A Self-Storage Operator's Guide to Negotiating Third-Party Service Contracts

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By Molly Bilker

When he first started operating a self-storage business, Robert Clark of Oregon-based South Eugene Storage hired an outside contractor to handle the facility landscaping. The landscaper was the self-storage owner's friend, so Clark thought he’d get a great deal. When the bill came in at $1,100, he knew he'd made a mistake. "It turned out, not that good of a friend," says Clark, who's also a member of the Self-Storage Talk online community.

Clark admits he wasn't sure how to negotiate a contract and failed to get all the information he needed to get the best value. Now he swears he’ll never let that happen again.

Negotiating with a third-party service provider can be a challenging process. While every self-storage operator wants to receive quality service at a fair price, it doesn't always occur. Contract negotiations are about finding a happy, harmonious niche where both parties agree. To make this happen, operators should be prepared and have clear goals in mind.

Know Your Stuff: Contract Types and Terms

There are a variety of service contracts storage operators might consider including pest control, gate repair, office renovation, security monitoring, and telephone and Internet services. Elevator service, search engine marketing, Web design and cable are a few other types they may negotiate, says David Dixon, chief operating officer of Georgia-based Universal Storage Group, which owns seven facilities and manages 44 across the Southeast. "There are a lot of product and service contracts to be dealt with. They vary by time, scope of work, and products/services offered," he says.

Operators need to familiarize themselves with the terms often found in contracts. Some can be filled with unfamiliar words and phrases, which can easily throw a person who's inexperienced with legalese. Don't let yourself get caught in some of the traps that come with the language, says Scott Zucker, founder and partner of law firm Weissman, Zucker, Euster, Morochnik P.C., which advises self-storage operators on legal concerns.

Contracts should contain three elements: the specific product or scope of the work, the price, and the time of delivery, Zucker says. "These are the main points of a contract. Do not sign a contract that is missing important terms or is ambiguous.”

The contract should also include precise terms so no one misunderstands it, says Jamey Fawcett, president of Accent Building Restoration (ABR), a self-storage maintenance company based in Salem, Ore. "Many problems arise out of general terms that don't call out the specific terms and services being provided," he says. "I have found the more specific you are, the fewer problems you have, as each side is able to easily understand what is included in the terms and services of the project."

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