Sometimes you’re left with property from an abandoned unit, or goods that were not sold at auction because they were inappropriate to include in the sale, such as photos and business records. In these cases, you should not dispose of the underlying paperwork sooner then you dispose of the property you’re still holding.
Ultimately Determining a Limit
In the end, you should keep former-tenant records for at least the length of time you may need them for your own internal or tax-audit purposes, or approximately eight years after a move-out, abandonment or sale. Consider this the minimum. The maximum would be the longest of all the scenarios addressed above, usually the statute of limitations for breach of written contract in your state.
With that time span in mind, discuss with your attorney if there is an advantage in disposing of records sooner than the maximum hold date or the statute of limitations date.
There’s a defense to certain lawsuits called “Laches,” which is similar to a statute of limitations. It essentially says that you’re unable to defend yourself because of a change in conditions. For example, someone waited so long to make their claim against you that you no longer have adequate information or records to defend yourself. This is not a perfect defense and should not be relied on, but do address it with your attorney.
Many attorneys will advise clients to dispose of records before the end of the written breach-of-contract period because it’s unlikely a claim will be raised more than seven or eight years after a move-out. In a worst-case scenario, you should dispose of records after the last of the appropriate statute of limitations run outs, regardless of how long that is.
Consult with your attorney to ensure your records-disposal plan complies with the laws of your state, and then set up a system so you comply with your policy consistently. Finally, avoid further trouble by properly disposing of documents when you’re done with them.
This column is for the purpose of providing general legal insight into the self-storage field and should not be substituted for the advice of your own attorney.
Jeffrey J. Greenberger is a partner with the law firm of Katz, Greenberger & Norton LLP in Cincinnati, and is licensed to practice in Kentucky and Ohio. Mr. Greenberger primarily represents the owners and operators of commercial real estate, including self-storage owners and operators. To reach him, call 513.721.5151; visit www.selfstoragelegal.com.