Self-Storage Legal Threat of 2014: Lack of Clarity in Facility Advertising and Rental Agreements

By Jeffrey Greenberger Comments
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This is the time of year when I'm generally asked to write an article on my perspectives for the upcoming months, to reveal the top self-storage legal threats on the horizon, if you will. This year I want to tell you about an alarming trend I've been seeing relating to the lack of accuracy and clarity in facility messaging and rental agreements. Let me give you an example.

I've recently seen an enormous number of claims against self-storage facilities for damage to customers' property, specifically in non-temperature-controlled units. (Many of you refer to these units as "climate-controlled." Please stop!) These claims are for damage to electronics and paper-based items arising from fluctuations in temperature or humidity. The tenant alleges the damage would not have occurred had the unit been temperature-controlled, and he believed the unit he rented to have this feature.

The facts of these claims often show:

  • The facility operator gave the tenant rent quotes for both types of units, and the occupant opted for the lower-priced, non-temperature-controlled option.
  • The unit was about 100 degrees when it was shown to him.
  • There was no equipment for controlling temperature inside the unit.

Regardless, the tenant says something along the lines of, "The website, Yellow Pages ad, etc., advertises temperature/climate control. It does not say that only part of the facility is temperature-controlled. I thought every unit was a temperature-controlled unit. I put things in the unit that I thought would be safe because of temperature control. Now they are ruined, and I want money." This goes back to the concept of reliance. The tenant relied on the existence of temperature control because the signage, etc., indicated the facility offered this feature.

Clarity in the Rental Agreement

How these claims will be resolved is subject to speculation, but the moral of the story relates to the clarity of your rental documents. Many self-storage operators spend a lot of time, energy and money marketing the benefits of their facilities. I have absolutely no problem with this. But when it comes down to brass tacks—namely, the rental agreement—you need to make sure that if the tenant is not receiving some of the features available at the facility, you clearly define this in the contract.

Fixing this might be as easy as including a check box in the rental agreement indicating the unit is or is not temperature-controlled—a yes/no sort of thing, just to be safe. While the allegations made by tenants seem ridiculous on their face, some of their claims are gaining traction and may result in insurance payouts or settlement. Though I haven't yet seen a lawsuit that has resulted in a judgment on these cases, one is probably not too far behind.

Beyond the simple yes/no questions, consider a rental-agreement provision that explains what you mean by temperature or climate control, that not all units offer the feature and, most important, what exactly you provide when the unit is climate- or temperature-controlled. Your rental agreement needs to define the term. Do you provide heat, air conditioning, swamp cooling or ventilation fans? Is it a combination of these? Do you maintain a specific range of temperature? Do you guarantee a range of humidity, or are you just trying to control humidity through air conditioning and heating?

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