By Murphy Klasing
“Say what you mean, and mean what you say.” It’s a common cliché, and yet many business owners fail to follow that time-tested rule. Every company that deals directly with consumers makes promises about its product or service—it’ll relieve heartburn, re-grow hair, help you sleep, improve your swing, improve “performance,” and so on. When a product fails to deliver on the promises made, lawyers like me start making money.
Self-storage facilities aren’t immune from this risk. Hopefully, after you read this article, you’ll have some ideas on how to avoid liability from the words you use in your facility advertising, promotions, signage and communication with tenants.
If you’re a self-storage owner, your tenants should each have a signed lease. In nearly every state, the lease primarily—if not exclusively—controls the relationship. It sets out what you and the tenant will and won’t do. If your facility doesn’t provide security for tenants’ stored goods (guards, specialized locks, 24-hour surveillance), that should be explained in the lease agreement.
In my experience, most self-storage facilities don’t provide security. Sure, there may be keypad entry, but that’s to keep people out who don’t pay. There may be video cameras, but those are for the protection of your employees. Do you feel confident you won’t be liable if a thief breaks into a unit and steals items from a tenant?
Consider this: A prospective tenant asks the facility manager, “Is this a safe location? Will my stuff be protected here?” The manager, wanting to make the sale, says, “Absolutely. We never have break-ins, and we have keypad entry and cameras.” The prospect says, “Whew! Now I know this box of gold will be safe.”
A week later, that tenant’s unit is broken into and the gold is gone. The tenant sues. Your lawyer says, “Sorry tenant, your lease clearly states that we don’t provide security.” The tenant’s lawyer says, “That may be, but your property manager told my client this place was safe, never had break-ins, and there are security devices on the property.” Your contract begins to look like fax paper from the 1980s, faded and curled.
The law works like this: If you entice a customer into purchasing your service or produce with statements about its quality, you’d better deliver. If you don’t, you may be accused of “deceptive trade.” Your contract may sound great, but you can’t promise something orally and then flash a contract in the tenant’s face like a shield that says the opposite.
The lesson here is, if you don’t provide security, don’t say you do. Take down any signs that say “Cameras on property are recording to aid in law enforcement,” “24-hour security surveillance” and “Keypad entry for your protection.” When a tenant asks, tell him you don’t provide security, and that’s why you suggest he purchase a really good lock … and tenant insurance.
Advertising is a style of persuasive argument. It’s meant to convince someone to use your self-storage facility, not the one down the road. National companies use phrases like, “The self-storage experts,” “Tomorrow starts here” and “Your self-storage solution.”
When you advertise, make sure everything in your flier, commercial, brochure, etc., is accurate. If it says your tenant-protection plan covers earthquake damage, make sure it does. Don’t tell customers your rent is the best in town if you intend to mark it up every six months to where it becomes more expensive than that of competitors.
The phrase I’ve seen result in the most self-storage litigation is “climate-controlled.” It’s a phrase many facility operators use, but is it accurate?
What is climate control? If you ask 10 different people, you may get 10 different answers. Let’s break it down. “Climate” is the air quality, temperature and humidity of the unit. “Controlled” means the facility is literally controlling the climate. As with anything in life, if you’re in control, you have only yourself to blame if you lose it. If you tell your tenants their items will be in a climate-controlled space, they’ll expect those items won’t melt or freeze, or get wet, moldy or mildewed. When their goods are destroyed by these things, they’ll sue you for not meaning what you said.
I’m not suggesting the industry take a massive u-turn and get rid of the phrase “climate-controlled,” but you should define what that means in your lease agreement. Consider the following example language:
“You are leasing a climate-controlled unit. At [Self-Storage Facility], we strive to maintain a humidity level of no more than ____ and temperature of no greater than ___ and no lower than ____ throughout the year. Of course, extreme weather conditions, electrical outages, and unforeseen breakdowns in equipment may alter the humidity and temperature temporarily. You are encouraged to periodically inspect the items in your unit. You are also prohibited from bringing any items into your unit that are wet, damp, or that contain mold or mildew. You understand by signing this lease that although your unit is “climate-controlled,” [Self-Storage Facility] is in no way guaranteeing that the air quality, humidity or temperature will remain as desired at all times.”
Further, as a property owner who’s “in control” of the environment, you should conduct regularly scheduled maintenance on all HVAC equipment, especially during extreme weather months. Keep a detailed log of these checks and hold on to your receipts. It’s very valuable to a jury to see you did all you could do to maintain that controlled climate if someone accuses you of the opposite.
These are just three examples of how language can get your self-storage business into trouble. Here’s a suggested test for anything you tell a customer: Ask a friend or family member who isn’t in the storage business to listen to your sales pitch, advertisement, etc., and ask what he thinks each “promise” means. You may be surprised at how broadly he interprets words you thought were much more narrow.
Once you’ve done that, consider running the language by an attorney. That one-hour fee now might save you thousands of dollars later.
Murphy Klasing has a wide range of appellate, arbitration and trial experience, successfully handling numerous litigation matters. With more than a decade of experience in the self-storage industry, he serves as counsel for Public Storage Inc. in Texas, and has defended matters involving allegations of breach of contract, code violations, employment issues, fraud, negligence, personal injury, premises liability and theft. To reach him, call 713.961.9045; e-mail [email protected]; visit www.wkpz.com.