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Self-Storage Is Going Contact-Free in Response to COVID-19, But Is It Legal?

Self-Storage Is Going Contact-Free in Response to COVID-19, But Is It Legal?

Many self-storage operators are offering contact-free services during the coronavirus pandemic, leveraging technology to adhere to government guidelines and offer a safe rental experience. The question is whether this approach alters the legal status of the owner/tenant relationship.

The self-storage industry has always been a bit stuck in its ways. For example, it took a while for operators to shift to automated gates and even online payments. But the coronavirus pandemic has driven home the reality that our industry must adjust to changing market needs, making customers and employees feel safe when using our facilities.

Fortunately, there are many vendors that produce technology and other tools to make the storage business more user-friendly and efficient. These offerings have allowed operators to function through one of the most difficult times in history. They’ve enabled facilities to stay open while meeting safety and health protocols imposed by federal and state laws.

In lieu of relying on in-person interaction to rent units, process move-ins and move-outs, take payments, etc., the self-storage industry has mobilized to focus on a contact-free customer experience, using kiosks and Web technology for online reservations and rentals, Bluetooth for remote gate and unit access, and Web-based or mobile payment processing. There’s also a greater reliance on call-center services.

All of this focus on being “contactless” has elevated the tenant experience to be quicker, safer and easier for all parties involved. But does it alter the status of the owner/tenant relationship? Is it legal?

Questions to Ponder

It may seem like a funny question to ask after what we’ve witnessed the past few months at self-storage facilities worldwide, but it’s worth considering whether electronic contracts are enforceable. Here are a few other important questions I’ve heard facility operators ask:

  • Can a contract be entered without photo identification?
  • Does using a Bluetooth locking system change a storage operator’s bailment status?
  • Can credit card payments be made without written authorization?
  • Does the Americans With Disabilities Act require in-person alternatives for contracting?
  • Are kiosks required to accept cash instead of credit cards?

The ultimate question is whether these new contact-free advancements and applications have outpaced the legal rights of the customer or the legal obligations of the landlord. In other words, do these technological adaptations change the legal status of “self” in the self-storage relationship?

Fortunately, the answer is no. During this time of heightened concern over social distancing and person-to-person interaction, our industry innovations have served to demonstrate the unique nature of our industry: That it can essentially be a remotely managed process in which the tenant rents space from a party (the owner) offering available real estate. Never before has the simplicity of the business been so clearly revealed by the use of technology. The rental can occur virtually and the payment made electronically. Access can be delivered remotely and security controlled at a distance.

Make It Clear

Still, to avoid any risk of ambiguity or confusion stemming from newly implemented changes, the smart thing for self-storage operators to do is address these issues within the terms and conditions of their lease. An updated rental agreement should clarify that the use of a Bluetooth lock doesn’t change the owner’s non-bailment status. It should authorize the owner to rely on the credit card information provided by the tenant. It can even grant the owner the right to receive photo ID from the tenant in the future if not obtained at the time of contracting.

Ultimately, and most important, an updated lease should acknowledge that the use of an electronic signature is equivalent to a written signature, and the owner can rely it to bind the customer to the terms and conditions in the rental agreement. Essentially, all of the questions that flow from the operational shift to technology as a result of the coronavirus pandemic can be solved by revising your lease. By adjusting the terms, contactless storage can be the easy solution in the midst of troubling times.

Scott I. Zucker is a founding partner in the Atlanta law firm of Weissmann Zucker Euster Morochnik & Garber P.C. and has been practicing law since 1987. He represents self-storage owners and managers throughout the country on legal matters including property development, facility construction, lease preparation, employment policies and tenant-claims defense. He also provides, on a consulting basis, advice to self-storage companies in the areas of foreclosure and lien sales, premises liability, and loss-control safeguards. To reach him, call 404.364.4626; e-mail scott@wzlegal.com.

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