Introduction to Self Storage Rental Agreements
A self storage rental agreement is a legally binding contract in which an individual or business rents space in a storage facility. It is signed between the rental provider and the individual or entity renting out the storage space. The entity that owns or manages the self-storage business is known as the "lessor" or "storage provider" and the individual or entity renting the storage unit or space is known as the "lessee", "tenant" or "renter" .
A self storage rental agreement legally establishes the terms of the lease between the parties, including details such as duration, fees, policies, and penalties for late payments. Agreements typically outline the basic terms of storage: the location, size, rent, duration, rights, insurance, liability, legalities, payment methods, and any default and termination clauses. Depending on state laws, storage rental agreements may also be known as lease agreements or self storage rental forms.
Foundational Provisions in a Self Storage Agreement
A self storage rental agreement should generally include the following types of clauses:
Payment Section. This section should specify the monthly rental amount and any additional fees, such as late fees, minimum payment periods, security deposits, and other costs.
Lease Duration. This section can be open-ended or have a fixed term. If it is open-ended, you may want to include an early termination clause or a renewal clause.
Access. This section should specify when the renter can access the space, such as only during normal business hours. You may also want to specify that the renter may have additional access upon request. Another issue to consider is allowing access during an emergency, such as an emergency repair of damage to the renter’s property as a result of a leak, for example.
Insurance Requirements. This is an important clause because it dictates whether you require the renter to obtain insurance. Requiring insurance can save you liability, but if you do, be sure to also require the renter to send you a certificate of that insurance.
Termination. This clause should address how the agreement may be terminated. Many states provide default termination rights, as well as specifying how much notice the parties must give each other before terminating.
Insight on Rent Terms and Fees
Self storage rental agreements commonly specify base monthly fees as a primary component of the consideration for the lease. Larger facilities may also charge fees for utilities, maintenance, or other services provided by the facility. Many self storage facilities will charge for rent on a month-to-month basis with payment due in advance, but some facilities may offer lower rates for longer terms (e.g. six months or a year). The lease may also include a grace period, prior to the assessment of late charges, and may specify a maximum late fee cap at one and a half times the average daily rental for delinquent days.
Some other common charges are:
Carefully review payment terms in the rental agreement and make sure to assess whether you need to increase base rental fees annually. Forms that do not provide for rent increases and don’t include any authorization for electronic credit approvals are a good checklist to use for drafting your own rental agreements.
Insurance and Liability Issues
Security measures are common in self storage agreements. Usually, there will be a clause that instructs the renter to set up their own burglar alarm on the items they plan to store, and another clause detailing the measures the storage facility has taken to secure the buildings and properties of the facility. The details of this clause can vary; it might include information about the security locks the renter must use to secure the unit, or the fact that the facility has security guards patrol the area, or the fact that cameras are installed across the facility.
Even with these measures in place, however, there is always a chance of theft or other concerns about security. For this reason, a limitation of liability clause is also typically included in a self storage rental agreement. This clause releases the storage facility from liability for any lost, stolen, or damaged items. It will follow that there is likely to be a provision for renters insurance, which mandates that the renter purchase insurance against loss or damage to their property.
Advice for Storage Rental Agreement Negotiations
"While storage can be an excellent choice for individuals or businesses both for short term and long term purposes, it is important to keep in mind that the terms and conditions of the storage rental agreement should be reviewed carefully.
When tipped in advance to terms that are non-negotiable, consumers may be more likely to focus on other aspects of the deal, but they should not overlook potentially problematic non-negotiable provisions. Nonetheless, the following are some practical tips for consumers seeking to negotiate the terms of a storage rental agreement:
1. DISTINGUISH BETWEEN APPLICABLE LAWS AND MARKET CONVENTIONS. While certain terms that may be offered in a storage rental agreement are required by state law (such as those relating to the lien process in Florida), other terms that seem non-negotiable may be mere market conventions. The Uniform Commercial Code section dealing with the sale of goods has been held to be inconsistent with many provisions contained in consumer storage agreements. Thus, without more, a consumer agreeing to such terms is not bound by them. Depending upon the jurisdiction, requirements (such as those relating to certain disclosures) may not apply to non-documentary transactions.
