What Is a Storage Unit Lease Agreement?
Storage unit lease agreements are contracts between a storage unit facility and an individual or business outlining the conditions under which the storage unit facility agrees to rent a storage unit to the individual or business. Storage unit facilities often have standard form lease agreements that are used with little to no negotiation, unless the organization is a consumer in a state or jurisdiction that has specific laws related to minimum standards for lease agreements.
While there can be specific variations in language from one leasing agreement to another , a typical storage unit lease agreement will contain the following basic forms: Storage unit lease agreements will also frequently contain limitations on the liability of the organization in the event of foreclosure or re-entry by the unit facility on the premises, insurance requirements to cover the stored items and requirements for payment to the facility in the event the individual or business is late on rental fees.
Keys Terms & Conditions of a Storage Lease
Most self-storage companies use a standard lease agreement or lease form that uses one of several variations or templates. The lease contract itself may be called the "Lease Agreement," the "Rental Agreement," the "Tenant’s Rental Agreement," the "Tenant’s Lease Agreement," or some other name.
While the actual storage unit lease forms may differ or be similar among the same or different storage businesses, most have common essential terms and conditions. These essential terms are fairly straightforward, although they should be read carefully to understand all provisions and enforceability, and to avoid misunderstanding or disputes.
Almost all self-storage leases have a provision that states how and when the tenant will pay monthly rent. Many self-storage business owners suggest that tenants pay by automatic debit from their checking account or monthly auto-pay using a credit card to avoid missed payments, tenant complaints, and administrative hassles associated with late fees, returned checks, collection costs, and lien sales for non-payment. Terms describing payment procedures should be read carefully to determine when payment is due and in what manner.
The duration or term of the lease is another fundamental term contained in most self-storage lease contracts. Often, the self-storage facility will use the term "month-to-month" and will describe that it does not contemplate a specific expiration date. However, the facility may reserve the right to terminate the lease for any reason with advance notice to the tenant, and in many cases these leases can be terminated for cause, such as the non-payment of rent or violation of the terms and conditions of the lease.
Most lease agreements include a provision that describes how and when the tenant may vacate the unit. Some require a minimum notice period, and some provide that if the tenant vacates the unit without providing the required notice, the tenant remains responsible for the monthly rent for the length of the notice period. Therefore, tenants should consider whether they want to reserve the right to terminate the lease with or without notice, and for what period of time.
The lease agreement will probably require the tenant to comply with the rules and regulations of the facility. These rules and regulations are often in addition to the lease itself, but may also be displayed on a large sign on the property. If not, ask a manager for a copy of the rules so they can be read carefully. The rules can be strictly enforced by the business owner or property manager, and generally may not be altered without consent of the manager. While rules can change, the lease term usually cannot, except under certain circumstances or by agreement.
Lessee Rights & Responsibilities
A storage unit lease agreement should clearly spell out the rights and responsibilities of the lessee. The first thing a lease should address is that the lessee is entitled to have secure access to the unit. It is increasingly common for modern storage units to offer 24-hour access, but a lessee may be required to request the code or key access from the owner.
Even a lessee with unrestricted access is responsible for maintaining the cleanliness of the unit and for storing his or her personal belongings securely. Any property that is lost or damaged while in a self-storage unit may not be covered under the unit owner’s insurance policy. An owner should have the option to sell the contents of a storage space if bills are not paid, but some states have laws preventing a sale from occurring until a notice is sent 30 days in advance.
Owners’ Legal Responsibility to Storage Facility Tenants
Owners of storage facilities owe legal obligations to the lessees who contract to store their property in the facility. For example, lessees rely upon the owners’ expertise to secure their property from loss or theft, and to maintain the property in a secure condition. Owners require lessees to pay rent in full and on time, but lessee compliance with the terms of the lease does not waive the owners’ duty to exercise reasonable care in the security and maintenance of their facilities. Owners typically disclaim liability for loss or damage to lessees’ stored items, thus allocating the risk among the parties.
Under California law, landlords of storage facilities owe a duty to lessees to use reasonable care to keep the areas common to all lessees safe. This duty applies to both the personal property stored in the facility and the leased space within the facility. In determining whether an owner has satisfied its duty of care, courts consider the risks involved in storing property at that location, the foreseeability of injury to others, the nature of the property stored, the type of business operated by the owner, the level of care taken by comparable facilities, the utility of the owner’s conduct weighed against the risks involved, and the relative safety of others . Specifically, courts consider the following in assigning fault:
• The condition of the property, i.e., the lay of the land
• The experience and expertise of the facility owner
• Whether common areas are fenced or lighted
• Whether the facility and its perimeters are monitored
• Whether the area surrounding the facility is accessible and open to the general public
Storage facility owners are also charged with the duty to protect their lessees’ stored property from loss or damage. Specifically, California law imposes a duty upon owners of storage facilities to exercise reasonable case to secure their lessees’ property. A facility owner violates its duty by failing to implement and man the security provisions it chooses to install, which is inferred from the fact that co-defendants — a facility owner and a security company employed to provide security services to the facility — had installed and staffed a security booth at the entrance to the facility.
Storage Issues & Dispute Solutions
As with any other rental agreement, disputes may arise between the lessee and facility owner as to whether the terms of the agreement have been met. Common issues between storage facility owners and their lessees include late payments and breach of contract.
Late payment is one of the more common causes of disputes. If a lessee fails to make payment on time, the facility owner may charge a late fee and/or attempt to collect the amount due (and any applicable late fees) from the lessee. Owners should review the specific provisions of a lessee’s lease agreement to determine what actions may be taken.
Aside from late fees, facility owners may have the right to place liens on the lessee’s property until amounts due are paid or to recover the costs of debt collection from the lessee, and potentially its legal fees as well.
Should there be a dispute, there are a number of ways for lessees and facility owners to resolve their differences without going to court. Mediation and binding arbitration are two methods that can provide both parties with valuable insight and, potentially, a resolution to their dispute.
Signing a Storage Unit Agreement: Tips
As you prepare to sign a storage lease agreement, be sure to follow these tips:
Understand the fine print. It’s essential that you review every word of your storage unit lease. Many times, owners or managers of self-storage facilities will seek to include terms that are designed to benefit the facility rather than the unit renter. Be on the lookout for maintenance and access fees, and any other charges that seem unreasonable. A storage unit should be reasonably priced for the items inside. Negotiating the price of a storage unit lease agreement is not uncommon, especially if you do so before you begin to move things into the unit . The more expensive the storage facility is, the more likely you will find yourself paying fees and charges to access or maintain your unit.
Close the deal on your terms. If you feel confident that you’ve gotten the best deal given your circumstances, finalize the terms of your storage unit lease agreement. Don’t be lulled into patience by someone who is trying to sell you a deal on a price that already seems too high. Take advantage of the specific needs you have in regard to your possessions by picking the right unit at the right price. Then it’s up to you to make smart choices about what to store and what not to store within the confines of your lease agreement terms.
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