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Business Records in Delinquent or Abandoned Self-Storage Units: What to Do When You’re Stuck With the Files

By Scott Zucker Comments
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It’s not uncommon for a self-storage operator to open a delinquent or abandoned unit and discover the tenant has left behind boxes of business files. To properly foreclose on the unit, you must proceed under the state’s applicable self-storage law. Follow this advice to legally and correctly dispose of the records and reclaim your space. We’ll first address the issue of delinquent units, then abandoned units.

Delinquent Units

Dealing with business files found in delinquent storage units is completely different from a scenario in which an individual tenant has stored his own personal files in a storage space. Storage operators have no specific duty to private customers who assume the risk of loss to their own files. Those units are subject to sale and, if not purchased, public disposal. Again, when a tenant puts his own property at risk, the operator has no obligation to treat those unit contents any differently than other personal property.

The significant issue is when the tenant is a business storing records for its customers or a licensed professional (accountant, doctor, insurance agent, lawyer, mortgage broker, etc.) storing client or patient files. These are considered third-party records. It’s in these situations that you must be ready to handle the files differently from those found in a typical delinquent unit.

The concern about third-party records has been addressed via changes to some state self-storage laws over the last few years. For example, in Arizona and Nevada, operators are now required to include a provision in their rental agreements whereby tenants disclose if they’re storing any “protected property,” which is defined as “documents, film or electronic data that contain personal information, such as Social Security numbers, credit or debit card information, bank-account information, passport information, and medical and legal records relating to clients, customers, patients or others in connection with an occupant’s business.”

Pursuant to these state laws, if a tenant indicates that such items are being stored and he later falls into default, the operator must do several things before going to lien sale. First, he must contact the tenant in an effort to return the property. Next, he must reach out to any additional contacts listed in the rental agreement. If he can’t reach those people, the operator can contact “any appropriate state or federal authorities, including, without limitation, any appropriate governmental agency, board or commission listed by the occupant in the rental agreement … ascertaining whether such authorities will accept the protected property and, if such authorities will accept the protected property, ensuring that the protected property is delivered to such authorities.”

Only after those efforts are taken without result is the operator then permitted to destroy the protected property, “in an appropriate manner which is authorized by law and which ensures that any confidential information contained in the protected property is completely obliterated and may not be examined or accessed by the public.”

Abandoned Units

Using these laws as a strong guideline for any third-party records in an abandoned storage unit, operators are encouraged to use the same basic steps listed above. First, do everything possible to locate the tenant or his emergency or alternate contacts to simply return the records. Next, contact state or federal agencies for assistance. Finally, have the documents shredded or otherwise “obliterated” so they don’t fall into the hands of any parties who might wrongfully use the information.

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