If you’ve ever shopped for lumber, you know the industry’s idea of measurement is a bit peculiar. What we know as a common 2-by-4 is really 1.5 inches by 3.5 inches. This is because the wood starts out 2 inches by 4 inches and then gets milled and planed to give it a finished look. This process whittles it down in size. As such, the lumber folks use “nominal size” and “actual size” when referring to wood dimensions, and consumers and retailers live in relative harmony.
In the self-storage industry, most 10-by-10 units aren’t exactly 10 feet by 10 feet either. Unit size can vary for a number of reasons based on building design, slab, wall and door configurations, but there isn’t a set standard for finished size, so every unit may be a few inches off here and there.
This generally isn’t a big deal, but it could have the potential to cause headaches if operators aren’t forthright with tenants. What is an acceptable approximation? Two inches off? Ten inches off? How about two feet?
In a recent Self-Storage Talk (SST) forum thread on approximate unit sizes, a manager posted about a facility in which a unit quoted as 20 feet by 8 feet was really an 18-by-8 space. The tenant who rented the unit was angry about the missing two feet. While most owners and managers involved in the discussion have indicated their rental agreements include a clause about the approximation of sizes, most agreed a two-foot difference was too much.
“We have a statement on our addendum that reads: ‘All unit sizes are approximate and for comparison use only. They are not guaranteed to be exact measurements.’ But here we're talking inches. I think advertising an 18x8 as 20x8 is overreaching the approximate size thing. I mean that's 16 square feet she thought she was getting,” wrote senior member Kirkus. “Just my opinion, but I think several inches is OK. Several feet? Not so much.”
A few SST members said an acceptable variance in size could be up to six inches. Anything more than that may need to be advertised and/or priced differently than other similarly sized units. “I would agree with a lot of people here. My rule of thumb [is] a 6-inch rule. If it's over 6 inches, it gets rounded up. Under and it's down,” wrote senior member Advantage IT. “Since 97 percent of my units are indeed over 6 inches from approximate size [they are] rounded up. I do have a few units due to the fire walls that are rounded down, giving me some odd sizes. As our managing partner said, ‘Can you still rent them?’ Yes I can, and they rent just as well.”
Self-storage attorney Jeffrey Greenberger has long been a loud voice of caution about self-storage terminology that can get operators into legal trouble. For example, the idea of climate control can be a murky one. Are units heated and cooled, or temperature- and humidity-controlled? Other problem areas relate to how operators market their security features, advertise free use of a rental truck or even use the word “professional” to describe their services. Some people will look for any opening to complain or, worse, sue.
If you don’t think unit size is legal fodder, consider that a longtime tenant recently sued an operator because her unit was larger than what she was originally told. “Her unit size was written to be about 300 square feet (not my property, so I don't remember exactly) and was priced according to that,” wrote SST moderator MamaDuke. “She actually had about 450 square feet, so [she] got about 150 [square feet] free every month for about 10 years. But she was irate when she measured at move-out and found it to be different than the contract. Yes, she really did take us to court over it!”
The tenant lost, but who wants to be tied up in litigation over frivolous nonsense?
The sizing issue isn’t just a U.S. discussion. In July, a self-storage employee in Hong Kong was arrested for allegedly violating the city's Trade Descriptions Ordinance, which prohibits businesses from presenting false or misleading statements to customers about products and services. She's accused of exaggerating the size of the units at her facility. An undercover agent reportedly said the unit was 20 percent smaller than advertised. Violating the ordinance carries a maximum penalty of five years in prison and a HK$500,000 fine.
In the United States, penalties for false advertising aren’t nearly as strict, although “intent to defraud or mislead” is a misdemeanor that can carry a maximum penalty of six months imprisonment and a fine up to $5,000, according to the Cornell University Law School. Repeat convictions carry up to double the penalty for a first offense.
If you think about it, the way the industry markets unit size is a bit of a misnomer to begin with since tenants are really renting cubic feet, not just floor space. But it’s generally easier for most folks to comprehend 100 square feet vs. 1,000 cubic feet. Still, this is why it’s a good idea to have showroom units customers can see to gauge size (if you have room), as well as for managers to show prospects the exact unit they’ll be renting.
We’re not likely to see a rash of lawsuits based on incorrect self-storage unit size, but knowing how much discrepancy there is between the size of the units you advertise and those you rent is important to help manage risk. If you’re not sure of the actual size of the units you’re renting, I’d recommend figuring that out in case you have a two-foot surprise waiting for a tenant to discover. Discuss with your attorney how much leeway there should be between the sizes quoted and the actual size of a unit rented and make sure your rental agreements protect your business accordingly.