What is a Storage Rental Lease Agreement?
A Storage Rental Lease Agreement is a legal document between a self-storage facility owner and a customer (a "tenant") for the rental of a unit at the facility and the rules which will apply to the rental of that unit. The Storage Rental Lease Agreement ultimately is a rental agreement for a space in which the tenant can store those items he or she owns and wishes to keep safe while still remaining physically close by for access to those items when necessary.
While the agreements can range from basic forms to more elaborate agreements with ownership completely laying out each and every aspect of the storage , they should generally include proper identification of the storage facility, location of the storage unit, relevant terms, and the responsibilities of the owner and tenant. This is the agreement which will govern your relationship with the self-storage facility owner and provide you with protection against lost or damaged property in your storage unit. This is also the agreement which will govern the storage facility owner and its obligations to you. It is therefore imperative that both the owner and the tenant carefully read and understand the Rental Agreement terms and conditions.
Important Elements of a Storage Lease
The key components of a storage rental lease typically include information such as the advertised rate, the promotion for which the rate is being offered, the term of the lease, and the permissible use of the space. Storage rental leases usually contain additional information about how much notice the customer must give before vacating the unit, how frequently payment must be made, the permitted methods of payment, the availability of sales and/or marketing tax, the availability of short-term rentals, the consequences for late payment, and whether the location will have the authority to access the unit and dispose of items after a certain period of time for non-payment.
However, one key component that many storage rental leases will not specifically address is default. A storage rental lease does not typically include lengthy default ramifications that fill multiple pages of text. Instead, most storage rental leases will state something like the following example. A Default shall have occurred if you fail to make a timely Spending Account payment, such as when we have not received such payment within five (5) days after it was due; or if you violate any of the rules of conduct; or if you fail to observe our security obligations; or if you default in the performance of any other obligation. We intend to enforce our rights in the event of a default. See our list of remedies below. If you fail to pay Rent in accordance with these provisions, we are permitted by law to declare the full amount of any additional Rent due, so that we are entitled to lock out your storage space and deny access to it, and/or change the locks or take possession of the items stored in the space. Further, on the 55th day following you placing your items in storage, we can get a court order to direct a sale of your items. We can keep or dispose of your items if, after the notice goes out, we are unable to sell them within forty-five (45) days of the date of the Notice. If we intend to sell your items, we will send you a notice of that intention which must be mailed at least thirty (30) days prior to the sale, by certified mail. During the forty-five (45) days, you will be charged a late fee of $15.00 for each month your envelope remains sealed.
Legal Rights and Responsibilities
The legal obligations and responsibilities of both the storage facility and the renter under a lease agreement can vary by location. In particular, the storage facility and the renter should be accustomed to the laws in their jurisdiction concerning their rights, responsibilities, and remedies for damages following a breach of lease agreement. Since lease agreements may bind the facility prior to the renter’s occupancy, a storage facility must be aware of how the law treats a potentially binding agreement with a third party. Issues that may arise include whether a lease agreement was formed before the renters’ acceptance of the lease terms and whether the storage facility has the ability to limit its liability for loss or damage.
Leases that impose certain limitations on liability including liability caps and limits to items stored, require that storage facilities give "clear and conspicuous notice," often by means of an agreement provision, of those limitations in writing. However, if the language making those limitations is not clear or unambiguously detailed, courts may not find the facility to be protected from liability, according to the law of the applicable jurisdiction.
In many states, it is understood that lessee may store items of value with the understanding that valuable items are not specifically insured. Often, the cost of insurance goes up for a lessee who would like to insure chattel and fine property. Some lease agreements offer the option to purchase storage insurance but purchasing insurance is almost always an option and not a requirement. Any insurance purchased typically covers losses for which the facility is not responsible and often requires that the lessee submit a proof of claim.
Common Terms and Conditions
Common terms and conditions included in lease agreements for storage rental units include:
Renewal Clause
A renewal clause is a mandatory provision of a rental agreement for a use of a property or unit in a self-service storage facility. It is the lessor’s way of obligating the lessee to renew the lease and pay the required renewal fees, even after the original lease term expires. The lease may be renewed for another year or until a termination notice is issued by the lessor, whichever comes first.
Late Fee
A late fee provision included in a rental agreement requires a lessee to pay a specified amount as a penalty for failing to pay rent on or before the due date. The penalty is usually described as a set dollar amount or a percentage of the monthly rent or cost of service. A rental agreement ordinarily states that a late fee will be assessed if the lease remains unpaid beyond a set number of days.
