One of a self-storage manager's worst fears is entering his facility one morning to face an angry tenant waiting at the front desk. The tenant is extremely upset because some electronic equipment he had stored in his unit has disappeared, and he wants to know what happened to it. When you check the scene, you find no broken lock or kicked-in door to indicate there was a break-in. What could have happened to his equipment? You know it didn't get up and walk away, but there is no physical evidence proving there was a crime.

THIS SCENARIO, AND ONES SIMILAR TO IT, CAN OCCUR AT ANY STORAGE FACILITY, no matter how well managed or secure. If you are a storage owner who retains copies of your tenants' keys, this type of incident can seriously impact your liability. As a self-storage owner, you do not take bailment of your tenants' property; therefore, goods are stored at tenants' own risk--as long as you are not negligent. When you maintain keys for the units, however, you change that situation, since you can enter a unit at any time. In this situation, you assume liability for the goods stored.

Burglary, robbery and theft are very common and can be committed by strangers, tenants and acquaintances in the area--even your own employees. There are legal differences among these three criminal terms, and it is important to know what they are.

Robbery occurs when an intruder accosts a victim for the intent of stealing from him. The assailant may be armed and usually targets a victim when he is least expecting it. A tenant may be robbed when he is accessing his unit and not paying attention to his surroundings. For this reason, it is good to have security cameras for surveillance.

Burglary happens when items are stolen because of a break-in; unlike robbery, there is no confrontation between the victim and the perpetrator. Burglaries are usually discovered because of physical evidence left behind. A manager may come in to work one morning to find a few storage units opened or damaged and their contents missing.

Should a burglary or robbery occur, the tenant is responsible for insurance to cover the loss or damage. Hopefully, he has a tenant-insurance policy. Some tenants may try to hold the owner liable for their stolen goods and pursue litigation.

Theft, also known as mysterious disappearance, happens when items are taken without evidence of forcible entry and no victims were confronted by the perpetrators. The scenario at the beginning of this article is a perfect example of theft because there was no broken lock or damaged door, and items from the unit were taken without the tenant's knowledge or consent.

When someone is robbed and there is no evidence of forcible entry, it would be natural to assume the person who stole the items had a key to the unit. There are an unlimited number of ways someone with the intent to steal can get a copy of a key. It's as easy as a tenant losing her purse--with a key and information about her unit--and a stranger with bad intentions finding it. A friend or acquaintance might steal the key from her home or office, eventually helping himself to items in the unit. Copies of keys could be stolen from the management office during a burglary, putting tenant units at risk. The worst-case scenario would be a disgruntled employee who steals the keys, makes copies, returns them to the office and later robs tenants after he quits working for you.

Why would a manager keep copies of tenants' keys? Some owners ask managers to inspect for hazardous materials or other criminal activity; copies of keys are kept so managers can make their rounds whenever necessary. This is not a safe business practice. If you are concerned about criminal activity, alert the police and have them handle the problem. Another reason would be in case a tenant loses his key. However, if a tenant loses his key, it is his responsibility to call a locksmith. Some facilities keep keys to accept packages and deliveries on tenants' behalf.

If you are about to renew your insurance policy and your insurance company finds out you retain keys, don't be surprised if it requires you to sign a form stating you no longer retain keys before it will renew your coverage.

It is understandable that a manager may have reasons to retain keys; but when it comes down to the risks associated with this practice, the odds against you are too great. Find alternative ways to inspect your units and assist your tenants with lost keys.

Universal Insurance Facilities Ltd. offers a comprehensive package of coverages specifically designed to meet the needs of the self-storage industry. For more information, or to get a quick, no-obligation quote, write P.O. Box 40079, Phoenix, AZ 85067-0079; call 800.844.2101; fax 480.970.6240; e-mail [email protected]; visit www.vpico.com/universal.