A Guide to Self Storage Agreements
A self storage agreement is a legal document that outlines the terms and conditions of a rental relationship between a self storage company and an individual or business who wishes to store their belongings at the facility. The purpose of such an agreement is to establish clear expectations and responsibilities for both parties, thereby minimizing the potential for disputes or misunderstandings further down the line. Typically, a self storage agreement will include several key components. These generally encompass the names and addresses of both parties, a detailed description of the goods being stored, the storage facility’s name and location, the duration of the rental term, and the cost of renting the space, along with the payment terms . The agreement will also cover rules regarding access to and use of the storage unit, security provisions, and liability clauses that delineate the extent of the storage company’s responsibility for the goods stored. Importantly, self storage agreements will spell out termination procedures and conditions under which property may be sold or disposed of if the rent remains unpaid or other obligations are breached. By clearly setting these terms and conditions for the storage relationship, both parties can enjoy peace of mind and financial protection.
What’s Included in a Storage Agreement Template
Every storage agreement template should encompass terms of use, payment details, and termination policies at a minimum. These are the basic elements that guide the relationship between the storage unit provider (lessor) and the person doing the storage (lessee).
The terms of use should identify what the items being stored can and cannot be used for. For example, if your storage facility is alongside a marina, for example, the items stored could not be kept for commercial use to support a competing business.
Terms of use should also be set in the template agreement because they set forth the usual process for access to the storage facility. How much notice must be given to retrieve items from the self storage unit? How long do those retrieving the items have to remove things from the storage unit? Must those removing items do so in a specific manner, or is anything fair game for wanting or not wanting to remove from the storage unit?
Payment details should clearly be specified in the storage agreement template. Monthly rent can be due upon a particular day of the month. Additionally, if there is any sort of late fee for those who do not remit the monthly rent immediately upon its due date, the late fee policy should be explicitly detailed in the storage agreement template.
Termination policies usually include how early the lessee must provide notice to the lessor that they no longer require the use of the self storage unit.
Advantages of a Storage Agreement Template
One of the biggest advantages to using a template is the ability to create a uniform and consistent agreement. If you have multiple locations or facilities, you’ll want to make sure that each of your agreements is identical. Besides the location address and the date, the self storage unit lease should each contain the same terms and conditions. If you make a change to one agreement you’d like to carry through at each facility, a template let’s you play copy/paste easily.
Templates can also save you time. The biggest investment you’ll make is your time. After all, you own a business not a legal practice! You’ll need to think through some issues at the beginning. Once you do that, you can use your template as the basis for each new lease for the rest of the day, week, month or year.
The self storage industry is heavily regulated by local and state governments. Using a template helps ensure that you don’t overlook a local or state law that might apply to your lease. Keeping a template with your compliance notes allows you the peace of mind that your self storage lease is always compliant with local and state laws.
How to Personalize Your Storage Agreement Template
In most cases, the starting point for the consideration of the terms to be included in a self storage agreement is a template that a self storage business has developed. Customization of the template so that it is specific to the self storage business and its operating procedures is critical to good legal document practices. This typically involves the elimination or modification of certain standard provisions in the template and the addition of exhibit and/or supplemental provisions to address the particulars of the business being served by the self storage. The basis for this customization can be developed based upon the following:
The identification of the reasons why any particular term should be eliminated or changed and what the nature of the proposed change should be; The identification of terms of the proposed template that are not contemplated in that business’s operating procedures and how they should be handled by that business; The identification of situations not contemplated in the proposed template where a term may need to be added; The identification of any other specific decision points where the use of a standard term may not be appropriate and the approach to deal with that situation. When the consideration of a particular term has been completed, the business should document its decisions with respect to each such term in a separate written narrative that identifies the following: (a) the provision in question, (b) the proposed change to the provision (if any), (c) the justification for the proposed change, (d) a recommendation as to whether an alternative form of the provision should be included as an exhibit to the agreement or as a series of supplemental exhibits to the agreement and (e) a recommendation as to the need for any other changes to the template that are not contemplated in (a)-(d). In virtually all circumstances, the proposed changes to the template, as well as the analysis described in the preceding paragraph, should be undertaken with the benefit of competent legal advice.
