Legal Considerations for Titled Property in Self-Storage: Understanding Liability and Lien Sales for Boats, RVs and Other Vehicles

By Scott Zucker Comments
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Renting storage space for boats or RVs is a lot different from renting space for the storage of household goods. For one, the value of the property being stored will generally be much higher than the value of the contents of a typical self-storage unit. Additionally, the boat or RV being stored will have a certificate of title connected to it, establishing a person or business as the legal owner. The boat or RV will also likely be registered with the state in which it is operating, so the state can track it. This, of course, is significantly different from personal property commonly stored at self-storage facilities.

Based on these issues, self-storage operators who chose to store boats and RVs must do so with special consideration to some of the legal issues relating to these unique circumstances.  

Value Concerns

The best way to address the potential high value of the boats and RVs being stored is to impose upon the tenant the obligation of having insurance for the property in case of loss or damage. The requirement of insurance is more significant when dealing with high-value items and, as such, it’s appropriate and legal for self-storage operators to require proof of insurance as a condition of storage.

The insurance issue needs to be addressed in the rental agreement or in the boat/RV addendum. A typical provision might read:

Occupant’s Insurance. The Owner does not provide any type of insurance which would protect the occupant’s personal property from loss by fire, theft, or any other type of casualty loss. It is the Occupant’s responsibility to obtain such insurance. The Occupant, at the Occupant's expense, shall secure his own insurance to protect himself and his property against all perils of whatever nature for the actual cash value of the stored property. Insurance on the Occupant's property is a material condition of this agreement.

Occupant shall make no claim whatsoever against the Owner’s insurance in the event of any loss. The Occupant agrees not to subrogate against the Owner in the event of loss or damage of any kind or from any cause. Occupant shall provide to Owner prior to occupying the space copies of all documents available to demonstrate proof of insurance (commonly a Certificate of Insurance) for the motor vehicle or boat. To the extent Occupant does not maintain such insurance as required, Occupant shall bear all risk of loss or damage.

Additionally, because of the potential high value of boats and RVs, a facility operator must consider the use of a limitation-of-value provision in the lease or addendum. The value limitation doesn’t address any limits on liability, but instead provides a limit as verified by the tenant of the value of the contents stored. Commonly, that limit may be $5,000. The limit may be higher with the storage of boats and RVs, and may be increased pending the tenant’s proof of insurance for a higher value.

However, since some losses could be found to be the ultimate responsibility of the self-storage facility (notwithstanding contractual protections against such liability), the facility should have customer’s good legal liability insurance coverage that matches or exceeds the revised limit of value. A value limitation provision might read as follows:

Limitation of Value . The Occupant agrees that in no event shall the total value of all property stored be deemed to exceed $5,000 unless the Owner has given permission in writing for the occupant to store property exceeding such value.

The waiver of that limit to a higher amount must contain a protection for the facility owner if the insurance provided by the tenant lapses. The language should read:

Lapse of Insurance. If Tenant allows the insurance policy to lapse by failing to pay the required premiums, then Tenant shall be considered self-insured, whether or not Owner has been informed of such lapse. If Tenant allows the insurance policy to lapse by failing to pay the required premiums, then the limitation of value provision contained in the self-storage agreement shall be reinstated and Owner’s present waiver shall be deemed null and void.

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