If you have seen Storage Wars or similar programmes about storage auctions, you likely already know that there is a business in the sale of long forgotten cheap self storage units and their contents. That’s the thing though, we often assume those units are sold many, many years down the line when perhaps the person simply went off grid and didn’t pay. Maybe it belonged to somebody who passed and never told anyone about their unit. Maybe, it was the unit of somebody with a secret life. Your thoughts go to all the scandals and stories, whereas in reality, those units probably belonged to somebody just like you and I. Somebody who simply forgot to pay their bills, or who didn’t approach the unit to sort out an issue with payments in time.
If you do rent a handy cheap self storage unit then it is really important to understand your rights when it comes to missed payments. The fact is that there’s a lot more you can do to save your things, especially in the early stages of struggling to pay. It doesn’t have to reach the stage where your things are being auctioned off.
So, What Are My Rights When It Comes To Missing Self Storage Payments?
Your rights in regards to a particular cheap self storage facility will be detailed in the contract you sign and may differ from other units. However, in most cases, missed payments means that the facility essentially has a right to your belongings in their unit. They can hold onto your things until you pay your debt. If the debt is not paid eventually, they can sell your things on to recover some of the costs of your debt. They do however, have to send lots of notices and give you lots of chances to pay your debt first.
What To Do To Stop Your Storage Unit Being Sold
As with most cases of debt, hiding from the problem is only going to make things worse. If you know you will not be able to pay your self storage bill before the payment is due, speak to the unit and let them know your situation. The same goes for missing a payment and knowing you can pay it again. Be honest with the manager and let them know your situation, they will more than likely be able to come to some sort of arrangement with you. They don’t want to have to chase you for payments and go through the expensive process of legalities. They want that unit empty so they can rent it to somebody else. So, it is in your best interest and theirs to discuss your financial situation and to come to some sort of agreement. If you do not approach them about missing payments, then they will follow the process of chasing payment until such a point they can legally sell the contents of your unit to empty it. The facility doesn’t want to have to chase you for payment, and you don’t want to lose access to your things. Don’t let it get to the stage of unit repossession, and approach your facility first.
What to Consider Before You Sue for Negligence
Before you make a claim against a storage facility for negligence, there are a few things you’ll want to check to be sure the facility can be held liable.
• Thoroughly review the rental agreement. Most rental agreements include a clause that limits a tenant from suing the storage facility. If it doesn’t, ask yourself the following questions:
Is my complaint addressed in the agreement?
Does the facility owner have a legal duty to protect my belongings from pests, floods, leaks, fires, or any other hazards?
Was the damage to my possessions actually a result of negligence?
Has the storage facility blatantly ignored any provisions written out in the agreement?
Are there protocols listed to help solve tenant-owner disagreements?
Reach out to the owner or manager of the facility. Your storage company has a duty to respond to formal complaints and act on them accordingly. Keep a clear record of all communications to serve as evidence if they fail to address your complaint.
Keep a detailed account of all the damages you’ve incurred at the storage facility. If possible, take pictures of any damaged items.
How to Sue a Storage Facility in Small Claims Court
If you are planning to sue a storage facility for negligence, follow these four steps:
1. Gather all Evidence: Among all cases in small claims court, negligence is perhaps the hardest to prove. So arm yourself with as much evidence as possible. This could include photos of the damaged items and records of communication with the facility owner, such as text messages, emails, or call logs.
2. Fill out a Complaint Form: You don’t have to draft your own document from scratch. Most district court clerks have complaint forms available to use or copy. When you get the form, fill it out explaining the amount of money being claimed, cause of action, and the reason for suing the storage facility.
3. Serve the Storage Facility: The district court clerk will provide you with the documents necessary to be served to the facility owner in order to notify them of your complaint and intent to sue.
4. Appear in Court: If you want your case to progress, appearing in court is a must. Submit your evidence and be prepared to argue your case.
Forty-six states now have some sort of statute that at least, in part, discusses the lien rights of a self-storage operator. Some have full chapters devoted only to self-storage, while others still lump it in with other lien rights. However, many of the current laws are in need of a good overhauling and modernizing. In some cases, they’re more than 30 years old and fail to reflect what the industry has become since they were written. Eight states have some type of law governing the late-fee amount that can be charged in a self-storage owner/tenant relationship. Most of these bills are favorable to the industry, and self-storage associations of the remaining states recognize the value of legislation to set a reasonable late-fee law that will protect operators from potential litigation. Several states have introduced legislation to impose sales tax on rents charged by self-storage operators. A few, including have even been successful in passing on this new tax to industry consumers.
Storage operators have continued to receive nonspecific warnings from the Department of Homeland Security that their facilities might be used to store materials that could be unleashed in a terrorist attack or stolen property intended to raise money to fund terrorist organizations or opportunities. As a result, many have begun to use employee and tenant screening, sometimes in the form of credit reports but more often criminal histories.