Termination
A termination provision defines the circumstances under which a lessor may terminate a lease. It may also contain a clause that enforces termination of a lease agreement whenever a lot or space leased to the tenant is subject to a foreclosure proceeding. There are two main types of lease termination provisions for storage rental units: a fixed-term lease and a periodic lease.
A fixed-term lease permits a tenant to use a rental unit for a predetermined period of time, usually with a fixed expiration date. A periodic lease enables the tenant to use a rental unit for a specific period, which is usually defined by the rental agreement. A lease is automatically renewed for the same period of time upon the expiration of the current lease term unless the lessee or lessor issues a notice of termination to the other party.
Negotiating a Storage Lease
The storage rental lease agreement is an important document that will protect you and the landlord. To ensure that your interests are protected, you should be familiar with lease agreement provisions and be willing to negotiate. Here are some strategies for negotiating the lease terms that fit your needs:
Price. In leasing situations where the price is not fixed, such as backyard storage and large self-storage spaces, negotiation is essential. That means knowing what the local fair market prices are and how those prices can be affected by the ease of access to the storage space or the amount of remaining storage space. Remember to be sure to account for price increases during the rental period.
Duration. Prospective tenants should consider carefully how long it will take to use the space and how frequently they will access the space. Many rental agreements set a minimum period of weeks or months for a lease . Consider whether the landlord is offering price breaks for longer leases and whether you will be willing to pay for that long of a period. If a customer only intends to store items for a short time, they may want to attempt to negotiate a shorter term.
Flexibility of Terms. Because individual situations vary widely, prospective tenants should attempt to tailor the terms of their rental agreement to meet their needs. For example, a customer who is leaving town for an extended period of time might want to negotiate special conditions to allow them to pay the rent in advance and cover any anticipated absences from town. Someone who anticipates relocating their personal items on frequently will want to make sure that the agreement allows them to move their items at a certain time (whether for a refund or not) and to terminate the agreement at that time.
Reading and Understanding a Storage Lease
Although the lease is important for both parties, the storage facility has a much better understanding of the lease than the customer. When a customer brings up an issue with the lease, they are more likely to have an immediate answer to any question the customer may have. As such, it is very important to keep the following tips in mind when reviewing the lease, or when questions arise after you have signed the lease:
Remember, the lease may contain additional information in other, less conspicuous areas. Remember to read any footnotes or comments if provided on a form lease.
When to Get Legal Advice
There are several situations in which it may be advisable to seek legal advice from a storage rental attorney. These include:
- You are a storage rental operator and need to hire a qualified attorney to draft an enforceable and comprehensive rental lease agreement or manage a legal dispute with an existing tenant.
- You are a storage tenant and there are provisions of your agreement you do not understand or that you intend to dispute.
- You are a tenant who is trying to vacate a unit without paying all of the accrued charges, but the property owner is requiring you to pay all charges or take other action to enforce their rights.
- You are an owner seeking to recover certain property charges or to avoid liability for damage to certain personal property.
- You are the owner of an abandoned unit and want to auction contents to satisfy repair charges, but there is a question about the amount of those charges and/or the value of the property.
- You are a buyer of storage property and must conduct an investigation into the seller’s past activity.
- You want to add online bill pay to your website but you have questions about the enforceability of agreements made online.
Storage Lease FAQs
Q: How long do I have to get out of my storage unit before foreclosure?
A: You have ten days to get out of the unit from the date of the foreclosure notice.
Q: Why do storage rental lease agreements have so many fees and add-ons?
A: Under the law, the facility owner may only charge you the rent due, late fees in some instances, and a fee for a bad check. The facility owner can charge you anything else only if you agree to it when you enter into the lease.
Q: Can I be charged for late fees after I surrender my unit?
A: No. Late fees accrue only while you are renting the space.
Q: Can storage facilities junk your property if you cannot pay for storage in time?
A: No. The facility must follow the steps described above for the foreclosure of stored property, and can only sell the property through a commercially reasonable sale.
Q: Once it is sold , can I still get my property back?
A: No. Once it is sold, it is sold. The sale of your property is instantaneous, and you cannot get it back.
Q: How much can they charge to foreclose on my property?
A: The non-judicial foreclosure process is not expensive. It may only cost the facility owner the costs of advertising and fees for online auctioneers.
Q: Will they ever go to court over the sale of my property?
A: No. The foreclosure and sale process is entirely non-judicial, meaning the facility owner and the tenant do not go to court at all.
Q: Can I get more money for my property than I owe to the facility owner?
A: Possibly. These sales are generally a slow process, and the longer the unit stays available to be sold the greater the chance the unit will sell for at or above the amount owed.