Storage Contract Pitfalls
Mistakes involving the identification of the parties, such as using the wrong legal entity or using unrelated parties, are common. In a self storage property, the landlord will likely be an entity (i.e., an LLC or corporation) rather than an individual. Thus, it is important to identify the party as the landlord in the agreement, so it is not confused with the manager of the property. It is important that the agreement uses the name of the landlord entity exactly, including the actual words "limited liability company" or "corporation." If the name includes "LLC," for instance, a reference to the landlord without "LLC" would create a potential issue with enforcing statutory notice provisions. Another common mistake involves the use of the lease in states with statutory lien laws. These include self-storage lien laws and garage-keeper’s lien laws, which have specific statutory requirements to be enforceable. It often is best to draft a stand-alone lien document and include a cross-reference to it in the lease. A third common mistake is incorporating standard terms , such as pet policies, in the self-storage lease. These offering-of-a-service letters may not be appropriate for a self-storage policy and may affect whether the property is properly covered by the insurance policy. Some common mistakes arise from using a template where the user neglects to modify the relevant sections or where the user fails to carefully read the section. It is important to read the entire lease so as not to overlook provisions that may not be applicable or that should be modified. A fifth issue is using the wrong form, such as a rental agreement instead of a storage space lease. The rental agreement is for a periodic rental, while a self-storage lease agreement grants the tenant the right to occupy space until its relinquishment. The self-storage lease typically also includes language that limits the tenant’s ability to relocate the rented space, such as requiring the advance written consent of the landlord and possibly the payment of an administrative fee.
Legal Issues and Regulations
Depending on the self storage operator’s location, the state will have statutes that provide additional rights, restrictions, and obligations. South Carolina, for example, prohibits self storage operators from placing a lien on personal property stored at the facility if the property owner is a victim of a violent crime, the property owner and the perpetrator had a dating relationship that ended in violence, and the property owner provides documentation of the violent crime to the operator. Although this provision may apply to only a few instances of a facility’s clients, the operator must still comply with the statute or open itself and its employees up to liability.
Fortunately, most self storage statutes specify that the obligations of self storage operators under the statutory lien scheme are in addition to the general common law and the statutory rights, obligations, and remedies. This means that the self storage operator is free to supplement those statutory requirements without fear of "overburdening" itself. However, for all contracts the Uniform Commercial Code governs the sale of goods accepted as payment for a debt. Therefore, the contract must cover this particular issue, placing the risk of loss on the self storage operator in order for the self storage operator to benefit from its lien rights once it sells the stored goods. For example, if the contract goes so far as to return property that sells for less than the debt, or places risk of loss on the property once it is sold, the self storage operator’s position could be materially weakened in favor of the debtor.
However, the self storage agreement contract provisions made before an event that may trigger a specific statute may be overridden or overruled by that statute. For example, in South Carolina if the self storage operator is to include the self storage operator’s lien fees within the reasonable cost of renting another unit, the contract must state that it includes such.
Self storage operators should always keep the jurisdiction’s statute and their specific contract in mind. For example, California courts have held that any ambiguity in a contract is construed against the drafter. Therefore, if a self storage operator has every intention of enforcing a remedy fully permitted under statute, they should be sure that the statute language is included in the agreement.
Where to Get Templates
The best place to find reliable self storage agreement template forms is to go to the self storage association, state self storage associations, and the self storage lawyers. You can usually get member pricing up to about $25 a form. They tend to get updated from time to time so you should be able to get a good current version. Another good resource is to try to find someone in your region that prepares self storage forms and has them on their web sites. You could also try to find some self storage lawyers, and ask them if they will sell you a copy of their forms. Another good source is non-member pricing from a self storage association or a state self storage association. Your final source, for pricing at no more than $45 per form, may be look for a generic small business forms company that prepares forms for all kinds of small business use. You do want to double check with the better business bureau to make sure they are reputable before you invest money in them.
Self Storage Agreement FAQs
What are the renewal terms of the self storage agreement template?
Most self storage agreements include a clause for automatic renewal of the agreement if the tenant fails to terminate it. The time period for renewal is typically outlined in the agreement, and advance notice is usually required for the renewal to be valid.
Do I need proof of insurance when renting with this agreement?
Some self storage agreement templates require tenants to provide proof of coverage, while others simply recommend insurance. If the leasing company offers a unit within a fenced-in and secure facility, they may be held liable for the unit’s contents in certain places unless an exclusion applies. In this case, the tenant would need to provide proof of insurance for their contents prior to moving in to ensure that they are covered.
Does the self storage agreement template lay out the procedure for dispute resolution?
While it may not be specifically addressed in the agreement, there are dispute resolution procedures built into the law that govern the leasing of space for personal use . When necessary, the parties can bring a mediator to the facility to help them work through their problems. Many self storage unit owners want to avoid lengthy and costly litigation, so they strive to maintain a good relationship with their clients in order to keep them happy and returning for future business.
Does the self storage agreement template allow for subletting or the use of a premises by anyone other than the signatory on the agreement?
A self storage agreement template may include a clause that prohibits a tenant from sharing their unit if it is run by a more corporate entity. It is simply more work for the business to have to track multiple tenants if each person needs their own keys or lock combinations for a single unit. However, many smaller, family owned facilities will allow the sharing of units between family members only.
