Reprinted with permission from the “Legal Monthly Minute February 2022” Newsletter.

Like all businesses, self-storage operations are subject to risk from dissatisfied customers. And thanks to the megaphone of social media, their displeasure can easily become widespread.

If a dispute arises with one of your tenants and the matter can be resolved, it’s important to include language in your settlement terms stating that the facts of the incident and its resolution are to remain confidential. Most importantly, the settlement should dictate that the customer agrees to withdraw any negative social media posts that were placed in connection with the event and desist from any future negative posting.

The intent of a settlement in self-storage—whether the dispute involves rent, claims of property loss or damage, or even a lien sale—is to resolve the ongoing conflict. The goal isn’t only to satisfy the unhappy customer but to avoid the risk of negative online reviews. This is why confidentiality and non-disparagement provisions should be included in any customer settlement agreement. Here’s how to present them in general terms:

Confidentiality. Claimant agrees that the terms of this Agreement shall be confidential such that Claimant may not disclose the terms or conditions of this Agreement to any person or entity, unless ordered to do so by a Court of competent jurisdiction or to Claimant’s attorney(s) or accountant for tax and/or income reporting purposes. The Claimant understands and agrees that this Paragraph is a material provision of this Agreement and that any breach of this Paragraph shall be a material breach of this Agreement and that the Respondent (business) would be irreparably harmed by any violation of this provision.

Non-Disparagement. Claimant agrees that it will not, at present and at any time in the future, in any manner or by any medium, disparage Respondent (business), its predecessor and/or successor companies, affiliates, its current and former officers, directors and employees to the press or to any other third party through any verbal or written medium including, but not limited to, social media. For the purpose of this Agreement, disparage is defined as comments or statements that would be detrimental to the good name and/or reputation of the Respondent (business), its predecessor and/or successor companies, affiliates, its current and former officers, directors and employees. The Claimant understands and agrees that this Paragraph is a material provision of this Agreement and that any breach of this Paragraph shall be a material breach of this Agreement and that the Respondent (business) would be irreparably harmed by any violation of this provision.

The power of social media, especially as it pertains to the reputation management of your self-storage business, is significant. If a customer dispute arises and can be settled, you should strongly consider these elements of the settlement agreement as fair consideration for reaching a resolution.

Scott I. Zucker is a founding partner in the Atlanta law firm of Weissmann Zucker Euster Morochnik & Garber 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].