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Self-Storage Employment Issues in Canada

Self-storage operators are crossing the U.S. border to expand their businesses, and although they may find similarities with how facilities generally operate in Canada as compared to their home turf, they must be aware of certain particularities that may affect operations. One key difference is in employment law.

Most significantly, Canada is not an “at will” jurisdiction. In the United States, the concept of “employment at will” means an employee may quit his job at any time for any reason; plus, the employer has the equal right to terminate an employee at any time for any reason.

In Canada, the courts have consistently held that every contract of employment, whether in writing or not, includes an implied term that no employee will be dismissed without reasonable notice or compensation unless the employer can establish justifiable cause for termination. In the event of such dismissal without cause, the Canadian employer is liable for economic consequences suffered by the employee.

In addition, the courts are sometimes forced to decide what period of notice is reasonable and the amount of compensation the employee is entitled to in lieu of notice. Any award is reduced by any employment income the terminated employee may have earned during the period of reasonable notice. That is not to say that employees cannot contract out of their right to receive reasonable notice. However, such notice must be at least equal to the minimum statutory notice periods provided within the laws of the particular province.

Further, the Supreme Court of Canada has ruled that any employment contract that attempts to contract out of minimum statutory notice periods will be considered void and unenforceable. A properly drafted Canadian employment agreement should include a contractual dollar limit to claims of lack of reasonable notice for termination.

Case in Point

A recent case in British Columbia provides a good example of this difference in employment rights, Pires v. Vectis Technologies Inc., in which Pires, a senior engineer, left his company to join a startup enterprise in a similar business. Pires had signed an employment agreement that stated, upon termination without cause, “prior written notice of three months plus three weeks for each complete year of employment with the company to a maximum of one year.”

When the new company began to suffer financial problems, Pires was fired, allegedly for negotiating with the company’s investors for a larger share of ownership with the company. The court found that Pires was entitled to the compensation set forth in his employment agreement, specially holding that the pretense for the termination was not a sufficient cause for termination. Instead, the court believed Pires was dismissed simply because the company went broke.

Expectations

An employment agreement is an essential requirement between a self-storage operator and its managers. This agreement communicates benefits of employment (such as health insurance and vacations) and expectations of jobs to employees. Commonly, an employment agreement clarifies a self-storage manager’s responsibilities. This becomes the basis for measuring the manager’s job performance.

Examples of the written job duties might include:

Employee shall be responsible for showing clean, empty storage units to potential customers by walking potential customers to storage space and back to rental office.

Employee shall be responsible, after renting storage units, for thoroughly completing the rental agreements, receipts, journal sheet, ledger card and insurance addendum.

Employee shall be responsible for collecting all rent including, but not limited to, accepting rent and following up on delinquencies, posting rent and miscellaneous income receipts, making bank deposits daily or when receipts are on hand, and reporting of income collection to manager on a daily basis as needed.

Employee shall be responsible for managing the bookkeeping system or computer system as designed and controlled by employer, and preparing and mailing weekly and monthly reports on a timely basis as specified by employer.

Employee shall be responsible for properly operating any computer, printer and gate-interface equipment.

Employee shall be responsible for walking the facility for daily security checks. Should the security of the facility be threatened, employee shall immediately report such a threat to local police authorities, it being expressly agreed and understood that in no event shall employee take any other action in connection with a threat to the facility’s security or the safety of the employee.

Employee shall be responsible for timely sending required tenant legal notices, making telephone calls to collect past-due rent and documenting these calls on tenant-ledger cards or in computer.

Employee shall be responsible for preserving the office in a clean, organized, business-like manner. This includes keeping windows, storefront door, flooring, restrooms and area outside around rental office clean.

Peacekeeping

Generally, an employment agreement can be used to clarify a number of issues between the operator and its employees, leaving little room for misunderstandings and disputes. The following are provisions that can be included in standard employment agreements for this purpose.

Recording conversations. In the event an employer provides an employee with any review or critique of performance under this agreement, or employer or its representatives visits or calls the facility posing as prospective tenants, employer reserves the right to, and employee agrees that, employer may record such conversations. Such recordings shall be the sole property of employer and will not be disclosed to any third party except in the case of judicial or other legal proceedings where such conversations may be at issue.

Background checks and credit history. Background and credit history checks are a condition of this employment.

Drug testing. Employer reserves the right to perform random drug testing at its discretion.

Smoking. No employee, under any circumstance, is permitted to smoke within the residence, the office or any of the storage units.

Uniforms. Any uniforms provided for the employee’s use must remain the property of the employer and shall be returned upon termination of employment. Employer reserves the right to withhold any final wages needed to replace said uniforms.

Company property. Upon the termination of this agreement, for whatever reason, employee shall return to employer all customer lists, books, records, keys and any other property of employer in employee’s possession at the time of termination, it being understood that all such lists, books, records, keys and other property shall remain the exclusive property of employer.