In late 2004, the Self Storage Association introduced its first attempt at a criminal-screening package known as “Counter Measures.” Several vendors are also making screening tools available that will allow operators to instantly check criminal and credit backgrounds. Many software providers are working to meet the demand by integrating screening abilities into their programs.
Last year, the government revised its overtime regulations. However, as many states have policies that are stricter than federal guidelines, the new rules do not apply. Further, the new law doesn’t really answer questions about whether a self storage manager is an exempt or nonexempt employee, nor does it clarify the definitions of these terms. We at least know that any full-time employee earning less than $455 per week cannot be exempt and is entitled to overtime. There are many storage operators concerned they may be facing a potential overtime claim because of having treated their managers as exempt employees.
Zoning and Eminent Domain
Zoning also continues to be an issue for new and expanding facilities around the country. Now that zoning boards tend to lump mobile-storage facilities in with self-storage, it is becoming increasingly difficult to get approval. Part of the problem is when the industry started, it gravitated toward high-visibility areas such as expressway exits or large intersections. This normally wouldn’t be an issue, but unfortunately, there are some unattractive or poorly maintained facilities out there, and public perception is hard to change.
Finally, as the industry has proliferated, we are seeing more negative media coverage about the industry pertaining to burglary, property damage or misuse, and drugs.
If you don’t have a provision in your lease agreement, you should immediately insert language that allows you to fax and email current tenants from the date they sign their lease until final move-out (including full payment of all amounts due). If you don’t, you will lose opportunities for marketing and lease enforcement/collection that you are probably already using.
The filing tenants have claimed that while they thought they were renting a certain size unit, in actuality, it contained less rentable square feet than advertised, stated in the lease or shown on a floor plan, and they’re looking to recoup a certain amount of money in back rent, plus other fees and legal costs. While we may be talking about a small amount of money per each individual tenant, when the amount is multiplied by several tenants over many years, the bottom line becomes significant. Further, attorney’s fees are often awarded as part of the judgment, so while a claim may settle for little or no actual money to the customer, there may be a large payment in attorney’s fees to the class-action law firm. There are several obvious ways to fix your potential exposure in this issue, including making sure all information that discloses the size of a space (leases, brochures and floor plans) clearly says the size is approximate and the tenant is not entitled to a rent adjustment if the unit contains more or less square footage than stated. You may also want to stop referring to units by size (i.e., 10×10) and refer to them instead as a “one-room unit,” “two-room unit,” “small-house unit,” etc. This is a bizarre concept, but it will protect against this ridiculous litigation. Adding language about approximate size is another change you must consider making to your lease.
Many storage operators use statements in their marketing they cannot support in a court of law. For example, looking through the Yellow Pages, I have seen statements such as “Manager on site—24-hour monitoring of the premises.” While the facility may have a manager on site, he is not really watching out his window 24/7. Similarly, if the manager goes on vacation or the facility is without a manager at one point for any reason, the owner cannot back up his claim.
In past columns, I have discussed use of the words “safe,” “security,” “secure” or others that imply a facility is more safe, more secure or better protected than its competition. Unless these claims can be fully documented and supported, they can come back to haunt a self-storage operator. Furthermore, the questionable advertising, particularly in the offering of specials. If a promotion is too good to be true and has a catch, or if a facility is not really offering exactly what the public believes it to be, an operator may find himself in a lawsuit or charged by the state’s Attorney General for deceptive sales practices.
An argument being used more frequently in lawsuits against self-storage operators. The basic line of reasoning goes something like this: Because of something said, done or implied by the agent at the facility, or the advertising or marketing materials of the facility, the tenant relied on the facility to (fill in the blank): have more security, maintain a climate that would prevent mold, prevent theft, etc. The reliance argument has multiple applications, but there are two significant ones pertaining to self-storage. First, if a facility’s advertising implies or states it is “safe and secure,” and a tenant’s unit is burglarized, the site owner may find himself in a lawsuit that alleges he is liable. The assertion is that because of statements made in the facility’s advertising, the tenant relied on the facility to be secure and chose to rent a unit.
Implied activity is the second area where storage owners run into trouble. For example, if you have dummy or nonfunctioning video cameras on your property, you could find yourself in the midst of a reliance argument that goes something like this: “Because of all the video cameras I saw on the property, I relied on the fact that my goods would be safe or, if it they were stolen, there would be a videotape to help police find the culprit. Therefore, I want to hold you liable for the loss, even though your lease says you are not otherwise responsible.”
In the upcoming year, you are likely to see more state and federal restrictions on the disposal of business records that contain tenant information, such as leases, applications and credit-card forms. Eventually, shredding will be required for disposal of almost all records.
You will see more requirements imposed on pay-with-rent and mail-order tenant-insurance programs by state insurance-licensing departments. Some industry insurance companies have stopped writing new pay-with-rent policies and are even withdrawing existing policies in states where it is unclear whether an insurance license is required to collect premiums. Several states, including Utah, have begun providing guidance or issuing limited licenses for the purposes of allowing a self-storage operator to offer pay-with-rent insurance.
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It’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!
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