One of the most important aspects of your self-storage operation is the rental agreement. It not only binds the customer to certain stipulations—rent, late fees, move-out, trash, etc.—but can protect your business in case of a lawsuit. When was the last time you reviewed your rental agreement? Also, do you understand what all the terms in the document mean?
 
The rental agreement forms the landlord-tenant basis of your relationship with every customer storing at your facility. It eliminates the creation of a bailment, and establishes all the rights and remedies between the parties. In essence, it’s central to every aspect of your business.

When was the last time you reviewed your rental agreement? Maybe you read it thoroughly when it was initially drafted by your lawyer. That may, however, have been many years ago. Perhaps you also periodically review it to ensure you haven’t overlooked any important changes to the business laws in your state (including your state’s lien law) or updates to modern business practices. Some operators may have never read through their rental agreement at all, placing complete faith in their attorney to cover what’s required.

Self-storage operators are not lawyers, and rental agreements are chock full of unfamiliar and often archaic technical language, or “legalese.” Many rental agreements contain long, convoluted paragraphs designed to cover every eventuality under the sun. If an operator cannot be expected to understand all the legal implications of a rental agreement, can you have any hope employees and tenants do?

And there lies the rub, because employees and customers are the people who work with rental agreements on a daily basis. Therefore, it’s important the documents they use be written in a way they can all understand. 

Of course, many operators take the position that the lease is the lease, and if the tenant doesn’t sign it and agree to abide by it, then he doesn’t get a unit. It’s sort of like buying a new house or car―if you want the money, you’ll sign all the loan forms without exception. Why bother trying to understand the terms?

Consider how many homeowners who’ve recently lost homes to foreclosure because they didn’t fully understand all the implications of the documents they signed. Under that theory, understanding the rental agreement is secondary. This is all well and good until a dispute rises between the operator and the tenant. And, unfortunately, it might!
 
Protecting Your Business

Consider this example: Let’s say a tenant returns to your facility after an extended absence and is behind on his rent. While his stored property hasn’t yet been auctioned, you’ve denied him access to his unit either by overlock or at the entry gate.

Although this possibility is mentioned in the rental agreement, it’s buried in a seven-line, eight-point-type, single-space paragraph titled “default” on page three. Maybe the tenant actually attempted to read and understand the agreement when it was signed ... until his eyes glazed over, and the manager was not able to explain all the terms in the first 10 overstuffed paragraphs, let alone the one in question.

So the tenant confronts the manager and angrily asks for an explanation. The manager tries to explain. The tenant is inconvenienced. Embarrassed. Voices are raised. Hopefully, the tenant pays what’s due and things move on. Perhaps not. Maybe the tenant remains angry and moves out soon thereafter. In either case, damage has been done. At best, the relationship has been harmed; at worst, it’s been lost.

On the other hand, suppose the rental agreement contained the following stand-alone sentence: “If you do not pay your rent on time, we may deny you access to your unit by putting our lock on it.” Clear, much easier to read and not hidden in gobs of verbiage. The same protection for you, but at least now the tenant understands where he stands before a dispute arises. Less anger, less chance of losing a customer.
 
Using Plain Language

One of the ways to lessen or eliminate these problems is to rewrite your rental agreement in what is known as plain language.The use of plain language documents is a nationwide movement that began in the 1970s and is now widely used by governments and businesses throughout the world. Many documents the U.S. government uses have been written in plain language.

Some states require that consumer contracts be written in plain language. For example, Pennsylvania mandates that contracts made for the “lease of real property” be written this way. California, Connecticut and New York have plain-language statutes. There’s clearly a trend toward easier-to-understand legal documents.

Plain language doesn’t require an operator to “dumb down” the rental agreement. Rather, you use it to clearly, confidently and effectively communicate the terms of the agreement to the people who matter most: your employees and customers. If everyone understands what they’re signing, there are fewer questions about the nature of the relationship they’re entering.

In some instances, storage operators will create a separate plain-language guide to help their employees and customers better understand the terms of the rental agreement. But wouldn’t it be simpler to revise the rental agreement itself rather than develop an ancillary document to explain it?

More important, it’s relatively simple to rewrite your rental agreement in plain language without sacrificing its legal value.You don’t have to load up the agreement with technical language to make it valid. In fact, using a minimum of legalese will make the contract more valuable because it will be more understandable to all.

How do you convert a rental agreement to one that’s more understandable using plain language?  Here are a few tips to make it easier to read and understand:

Keep Some Legalese

Of course, it’s essential that some legal language remain in your rental agreement. A good example is the term “lien.” A self-storage lien is a legal interest storage operators have in the property stored by their customers to insure rental payments. This lien is a creation of state law and available in almost every state.  Because of its singular importance to the effective operation of your business, and because it’s not something a customer will routinely be affected by, it’s a good idea to include the term in your lease and explain in simple terms what it means.

Other legal terms such as “indemnity,” “hold harmless” and “default” are vital as well. What’s important to remember, however, is that if you do include these and other legal terms, you should define what they mean in a manner that’s well-understood.

When properly done, revising your rental agreement through the use of plain language can provide many benefits. For example, an agreement that’s easy to understand requires less time to explain at the outset. First, it’s likely your employees will spend less valuable time following up with customers after mistakes are made and recurring questions arise. This frees them to work on more important tasks. Many self-storage operators pride themselves on top-notch customer service. Providing an easy to understand rental agreement clearly fits into this trend.

In addition to making it easier for customers to understand their relationship with your business, it might have an environmental effect was well. Shorter, more concise rental agreements take less paper. Saving trees and happy customers, that’s what plain language is all about.
 
Bernard Fensterwald III is a consulting attorney with 25-plus years of experience. He’s licensed to practice law in Maryland, Virginia and Washington, D.C. He’s also a principal in U-Store Management, a Washington, D.C.-based self-storage company, and a past president of the Washington Area Self Storage Association. To reach him, e-mail [email protected]; visit www.fensterwald.weebly.com. 

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