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Self-Storage Operators Are Not Government Watchdogs: The Dangerous Precedents of the Safeguard Lawsuit

The lawsuit between NYC and Safeguard Properties may have been settled, but the conditions of the settlement could spell trouble for self-storage operators.

Amy Campbell

April 25, 2013

3 Min Read
Self-Storage Operators Are Not Government Watchdogs: The Dangerous Precedents of the Safeguard Lawsuit

A guest installment by Mel Holsinger, president of Professional Self Storage Management LLC.

Although Im happy the lawsuit between New York City and Safeguard Properties LLC over stored counterfeit goods was settled last week, the conditions of the settlement are somewhat troubling and could spell trouble for our industry.

Safeguard Properties LLC was sued by NYC after counterfeit merchandise was seized last summer from one of the storage companys facilities. Approximately 44,000 counterfeit trademarked goods and pirated video and audio recordings worth more than $550,000 were being stored and distributed by Safeguard tenants.

The issue that potentially raises great concern from many of us in the self-storage industry is the new tenant-lease requirement, which grants Safeguard access to units without prior notice. This is disturbing at the very least. While most rental agreements have clauses allowing the owner/operator/manager access to a unit in the event of an emergency, it very much opens up the discussion regarding care, custody and control when an operator has full authority to enter a unit any time. It also opens the possibility of many potential lawsuits from what customers may assert as wrongful entry with no way to determine if, in fact, a valid reason was used to enter the rented space.

The fact is when a customer rents a storage space, its his space to use. Of course, if customers store illegal things in their units there should be a way for the operator to report this if in fact it was predetermined or somehow legitimately discovered. However, to just allow a self-storage operator to open and inspect any unit at any time for any reason gives up the right to privacy by our customers.

Are we as operators now supposed to be the governments watch dogs for every customer that rents space? If this is the case, should not an apartment owner be able to open and inspect a tenants living space at any time for any reason? And even further, does this not give our authorities the right to come into our homes and inspect them at any time for any reason? I think not. But if this is part of Safeguards agreement, is it not possible that this could lead to even more invasion of privacy allowances down the road?

I raise this issue out of concern for our industry. In my humble opinion, the N.Y. lawsuit has opened up a can of worms for all of us. Not knowing all the particulars of this case, from what I read Safeguard already had procedures in place aimed to prevent illegal activity. But, once again, the criminals do not obey the laws, the innocent are then punished because of the actions of a few.

I certainly applaud Safeguard for attempting to eliminate criminal activity from its stores, but giving them the right to have access without prior notice goes way beyond their customers right to privacy. We in the storage industry have enough complications in our everyday business life. To saddle us with one more responsibility is simply wrong.

Mel Holsinger is president of Professional Self Storage Management LLC, which oversees the operation of more than 40 facilities in Arizona, Colorado and Texas. Holsinger has been in the self-storage industry for more than 25 years. To reach him, call 520.319.2164; e-mail [email protected]; visit www.proselfstorage.com.

About the Author(s)

Amy Campbell

Editor, Inside Self Storage

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