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The Legal Limits of Marketing Your Facility

July 1, 1998

6 Min Read
The Legal Limits of Marketing Your Facility

The Legal Limits of Marketing Your Facility

Scott Zucker

The following article was reprinted with permission from the Mini-StorageLaw Commentary, published by the law firm of Shapiro, Fussell, Wedge, Smotherman &Martin. Marketing your facility is an essential part of operating your self-storagebusiness. Without customers, all you have is a lot of space for rent and, worst of all, norevenue. Every self-storage owner or manager knows the importance of "selling"his services to the public. What many operators do not know are the risks of"overselling" their services and the potential liability that may await them formaking promises they can't keep.

If nothing else, the catch phrase "truth in advertising" should govern afacility operator's actions while marketing his facility. Whether it is through YellowPages advertising, brochures, signs or just word-of-mouth, telling the truth about yourfacility will guard you from later claims by your tenants that you misrepresented to themthe services to be provided for the rent that was paid. For example, if your facility hasvideo cameras that are on 24 hours but are not monitored, you cannot say you offer"24-hour security." Instead, you can say that you offer "24-hoursurveillance." Similarly, if you have managers living on site, you cannot say thatyou have "24-hour on-site managers." Instead, you can say you have"resident managers." Whatever the example, it is always best that the statementbe factual. It is also always better to be more specific in your advertising about whatservices your facility provides so your customers will not expect more than is providedand be disappointed.

It is equally important in your advertising that you choose descriptive wordscarefully. Facility operators should never use words such as "guarantee" or"promise" unless it relates to "friendly service." Certainly, afacility owner or manager should never promise or guarantee the safety or security of itstenants' property, and should always avoid using words such as "security" in itsadvertising.

By simply glancing through the Yellow Pages under "storage," it is common tofind statements like "security fences and gates," "security-code accessgates," "full security fencing and lighting" or "safe and securestorage." These phrases could connote that the self-storage facility is promising tosafeguard its tenants' goods, which is exactly opposite of what a self-storage facilityprovides. It is much more appropriate to use phrases such as "perimeterfencing," "personalized-code access gates" or "fenced andlighted."

Once again, self-storage is the business of renting space suitable for storage. It isnot a warehouse-type business and does not provide for the care, custody or control of itstenants' goods. Yet, if a storage facility represents through its advertising that itstenants' goods will be safe and secure, it risks altering its legal obligations to itstenants to make it responsible for the protection of those goods.

For example, in a case decided in Washington state, a tenant whose property was stolenfrom a Shurgard facility sued the company for the loss. As part of its case, the tenantargued that Shurgard had falsely advertised the security of the facility. Specifically,the tenant claimed that Shurgard had advertised in its Yellow Pages ad: "We have safestorage all locked up," and in a separate flier, "Shurgard managers live righton site... making sure everything is safe and secure." Last but not least, the tenantargued that the name "Shurgard" was meant to imply a "degree of diligenceand security."

Although the court in the Washington case did not find in favor of the tenant on itsloss claim, it did not disallow the tenant's claim for false advertising under the state'sConsumer Protection Act. Since the case was ultimately settled, the issue of whether therehad been false advertising by Shurgard was never resolved. Unfortunately, that leaves thequestion of what is appropriate storage advertising to later cases. However, the Shurgardcase provides a strong warning to other storage operations to avoid overselling in itsadvertising.

A recent case decided in Michigan provides another example of how advertising can get aself-storage facility into trouble. In this case, a tenant's property was destroyed by afire at the storage facility. The tenant sued the storage facility for the property lossand argued that the facility's advertising was fraudulent. To support its case, the tenantshowed that the facility represented in its Yellow Pages advertising that the storageunits were "fire resistant." The tenant claimed that since their property wasdestroyed by fire, such a representation was fraudulent. In its defense, the storagefacility presented testimony of an expert who attested that "fire resistant" didnot mean "fire proof." Ultimately, the storage facility was able to prove thatthe materials used in the construction of the storage facility were actually fireresistant, and that fire resistant was not synonymous with fire proof. Although thestorage facility won the case, the fact that the lawsuit arose over the words "fireresistant" and "fireproof" provides another lesson to storage owners to becareful in the words they select for their advertising.

In addition to truthful advertising, it is crucial that facility owners and managersnever make false representations to their customers about security issues or whether ornot prior incidents have occurred at the facility. A facility manager must be honest inanswering these sorts of questions, both with prospective and current tenants. Forexample, if a potential tenant asks if there has ever been a fire, theft or flood at yourfacility, the manager must answer honestly. The owner or manager is allowed to say,however, that since the incident occurred, efforts have been made to prevent futureoccurrences (if, in fact, such efforts have been made).

If a facility operator acts with deceit, the court can choose to invalidate a tenant'slease based upon the fraudulent actions. In a recent case decided in Georgia, a tenantwhose property had been stolen sued the facility for the loss. The tenant claimed that thestorage facility had committed fraud based upon misrepresentations as to the occurrence ofprior break-ins. The tenant argued that had he known prior break-ins had occurred, hewould never have rented the space. Although the facility had a very strong leaseprotecting them from liability for such a loss, the court held that the tenant's lease wasvoid due to the manager's false statement to the tenant that there had never been a theftat the facility, when in fact such thefts had occurred. The court ruled in favor of thetenant for the value of the stolen goods. The most important aspect of this case is that,due to the misrepresentations made to the tenant, the court ignored the otherwise strongprovisions of the lease that would have protected that storage facility from the tenant'sloss claim.

Most commonly, tenant complaints arise where their property is stolen or damaged. Ifyou have told the truth about the risk of self-storage, have not promised the security ofyour tenant's goods and have been honest in answering questions posed by your tenants,your defense to claims by tenants that you are responsible for the loss will bestrengthened. Certainly, nothing can prevent a tenant from suing a facility for the lossor damage of its goods. However, in order to enhance a facility's defense to such claims,it is becoming increasingly important for a storage facility to be clearer about theservices it provides. As shown by recent court decisions, any misrepresentations totenants can affect a storage facility's rights to defend itself on claims brought bytenants. Marketing is essential to a self-storage facility's success, but if not handledcarefully and honestly, it can also be the reason for its failure.

Scott I. Zucker is a partner in the Atlanta law firm of Shapiro, Fussell, Wedge,Smotherman & Martin, LLP. The above article was reprinted from Mini-Storage LawCommentary, a newsletter published by the firm for owners and managers of self-storagefacilities. A frequent contributor and Inside Self-Storage Expo speaker, Mr. Zuckerspecializes in self-storage law and construction litigation. He may be reached at 1360Peachtree St., Suite 1200, Atlanta, GA 30309; phone (404) 870-2200; e-mail [email protected].

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