposes of repair or emergency or to determine if there is a violation of the contract. Such a provision might read:
In cases where Owner considers it necessary to enter the space for purposes of examining the space for violation of this agreement or condition in the space or making repairs or alterations thereto, or to comply with this agreement, or due to emergency, Tenant agrees that Owner, or Owner’s representative, shall have the right without notice to enter into and upon the space and Owner reserves the right to remove contents to another space.
Search and Seizure
Self-storage facilities are common sites for law-enforcement searches and seizures. In fact, since the recent terrorist attacks, facility searches have become more prevalent as the government seeks evidence to avoid future incidents. Can a facility operator provide the names of his tenants without the need for a subpoena or even a search warrant? To the extent that he owns the proprietary right to his rent roll, he can choose to divulge whether a particular tenant is renting a unit at his facility. With that information, the authorities can better support their request for a subpoena of the tenant’s document file and a search warrant to inspect the property in the unit.
There have been some recent cases that have addressed the issue of plain-view searches and reasonable access. In the case of State v. Bobic, the Washington Supreme Court upheld a search by law enforcement of one storage unit when viewed by the police from an adjacent, empty unit. The court found the police were authorized to look into the locked unit through a hole in the wall. In another case, U.S. v. DeTurbiville, the Ninth Circuit Court of Appeals upheld the right of authorities to enter a locked storage unit where permission was provided not by the tenant, but a friend who had been given the key and code to the unit. The court found the tenant assumed the risk that his friend would allow others to enter the unit, even the police.
As the likelihood of police searches increase, facility operators should consider amending their rental agreements to explain their rights and protections in these matters. For example, the agreement should state that the facility retains the right to provide authorities information concerning all of its tenants. The rental agreement should also state that the facility has the right to enter a unit in which there is believed to be illegal activity. By establishing the operator’s rights in the rental agreement, there is less of a risk of tenant trespass claims. In this day and age, security is of the utmost importance. Self-storage operators should exploit as many avenues as possible to protect themselves, their businesses and their tenants.
Scott Zucker is a partner in the law firm of Weissmann & Zucker P.C. in Atlanta. Mr. Zucker specializes in business litigation, with an emphasis on real estate, landlord-tenant and construction law. He is a frequent speaker at national conventions and the author ofLegal Topics in Self Storage: A Sourcebook for Owners and Managers. He is also a partner in the Self Storage Legal Network, a subscription-based legal service for self-storage owners and managers. For more information, e-mail firstname.lastname@example.org.