2. IDENTIFY UNFLINCHING NON-NEGOTIABLE PROVISIONS. While every storage facility is different and every customer is unique, there are nonetheless some clauses in a storage rental agreement that are likely to be non-negotiable. These frequently include the following: -Where site policies affect the consumer’s rights , such policies are frequently rolled into the rental agreement. One such right is the right to access the customer’s property. Where access is not unlimited under the terms of the rental agreement, a consumer should be extremely cautious in signing the agreement. -Undoubtedly the most important non-negotiable clause is the lien process. Since the consumer’s rights in his property are directly derived from the application of the lien statute, to accept anything less than the precise lien process prescribed by the statute is to risk losing the property through a breach of the rental agreement. Put simply, if a storage facility operator tries to include clauses in the rental agreement that defer or modify the lien process outlined in his state law (such as relating to a payment default), the consumer should not sign the rental agreement. No state law requires a consumer to provide more notice to remove his property than what is provided under the lien statute itself. Accordingly, the customer should not agree to other, additional notice provisions. -Provisions allowing for the self-service storage operator to enter the leased premises, property, or designated area should also be considered non-negotiable provisions. The right of entry is generally understood to be for a specific reason, and consumers should not accede to the right of storage facility personnel to enter for any reason. Also, it is very uncommon for storage facility operators to reserve the right or to routinely enter unaccompanied into a customer’s individual unit or space. This too should be avoided."
Common Pitfalls
Speed reading the agreement: Look for the most common issue, which we discussed above. Speed reading can lead to missing important details.
Not comparing agreements: Hustle and bustle in our busy lifestyles can sometimes put us in a situation where we fail to compare prospective storage facilities’ agreements properly. For instance, failing to consider that there could be price variations that influence your decision — whether the hourly rate is higher or lower may hinge on the overall size of the unit. Additionally, a quick comparison may leave you unaware of a specific cancellation notice time period or failure to pay a late fee.
Circumventing the agreement: Many tenants may think to themselves, "I’ll sign anything I want" when it comes to making usage of it happen under an agreement but that thought could be the reason why a tenant could become stuck within a contract he or she no longer wants — a contract can supersede anything verbalized between the tenant and manager at the facility. In these cases, to hedge such incidences one may want to prominently write "subject to approval" in the margin of the contract indicating the intent to have the manager’s approval thus voiding the clause limiting availability for deposit and first month rent.
Not consulting an attorney: Because property laws can be complicated, suppose the facility has broken the rules. Believing that all clauses in the contract are silently enforceable when they are not can lead one into thinking that because he or she has signed where indicated without reading closely what they are getting into, could mean that any virulent dispute may result in the facility manager ripping the contract up and sending you on your way simultaneously as opposed to taking such a matter to court and expecting a judge to rule in your favor.
Termination of a Storage Agreement
At the end of the rental period, or in the event you need to vacate your unit early, you must properly terminate your rental agreement. In many cases, self storage facilities, both owned and operated by a business, will require you to provide notice of cancellation of your agreement so that the facility can prepare to re-rent your unit. It is best to provide this notice in writing, even if your rental agreement does not specify that notice in writing is a requirement.
Third-party owned self storage facilities are generally regulated by state laws for storage units. Self storage facilities that are operated by an owner-occupied property such as a self store, are not subject to these statutory regulations.
Self Store Agreements
If you signed a self store agreement, you are obligated to provide notice, and your self store will likely have a designated form for you to complete. It is imperative that you follow the instructions exactly, especially when it comes to the date that your unit is to be vacated.
If you have a master key, remember that the self store will only accept that key at drop off. If you neglect to drop off the key, you will still be charged rental fees for the month following your vacate date . This is also the case when you fail to lock your lock properly, as it is considered your fault and not a failure of the storage facility management or security.
Self storage facilities should not allow you to cut your own key in order to prevent rust from forming on the cylinder. If facility management is unable to properly lock the door or reset the key lock, or if you have failed to provide any master keys or cancelled passes, your unit will continue to be locked until such time as your account is satisfied.
Failing to properly terminate your self store agreement will result in the following:
• You are still liable for rental payments until the unit is re-rented or you provide the facility with a doctor’s letter to support your claim for temporary load shifting
• You may be charged legal fees in order for the storage facility to enforce the terms of the contract against you
• Loss or loss of rental credit
It is important to understand that, if you have an agreement or contract, you are bound by its terms and conditions, and courts will uphold these terms.
Self storage rentals are already often affordable, so you want to avoid paying any unnecessary fees to cover your own negligence.