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Modernizing the Self-Storage Rental Agreement: A Facility Operator's Guide to Executing Small and Large Changes (and Ensuring They Are Enforceable)

By Jeffrey Greenberger Comments

Given that so many state self-storage statutes have been modified over the last two years, many facility operators have questions about how they can effectively make changes to their rental agreement and make those modifications enforceable. Before revamping your self-storage agreement or adding an addendum, read through these guidelines to ensure you build a solid document and get tenants on board.

When it comes to changing your rental agreement, the first distinction you need to make is whether you’re making large, substantial changes or small, administrative-type changes. Larger changes are those that would change the relationship between you and your tenants. These can include adding or changing value limitations, adding a negligence waiver, or changing your level of liability vis-à-vis your tenant.

Smaller changes, however, don’t necessarily change the relationship between you and your tenants. Rather, they're make administrative or ministerial. The most common example is raising rent. Adding new ways to pay rent (kiosks or online, for example), altering a clause on the disposal of garbage or smoking, or changing a fee probably do not create substantial changes to the operator/tenant relationship. If made without larger changes, these would be handled differently.

Executing Large Changes

Once you've made changes to your rental agreement, how do you implement them with your existing tenant base? Unless there’s something illegal about your existing agreement, something that requires you to update all tenants as quickly as possible, just use your new agreement with all new tenants for several months and allow attrition to do its work.

If you plan to make substantial changes to the nature of your relationship with existing tenants, however, it’s always best to get a new rental agreement signed in person. Sometimes you can just add an addendum to the rental agreement; but at the end of the day, a “wet ink” signature from your tenant, preferably done in your presence, is often necessary.

When it’s time to roll out the new agreement to existing tenants, asking them to sign in person helps to prove they knew about and acknowledged the changes. If you simply mail out the new agreement and ask tenants to sign and return, you take a risk. To encourage participation, consider holding a contest or drawing or offering some sort of incentive, such as a promise not to raise rates for a period of time or to waive one late fee.

For tenants who live far away, you may need to add a notary provision and obtain the tenant’s notarized signature. You may also be able to collect digital signatures online. If you do this, be careful to ensure you can prove it was your tenant’s digital signature. You can do this by requiring a password.

For the few tenants who will not communicate or cannot be found, remember that, for the most part, your rental agreement contains month-to-month terms. At some point, you’ll have to make the tough decision whether to allow these customers to stay on the old rental agreement—which is probably untenable given that you’ve gone to the trouble and expense of creating a new one—or asking them to leave. Once you ask people to leave, their inertia generally subsides and they begrudgingly come in and sign.

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