Here and There

Companies using U.S. employment agreements or handbooks for their Canadian employees may find documents are unenforceable across the border. Canadian law strongly favors employees in the context of employer bad conduct. No employment agreement will defeat a justifiable claim against a Canadian employer who has treated employees unfairly, especially in the context of job terminations.

Canada has proactive employment and pay-equity laws protecting women, racial minorities and persons with disabilities. The government and each province have passed statutes restricting an employer’s ability to discriminate among employees based upon race, sex, religion, national origin, age or physical disabilities. The main goal of Canada’s equity laws has been to require employers and trade unions to proactively identify and redress discrimination in recruitment, treatment, compensation, promotion and retention of employees who historically may have been disadvantaged in the workplace.

The search for self-storage managers can be challenging. Operators seek individuals who are equally comfortable renting units as selling boxes, and can handle sophisticated computer systems while coping with difficult tenants. U.S. companies hiring managers to work in Canada must be cognizant of the differences in laws that establish the relationship between employers and their Canadian employees, otherwise legal conflicts could arise. Operators might be best to seek counsel for legal assistance as they travel over the border to open their self-storage facilities.

Scott I. Zucker is a partner in the law firm of Weissmann Zucker Euster P.C. He represents self-storage owners throughout the country in matters that include contracting for construction, preparing lease agreements, defending tenant claims and handling employment disputes. Mr. Zucker can be reached at 404.364.4626; e-mail [email protected].

Citi Reorganizes Following $8 Billion Loss

After a fourth-quarter net loss of $8.29 billion, Citigroup said Friday it is splitting up into two businesses. This is the fifth straight quarterly loss for the financial giant.

In Citigroup’s reorganization, one business, Citicorp, will focus on traditional banking around the world, while the other, Citi Holdings, will hold the company’s riskier assets.

CEO Vikram Pandit’s move will allow Citigroup to sell or spin off the Citi Holdings assets to raise cash. It also reveals the company’s growing focus on back-to-basics lending and deposit-gathering, and dismantles the “financial supermarket” created a decade ago.

Source:  MSNBC.com,  Citi Posts Huges Loss, Splits Up the Company

Jobs Takes Medical Leave From Apple Inc.

After weeks of speculation about his health, Apple Inc. CEO Steve Jobs is taking a leave of absence from the computer and music-player maker to deal with health issues.

Jobs, who announced last week that he suffered from a hormone imbalance that caused him to lose weight, said he will be away from the job until the end of June.

He said curiosity over his personal health was a distraction and that his health-related issues have become "more complex" during the past week.

Tim Cook, the company's chief operating officer, will be responsible for Apple's day-to-day operations, according to a company statement.

Source:CNNMoney.com,Apple's Jobs Takes a Medical Leave

Short Movie on Self-Storage Screens at Sundance Film Festival

A short film titled “Steel Homes,” which focuses on a world of hidden treasures and secrets inside a self-storage facility, will be screening this month as part of the Sundance Film Festival’s documentary spotlight. Produced by Odd Girl Out Productions and Quark Films, the movie takes viewers through stories of heartbreak, loneliness, despair, liberation and adventure represented in individual storage units.
 
“I can still remember the first time I visited a self storage warehouse,” said director Eva Weber. “I was there to help a friend move her belongings but became absolutely fascinated by the eerie atmosphere of the space itself. You can almost hear the echoes of other people’s lives reverberating down the long corridors.

“The objects we store can literally tell the story of our lives―each ornament, photo or old gramophone record takes us on a journey through our past, present and into our future,” Weber said.

Made for the Scottish Documentary Institute, “Steel Homes” received its premiere in November at International Documentary Festival Amsterdam, one of the biggest documentary film festivals in the world. Weber is moving on to direct a longer film about self-storage auctions in Los Angeles, which she is intending to shoot this year.

To view a screening schedule, visit http://festival.sundance.org/2009/film_events/films/steel_homes.

Extra Space Storage Wins Google 'Website Workout' Contest

Extra Space Storage Inc. has been announced as one of only four companies nationwide to be selected by Google, the nation's leading search engine, as a winner in its "Website Workout" contest. Companies entered the contest to have their website optimized for free by Google's team of consultants to boost sales, sign-ups or leads. The other winners are Colonial Candle, Outrigger Hotels & Resorts and Team in Training.
 
The Website Optimizer is a free Google tool designed to allow companies to develop experiments and analyze the best possible combination of page design, copy and graphics. Extra Space focused on increasing the number of people doing "proximity" searches for its storage facilities. By highlighting the search function on its website, the company was able to increase the number of searches without reducing its conversion rate.
 
"We saw this contest as an opportunity to take a fresh look at our website," said Scott Jensen, interactive marketing manager at Extra Space. "Since the Web is often the first point of contact for our customers, we want our online experience to be as effective and efficient as possible. Google has been a great partner in this endeavor and has provided tremendous support and insight," he said.
 
Wider Funnel Marketing, which specializes in conversion-rate optimization, acted as a consultant on the project and will work with the four winners to increase site performance.
 
