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Avoid Legal Exposure in 2008

Jeffrey Greenberger Comments
Continued from page 2
A partial payment with a full settlement release from the occupant, in every instance, is better than proceeding to a sale. You get your space back for a paying occupant, and the current tenant loses any real claim against you because he still owns his property and signed a release to you. If you don’t have one already, have your attorney prepare a standard settlement release for a partial payment with move-out; keep it ready to be used anytime you make a deal.

Another choice is to evict a tenant, but this is not applicable in every state. Check with your state law or consult an attorney.

Finally, as always, don’t forget a mediation requirement. Facing an occupant in a non-adversarial manner (not in a binding arbitration, where everything depends on how one hearing goes) often eases tensions and leads to resolution. Sometimes settlements are not desirable; but mediation at least gives you an opportunity to size up your occupant and his claim and understand how your occupant feels before you find yourself in an arbitration hearing or court.

2. Military Status

If you haven’t asked a tenant if he’s involved with the military and, if so, how to reach him, including a commanding officer’s name and phone number, you’re setting yourself up for a Soldiers and Sailors Civil Relief Act (SSCRA) violation claim if you sell property while the renter is overseas in active duty. This happened to soldier Patrick Roegalin in 2007 at a St. Louis Public Storage location. Roegalin set up self-storage payments via auto debit from a checking account, but somehow, account information got corrupted and the auto withdrawals stopped. Roegalin returned from duty to find Public Storage had sold his stuff.

Whether Public Storage was right or wrong to sell the property is of little concern if one weighs it against the press and public-relations nightmare imposed on the business. The story was picked up by USA Today, other news sources and several morning national news shows. Average citizens were outraged, legislators got involved, and people even offered to pay the legal bills to sue Public Storage.

You don’t want to be in that situation. Make sure you understand your responsibilities under the SSCRA and, moreover, verify if tenants are in military service. Knowing your obligations of serving military personnel avoids legal wars on the home front.

3. Climate Control

Do you use the term, “climate control”? If so, how do you control the climate? You may control temperature and humidity, but you don’t control earth, wind and fire. Rethink your self-storage terminology for 2008. For example, if you provide heating or cooling, consider the term “temperature controlled.” If you control humidity, think about saying it’s “temperature- and humidity-controlled storage.”

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