What Is a Self Storage Rental Agreement?
A self storage rental agreement is the written contract between the self storage facility owner or manager and a customer which allows the customer to rent space on the property. Relying on verbal agreements can lead to disputes when customers do not remember the same terms that the facility owner remembers. These disputes can lead to costly legal fees, loss of rent, as well as loss of property. In addition , the Act does not apply to rental agreements that are not in writing.
Facilities can use rental agreements in two fashions. Rental agreements can be used to protect the facility or they can be used to protect the customer. Your rental agreement should include elements to protect the facility and the customer. The amount of protection for either party will always depend on what may be negotiated to satisfy a particular customer or facility owner/manager.
The Major Parts of a Self Storage Rental Agreement
A self storage unit agreement typically contains the following components:
Identification of Parties
The parties to the self storage rental agreement typically are the self storage facility owner (or operator) and the renter or occupant of the unit(s), although the storage unit itself and the personal property stored in the unit may also be the subject of lien rights described in the agreement.
Description of Storage Unit
The rental agreement will set forth in detail the location of the unit and the property located within the unit, typically following the surveyor’s "lot and block" nomenclature: e.g., building A, bay 1, unit 1032. The description will also usually indicate the physical dimensions and the square footage of the space (which may or may not include the space occupied by any locks, chains, or other closing devices).
Payment Terms
Under the terms of a storage unit rental agreement, rent is typically due in advance on the first day of each month. The terms of payment can vary between owners and operators, so it is always important to read the agreement carefully. The unit rent may be "all bills paid" and denote one monthly charge for the storage space including utilities and fees. Alternatively, an owner or operator may charge extra for items like water, utilities, property protection insurance, second locks, padlocks, seismic protection, maintenance, and pest control.
Duration of Lease
Many self storage rental agreements allow the occupant to remain in the unit on a month-to-month basis until the occupant voluntarily vacates the space. Other rental agreements will state that they are for a specific term (for example, six months or one year) or are terminable upon default or by the owner or operator with appropriate advance notice to the occupant. The agreement may provide for continued month-to-month renewal of the agreement unless the owner or operator provides the occupant with at least 10 days’ notice before the end of the initial term (and 20 days’ notice before the end of each subsequent term).
Rules of Storage
Most storage unit rental agreements include rules of storage that apply to all occupants. The rules usually address what items are prohibited from being stored in the space (such as hazardous materials, explosives, firearms, food items, illegal substances, live animals and pets, etc.). They also typically describe the unit repairs and maintenance that the owner is responsible for and the repairs and maintenance that the occupant is responsible for. If the space is only heated or air conditioned to the extent that it may prevent damage to the structure from freezing or heat conditions rather than for the comfort of the occupant, this should be stated in the lease. The agreement may also include some prohibitions on the rights of the occupant to use the space for anything but the storage of personal property.
Your Legal Duties and Liabilities
Your self storage rental agreement will specifically enumerate the legal obligations and responsibilities of both the storage facility and the renter for the storage unit. It will most likely also include a general disclaimer that the terms of the rental agreement are only part of the entire contract and that state laws will govern the enforcement or modification of the agreement.
Most self storage rental agreements will require that you purchase a specific amount of insurance before they will allow you to rent a unit. The self storage company most likely has its own policy that will cover their liability against any damage to the storage units. Your own insurance policy may or may not cover the contents of your storage unit so be careful to check with your insurance agent when deciding to purchase additional coverage from your storage company.
The door of the storage unit can be protected with a standard padlock or a special "disk lock" that is more expensive but will not allow the thief to use bolt cutters to get into your unit. Whether or not the company has changed the locks between renters is a matter of opinion, so it’s always best to change the lock upon move in.
It is standard practice for you to supply your own lock, however some companies will retain a key to your lock and it is cheap (around $5.) to have the lock cut off if you lose your key or forget the combination. It’s still a good idea to invest in an additional lock if the storage facility allows you to use 2 locks.
Most self storage rental agreements will state that you have 24 hour access to your belongings, some, however will restrict access or require that you work through the company’s office hours. This should also be stated in your rental agreement as well as what the fee is for late or early access. It is very common for there to be a late fee if you do not pay your monthly rental fee by the due date.
Many companies that rent out self storage units will encourage you to purchase renters insurance and this is because they do not carry insurance that covers your possessions and they will not be liable for any loss of your items while they are in storage.
Any questions that you may have about your rental agreement should be answered by the self storage company before you sign anything. They should allow you to take a copy of the agreement home and give you time to review it before you sign and return your copy. If they do not allow this, you should not sign the agreement but rather go find another self storage company that will take the time to answer your questions and provide you with a copy of the agreement to submit to your legal department or attorney for further review.
Common Storage Terms You Should Know
Default: All storage agreements will have a default provision. Default is defined as a failure to act, or an omission. It can be of any type that violates a contractual obligation. Parties use this term in a contract to define what actions or omissions by either party allows the other party to take some form of action.
Abandonment: Abandonment is a defense to landlord’s lien. A tenant abandons the property when he or she voluntarily relinquishes physical possession of their property. If a tenant abandons the property , the landlord may immediately take possession of the unit and sell the goods inside to pay for unpaid rent.
