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09 Jun 2020

Is Contact-less Self Storage Legal?


Scott Zucker

Founding Partner

The self storage industry has always been a bit stuck in its ways. It took a while for operators to shift to automated gates and even online payments. The COVID-19 pandemic has now escalated and accelerated the reality that self-storage operators will need to adjust to the current marketplace to make their customers and employees feel safe when using their product.

Fortunately, there are a multitude of vendors in this industry that have been focused for years on the use of technology to make the business of self storage more user-friendly for the customer and more efficient for the operator. Now that same technology has allowed operators to continue to function through one of the most difficult times in our history. It has allowed facilities to stay open while meeting the safety and health protocols that have been imposed by both federal and state laws to protect facility employees and their tenants. Instead of there having to be person-to-person interactions for contract execution, move-ins, payments and even move outs, we have instead seen the utilization of available technology for kiosk or mobile reservations and contract executions, Bluetooth or remote gate and unit access, web-based or mobile payment processing and greater reliance on call center and on-line services. All of this "contact-less" service has elevated the self storage experience to be quicker, safer and easier for all parties involved.

But is all of this legal? It seems like a funny question to ask after what we have seen in the past few weeks with these technological alternatives being implemented at facilities around the country. Are electronic contracts enforceable? Does the use of a Bluetooth locking system change the bailment status of an operator? There have been other questions regarding whether contracts can be entered without photo identification or whether credit card payments can be made without written authorization. Does the ADA require in-person alternatives for contracting? Are kiosks required to accept cash over credit cards? All of these questions seem to encompass the overall anxiety over whether all of these advancements and applications in the industry have outpaced the legal rights of the customer or the legal obligations of the landlord. Do these technological adaptations change the legal status of "self" in the self-storage relationship?

Fortunately, the answer is no. These advancements, in a time where concern over social distancing and person-to-person contract is heightened, have only demonstrated the unique nature of the self storage business. That it can essentially be a remotely managed process where the customer as "tenant" rents space from a party offering available real estate as the "owner". Never before has the simplicity of the business been demonstrated by the use of technology. Where the rental can occur virtually and the payment can be made electronically. Where access can be delivered remotely and the security be controlled distantly.

But at the same time, to avoid any risk of ambiguity or confusion with these changes, the easiest thing for a self storage operator to do to manage these adaptations to its business is to address these issues within the terms and conditions of its lease. An updated lease would clarify that the use of a Bluetooth lock does not change the non-bailment status of the owner. The lease would authorize that the owner can rely on the credit card information provided by the tenant. The lease would grant the owner the right to photo identification from the tenant in the future if not obtained at the time of contracting. Ultimately, and most importantly, the lease would acknowledge that the use of an electronic signature is equivalent to a written signature and that the owner can rely on the party's electronic signature to bind the customer to the terms and conditions expressed in the rental agreement. Essentially, all of the questions that flow from the shift in technology being used by operators as a result of the pandemic can be solved by revising the tenant's rental agreement. By adjusting the terms of the agreement, contact-less storage can be the easy solution in the midst of troubling times.

Should you have any questions on operating your business during this unprecedented time, please do not hesitate to contact Weissmann Zucker Euster Morochnik & Garber P.C.

Thumbnail: Photo by James Sutton on Unsplash

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