Self-storage rental agreements cover a myriad of operational possibilities, but not everything. It’s unlikely to find a clause that deals with tenant death or disappearance, for example, or what to do with the items in a unit rented by someone who’s getting divorced. Each of these situations presents unique challenges that require careful solutions. I’ll share some of them below. Just bear in mind: Your state laws may differ slightly from my guidance, so as always, check your local statutes before acting.
Your Tenant Dies
Of the three scenarios addressed in this article, tenant death is the toughest, though it’s certainly very common. Let’s approach it through a personal story.
One of my self-storage clients had a tenant who rented a unit from 1998 to 2018 without ever missing a payment. Then suddenly: no payment. The operator reached out to the renter’s emergency contact—his daughter—who told him her father had died. She said the storage company could just throw away his stuff. When the unit was opened, however, it was clear it contained items of value, such as war medals and awards, a set of antique rifles, and a coin collection.
So, what do you do in a case like this? My client got lucky. I was able to find the lawyer handling the estate and made sure all items were turned over to the estate’s administrator. But it isn’t always so simple.
In most states, the estate of a deceased self-storage tenant is still liable for making the rental payments. Generally, you have the right to foreclose if payment stops. However, there may be a waiting period per your state’s probate laws, and that waiting period may exceed the timeline in your state lien statute, so you must tread cautiously.
What if a spouse or child asks to enter the unit to retrieve items? Be careful! In most jurisdictions, you’re liable if you give the property of a deceased tenant to the wrong person. You don’t know if the tenant gave everything to someone else through a will. Even if you’re shown a will, it might not be valid.
One way to avoid these kinds of situations is to include a clause in your rental agreement that states, “Upon tenant’s death, serious illness, disappearance or incarceration, Landlord may turn over property stored in the Unit to anyone named in the Lease as an ‘emergency contact.’” In this case, the will won’t matter because you have a contractual obligation to turn over the items to a specific person. If you don’t have this clause, do your diligence before turning over any property to a family member. Otherwise, the safest route may be to hold an auction.
Your Tenant Disappears
This is similar to tenant death, and the above clause is most helpful. Without that verbiage in your contract, you’re still able to sell the items at auction once rent payments cease; but what if there’s a problem with the auction? What if you can’t find a copy of the lease?
In that case, you evict. Most jurisdictions allow a tenant to be served—if not found in person—by attaching a copy of the eviction pleading to the door of his last known residence. Eviction is the safest way to move forward in a disappearance case if auction isn’t possible.
The reality is you really don’t know if a tenant has disappeared or is simply no longer paying rent and avoiding all calls. The best course of action is to treat the tenant like any other non-paying customer.
Your Tenant Gets Divorced
Years ago, another self-storage client of mine received a temporary restraining order from a court preventing him from conducting a lien sale on a particular unit. The tenant had removed all her husband’s belongings from her house, placed them in the storage unit under her name, and then purposely never paid rent. The unit was up for auction when the husband discovered what had happened. The divorce was underway, so he used that to stop the sale.
I appeared before the judge and asked that the restraining order be lifted since we had, as we say in Texas, “no dog in this fight.” The court agreed and removed the order. The husband paid the rent, but we couldn’t release the items to him because he wasn’t the tenant on the rental agreement. Eventually, he obtained an order allowing us to release the items to his custody.
Divorce can be messy. But as a self-storage operator, you don’t need to jump in and get dirty. Just heed the following rules:
Lean on the contract. Who’s your tenant per the rental agreement, and to whom has the tenant granted access in the contract? Those are the only individuals who have a contractual right to enter the unit. What if the tenant who signed the contract wants to remove the spouse’s access privileges? He has the right to do so. If you want to make it cleaner, you can always sign a new lease with the existing tenant; but if you have a court order, see the next section.
Carefully read the court order. If you receive an order from a court, the language is important. Does the order restrict you? If it disallows the storage facility from performing contractual functions, hire a lawyer to handle the court. Does the order allow you to do something? If it allows a non-tenant to access the unit, follow it. Caveat: It might not hurt to call the court and confirm the order is real, just in case.
Don’t get involved in division of property. If you’re presented with a court order granting specific property within the storage unit to a spouse, so what? You do not need to get involved in the division of property. Hand the order back to whomever gave it to you and politely let him know you aren’t getting in the middle of this mess.
Consider terminating the lease. When it becomes clear that your facility is getting dragged into a messy fight, consider terminating the lease. Let the tenant know he has 30 days to move out (or whatever your lease allows in such situations). If he doesn’t, file an eviction proceeding. In other words, get the problem out of your business.
When necessary, refuse to rent. Let’s say you’re renting a unit to a wife, and her husband doesn’t have contractual access. Now, here he comes asking to rent a unit from you himself. You suspect he’s only doing so to get access to the property and possibly break into the wife’s space. This actually happens! Remember, you control your facility. You have the right to refuse to rent to someone if you suspect something fishy.
The key takeaway is this: Don’t be a victim of OPD—other people’s drama. OPD is a serious condition that affects many of us in our daily lives. Sometimes we’re doing well, business is good and then we get infected with OPD and things quickly go awry. Your self-storage rental agreement and the law protect you from having to be infected with this debilitating condition.
Murphy Klasing is a partner with Weycer, Kaplan, Pulaski & Zuber P.C. He 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 Oklahoma and 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.