Lien: A lien is a right that gives a creditor temporary possession of a debtor’s property until the debt owed by the debtor has been discharged. This is a very common type of collateral. Liens are elsewhere known as "security interests" or "encumbrances." A landlord’s lien gives a landlord the right to possess the personal property in a rental unit to satisfy unpaid rent.
Termination: Termination occurs when an agreement is terminated in such a manner that the parties are discharged from all obligations to perform. This does not include requirements to act after termination of the agreement. The terms for the termination of the agreement are usually provided in the agreement itself, i.e. (insert time frame) after 30 days either party has the right to terminate this agreement.
How to Look Over and Negotiate a Storage Agreement
As with any other type of agreement, it is imperative to read the rental agreement prior to signing. The terms of a self storage agreement vary from contract to contract and unless written into the contract, the rental agreement does not include any terms not specified in it. It is equally important to read all clauses within the agreement, especially those that seem to contain standard language, as they may have been modified. As in all other areas of the law, if there is a question regarding the terms of an agreement, consult with a lawyer.
The following are some of the more common clauses which should be carefully reviewed before signing a rental agreement, as they vary from contract to contract and may be particularly one-sided:
Insurance Clause: Some rental agreements include an insurance clause requiring that the tenant maintain insurance on the contents of the storage unit and that the tenant repay the landlord for any losses suffered. Beware of these clauses, as they contain language which may shift the risk of any loss from the landlord onto the tenant. This shifts the risk of loss, which may not even be the tenant’s fault, from someone who pays a myriad of insurances for many different types of things each year, to someone who generally pays no insurance on the contents stored in a self-storage unit. Therefore, during negotiations (which should always be had) try to remove the insurance clause or, at the minimum, section (c).
If removed, the landlord generally will not be held responsible for any of the contents of your storage unit. However, most landlords are responsible for all or substantially all of the contents at the time of the explosion or fire. If the insurance clause is not removed from the contract, then you should at least have the right to purchase insurance from the landlord, who will likely charge you 1/12 of the premium each month in addition to your monthly rental payments.
Liability Provisions: You should negotiate all liability provisions in the agreement. The responsibility for storing and safeguarding your goods is yours and you should not be liable for any losses suffered by the landlord. In addition, you should not agree to indemnify the landlord for losses incurred or payment he must make to others as a result of the landlord’s negligence (or assumed), failure to follow the rental agreement, etc.
Force Majeure: If you absolutely cannot remove, revise or ignore this clause, you should at least attempt to limit its scope. If the clause does not contain the words "acts of God," you should try to add it, as this section has been found to be enforceable in many jurisdictions. Nonetheless, even though your activities in the damage or destruction of the unit may be covered under a force majeure clause, you should still review your insurance policy to ensure you are covered for anything you may do in sublimation of the damages. In addition, almost all self storage unit agreements state that self storage unit rates are subject to increase at the discretion of the landlord, so you should negotiate as low a rent as is possible, preferably the lowest that can be obtained.
Arbitration Clause: The vast majority of self storage unit agreements contain clauses requiring that all disputes between the parties be settled in a confidential arbitration proceeding. The intent of this provision is that if a dispute arises, a panel of arbitrators will resolve the issue, with very limited or no review of the matter by the court, no documented opinion, and no admission of liability on the part of the landlord. Therefore, if you believe that it is important to know the law in your state regarding rental agreements, you need to amend this section.
Storage Agreement Sample and Explanation
A sample storage rental agreement template can be an invaluable reference tool for self-storage owners looking to craft their own rental agreements. In the previous sections of this guide, we have already addressed the basic components of storage rental agreements as well as the legalities behind them, including the right and duty clauses and insurance. By applying these components to the self-storage rental agreement template we will be providing in this section, owners can develop a more clear understanding of how to customize their agreements.
The sample self-storage rental agreement template and explanations we provide in this section are not a substitute for professional legal advice or counsel. Owners should check with state law to ensure that they are abiding by the local regulations prior to implementing this template into their own agreements. Understanding the framework for a basic rental agreement can help guide owners on how to customize these templates. Once owners have a good overview of the framework, they will have to determine their own preferences for certain sections. The sample storage rental agreement template can also teach owners how to customize their rental agreements to suit their business practices .
Additionally, the self-storage rental agreement template provided in this section will help owners know when they may need to add custom clauses to their rental agreements. For example, if an owner wants to allow all tenants to get a lower rate for making long-term deposits, the clause should be added to the rental agreement so that the tenant does not assume this reduction in monthly payments is a standard business practice. When they agree to the terms of their specific rental agreement, they will realize that this reduced rate is only available because they paid in advance. They will now be less likely to challenge this change after the fact. Therefore, the self-storage rental agreement template provided in this section can help owners understand when they can customize their rental agreements and how to write these clauses so that they are legally binding.
Finally, this section provides owners with a variety of different self-storage rental agreement templates that they can use as examples of how to structure their own agreements. These agreement templates will not be perfectly suited to every state’s laws but should provide owners with a starting point for developing their own agreements.