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Judge Approves $5M Class-Action Settlement Against Self-Storage REIT Extra Space

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U.S. Magistrate Judge Cathy L. Waldor of the District of New Jersey has approved a $5.08 million settlement in a class-action lawsuit against Extra Space Storage Inc., a self-storage real estate investment trust (REIT) and third-party management company. The 2013 case was filed by tenant Steven Gomes who alleged the REIT sold the items he had stored in an Extra Space storage unit before the deadline he received from the company for paying his delinquent rent. The class-action suit involves nearly 155,000 Extra Space customers, according to the source.

Gomes failed to make the monthly payment on his storage unit in December 2011 and January 2012. The delinquency letter he received from Extra Space indicated his items would be auctioned if he didn’t settle his balance or retrieve his belongings by March 15, 2012, according to the source. Gomes later learned the contents of his unit were sold at auction on Feb. 16, 2012. He estimated the property value at $8,700.

The class-action suit was filed about a year later, alleging violations to the state’s Self-Storage Facility Act (SSFA) as well as the New Jersey Consumer Fraud Act and the Truth-in-Consumer Contract, Warranty and Notice Act. A mediation attempt in 2014 was unsuccessful, but an initial settlement agreement was reached last year, according to the source.

Under the July 13 agreement, Extra Space will place the settlement amount into a common fund. Gomes will receive an incentive award of $22,500 and $725,000 in legal fees. All class members are eligible to receive a $75 certificate they can use in New Jersey toward Extra space products and services. They’ll also receive $25 for administration expenses. A subclass containing 7,700 members can pursue separate action to recover the sale of property if it violated the SSFA, the source reported.

"We think that it was a very fair and reasonable settlement for the class in this case," said lead attorney Andrew R. Wolf of The Wolf Law Firm LLC, which represented the plaintiffs in the case. Extra Space was represented by attorney Daniel Brown of Sheppard Mullin Richter & Hampton.

Headquartered in Salt Lake City, Extra Space owns or operates 1,441 self-storage properties in 38 states; Washington, D.C.; and Puerto Rico. The company’s properties comprise approximately 980,000 units and 109 million square feet of rentable space.

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