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The 3 Prickly Ds of Self-Storage Operation: Tenant Divorce, Death and DisappearanceThe 3 Prickly Ds of Self-Storage Operation: Tenant Divorce, Death and Disappearance
There are three tenant-related situations that a self-storage operator might face at some point, and all can carry legal risk. These are divorce, death and disappearance. Learn about your obligations and the safest course of action in these scenarios, so you can protect your customers’ rights and your business.
6 Min Read
A self-storage operation can present all kinds of interesting challenges to those who run it. Many stem from basic human nature. With tenants come the expected consumer-related problems. For example, many managers have encountered the “three Ds”: divorce, death and disappearance. Each has its own legal risks. Let’s explore each scenario and how you should respond to protect your business and your customers’ rights.
Self-Storage Tenant Divorce
Self-storage seems to be where property coming out of a divorce situation often ends up. The question is, if one spouse rents a space to store stuff from the marriage, what right (if any) does the other person have to access it?
Typically, a self-storage operator isn’t concerned with who’s entering the unit so long as the rent is paid on time and the party has the proper access codes, cards or keys. But divorce often places managers in the middle when a tenant disputes the right of their spouse to enter the space. In such cases, it’s best to defer judgment to the courts.
When two people are divorcing, they automatically subject themselves to the jurisdiction of the court to handle the dissolution of the marriage and the separation of their assets. This may include property kept at a self-storage facility. As the business operator, you must follow all instructions issued by a court concerning the turnover of items from one spouse to another. However, not all orders are written clearly, and it isn’t your job to interpret court decisions.
For example, let’s say the court order states that one spouse must turn over personal property from the storage unit to the other; however, it doesn’t specify how the process is to be handled. You shouldn’t cut the door lock simply because the order says the claiming spouse is entitled to the goods inside.
Most court orders are directed at the self-storage tenant, not the business operator. If your customer doesn’t comply, their spouse may be forced to go back to court for resolution. That’s their problem, not yours. There can be significant liability to you if you favor one party over another, even if that person is paying the rent.
Self-Storage Tenant Death
Unfortunately, it isn’t uncommon for a self-storage operator to learn that one of their tenants has died. Often this comes to light when the rent hasn’t been paid and late or lien notices are sent to the tenant’s last known address. Relatives and friends may come forward seeking to access the unit and retrieve the deceased’s property. There are a couple of different scenarios that can occur under these circumstances. The good news is you have options for helping relatives and friends retrieve their loved one’s belongings.
Unless otherwise notified of a court order addressing rights to the deceased’s property, if a family member has the facility access code and key to the unit (meaning they require no assistance from you to enter the space), they can enter and, if warranted, move out. Again, this access is only permitted when you don’t need to be involved in providing gate-code access or cutting the lock.
If the family member doesn’t have the items they need to access the storage unit, they must provide you with a copy of the death certificate and a court order stating that they’ve been appointed as the administrator or executor of the estate. At that point, they can access the unit and decide if they wish to continue renting it in the name of the estate or terminate the agreement and remove the items.
If the deceased tenant had a small estate (no court probate involved), the family may be able to obtain and prepare an affidavit, which is a sworn document that provides, under oath, that there are no competing claims being made by others concerning the property and the signing party indemnifies the self-storage operator should a competing claim arise. Some states that use this affidavit also require that it be filed with the court and an order issued to verify the fact. This is called a summary probate administration.
If you learn of a tenant’s death via some means other than notification from a family member and the unit is delinquent, attempt to reach the emergency contacts listed on the rental agreement. You should also call the local probate court to determine if the tenant’s estate has been probated and an executor has been named. If so, you can contact them to determine what to do with the unit.
If you’re unsuccessful in contacting the people listed on the rental agreement or any relatives or friends who are willing to resolve the tenant’s debt, you may then send a Certified Letter to the renter’s last known address and proceed with the foreclosure process. Depending on the state, there may be a waiting period to allow the estate to be probated before the sale can occur.
Just because a self-storage tenant dies doesn’t mean their obligations to their creditors end. Someone must pay the rent on the unit or it’ll eventually go into foreclosure. But if someone is attempting to resolve the matter, you should delay any enforcement of your lien rights, since the estate process can sometimes take weeks to complete.
Self-Storage Tenant Disappearance
The last scenario is simply the disappearance of the tenant, meaning that all contact with them is lost. Not only are they not paying rent (credit card disabled), but all emails are bounced, phone numbers are disconnected and letters are returned. This situation is even more disconcerting when the property stored in the space is unique or presumed valuable. It can leave you wondering what happened to this person and what you’re supposed to do now.
The law doesn’t presume that you have a duty to track down your tenants when they stop paying the rent. In fact, most self-storage lien laws simply require you to send a letter and post a few ads before enforcing the right to foreclose on the tenant’s property. Certainly, the law doesn’t expect you to initiate a search for your customer.
Most self-storage disappearances are defaulting tenants who’ve presumably abandoned their property and disconnected themselves from creditors. Yet, there have been situations in which renters who’ve “disappeared” have later been found to have died, been imprisoned, or suffered an injury or medical crisis that prevented them from contacting the facility or meeting their rent obligations. These circumstances have led some operators to reconsider immediate enforcement of their lien rights. Though it isn’t required by law, many will “red flag” those units and conduct further research. If you do so, you might be surprised at what you find!
The three Ds of self-storage—divorce, death and disappearance—are really quite common, and yet they can feel unusual when they happen at your own facility. The best approach is to proceed with caution. Follow the law and any court orders. At the end of the day, your goal is to protect your tenant’s rights and your business.
Scott I. Zucker is a founding partner in the Atlanta law firm of Weissmann Zucker Euster + Katz P.C. Practicing law since 1987, he represents self-storage owners and managers on legal matters including property development, facility construction, lease preparation, employment policies and tenant-claims defense. To reach him, call 404.364.4626 or email [email protected].
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