Extra Space, headquartered in Salt Lake City, is a real estate investment trust that owns/operates 684 self-storage properties in 33 states and Washington, D.C. The company is the second largest storage owner/operator in the United States. For more information, visit www.extraspace.com.

Strategic Storage Trust Finalizes $4.7M Acquisition in Manassas, Va.

Strategic Storage Trust Inc. (SSTI) finalized the $4.7 million acquisition of a 500-unit self-storage facility in Manassas, Va. The newly acquired storage center is located in the fast-growing Interstate 66 corridor about 27 miles southwest of Washington, D.C., and contains approximately 49,000 rentable square feet of self-storage space. The closing of the purchase from Godwin Store-It LLC brings a third major property into the portfolio of SSTI, a publicly registered non-traded REIT. For more information, visit www.strategicstoragetrust.com.

Barry Named VP of Investment Real Estate Group

John E. Barry

John H. Gilliland, CEO of The Investment Real Estate Group of Companies, announced the appointment of John E. Barry to the position of vice president for the self-storage brokerage firm. 

Barry will be responsible for overseeing the daily operations of the self-storage brokerage business, including property sales, due diligence, financial analysis and feasibility studies. As part of the promotion, he also became a member of the executive committee for the firm. 

Barry joined Investment Real Estate in January 2007 and became a top producer in 2008 with $24 million in closed transactions.  Previously, he was in the financial-services industry for more than 19 years, most recently as executive vice president and senior portfolio manager with a Pennsylvania money management firm, where he was responsible for more than $1 billion in assets under management and led a team of portfolio managers and brokers.

Barry is a member of the board of directors of the Pennsylvania Self Storage Association and has been a self-storage owner since 1997.   

Investment Real Estate, LLC, provides self-storage brokerage, construction and management services to owners and investors in the mid-Atlantic and Northeastern United States.  For more information, visit www.irellc.com.

 

Self-Storage Owner Killed in Building-Renovation Mishap

Tim Blake, owner of A&W Storage in Jackson, Mich., died Sunday night while doing renovations in the 83-year-old, downtown Blake Building, of which he was co-owner. A marble stone fell on the 53-year-old while he worked on the 12th floor, according to Jackson Police Sgt. Jennifer Carter. Blake’s death is believed to be an accident, and police are uncertain how it occurred.  
 
Blake and his wife, Donna, bought the former Harris Building in February 2003 and have since been renovating its residential and commercial spaces. He did much of the work himself and lived on the 15th floor.
 
The Blakes also revamped the former Jackson Racquet Club, turning it into A&W Storage.

Source: MLive.com, Blake Building Owner Killed in Mishap

Bitter Cold Sweeps Across Midwest

Record-breaking cold weather is sweeping across the Midwest today, with lows below zero in some cities. 

To the east, morning lows were in the teens along much of the Interstate 95 corridor that hugs the Atlantic from Maine to Florida. Temperatures in Michigan dipped to 19 degrees below zero, while snow caused more traffic nightmares in the Midwest.

It was zero in Cleveland, Ohio; 9 below zero in Chicago; and minus 42 in International Falls, Minnesota—a city that boasts the title, "Icebox of the Nation."

The wind chill effect made many temperatures feel even colder. Nashville, Tennessee, only expected a high of 22.

The National Weather Service said the bitterly cold temperatures will likely remain in the eastern United States through the weekend before returning to seasonable temperatures.

Source:  CNN.com,  Midwest in a Deep Freeze

NAREIT Supports Sales Tax Fairness and Simplification Act

The National Association of Real Estate Investment Trusts (NAREIT), in collaboration with a coalition of industry groups, wrote to President-elect Barack Obama and Congressional leadership this month urging inclusion of the Sales Tax Fairness and Simplification Act (STFSA) in economic stimulus legislation being discussed on Capitol Hill.
 
The bipartisan STFSA (H.R. 3396, S. 34) has been introduced by Rep. William Delahunt (D-MA) and Senator Mike Enzi (R-WY). The coalition noted that the proposal “would provide tens of billions of dollars in funding to many state and local governments at a minimal or no cost to the federal government.”
 
Currently, 34 states have adopted the Streamlined Sales and Use Tax Agreement (SSUTA), legislation designed to ensure retailers collect sales tax on remote sales. The STFSA would authorize states in compliance with the SSUTA to require out-of-state sellers to collect sales tax on remote sales. A study conducted by the University of Tennessee has concluded that state and local governments lose in excess of $30 billion in uncollected sales taxes for remote sales.
 
“Particularly during this time of significant state budget shortfalls, enactment of the STFSA would go a long way to helping states collect existing taxes already owed by state consumers,” according to the letter. “Further, enactment of the STFSA would allow states and localities to preserve jobs in essential service industries, continue to provide these essential services to our communities, and avoid having to impose new taxes to close their budget deficits.”
 
Along with President-elect Obama, the letter was sent to Speaker of the House Nancy Pelosi (D-CA), House Minority Leader John Boehner (R-OH), Senate Majority Leader Harry Reid (D-NV) and Senate Minority Leader Mitch McConnell (R-KY).