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20 Apr 2022

Liability Issues Involving Mold

Scott Zucker

Founding Partner

Mold is a naturally occurring condition arising from moisture. In self-storage, that moisture can arise from a defect in the ventilation of the constructed space but could also arise from an unknown leak or even a tenant moving property into a storage space on a wet rainy day. There is no way to eliminate all mold or mold spores in an indoor environment. Therefore, the occurrence of mold in a self-storage space is not uncommon and tenants must be made aware of the risk of this condition prior to storage. Since a large percentage of tenant claims involve allegations of mold damage, operators must also address their liability limitations as part of their rental agreement.

Every rental agreement must clarify that the use of the space being rented carries a risk of loss or damage and that the operator is not a bailee of the stored property. Common lease language might read something like “OWNER IS NOT A WAREHOUSEMAN ENGAGED IN THE BUSINESS OF STORING GOODS FOR HIRE. OWNER SHALL HAVE NO OBLIGATION TO EXERCISE ANY CARE, CUSTODY OR CONTROL OVER OCCUPANT’S PERSONAL PROPERTY. OWNER ASSUMES NO RESPONSIBILITY FOR ANY LOSS, DAMAGE OR CASUALTY HOWEVER CAUSED TO SUCH PERSONAL PROPERTY.”

Additionally, rental agreements should provide a clear list of risks so as to avoid any claim of ambiguity. Common language might read “OCCUPANT RELEASES OWNER FROM ANY AND ALL LIABILITY FOR PERSONAL PROPERTY DAMAGE OR LOSS OF PERSONAL PROPERTY; FOR DAMAGE OR LOSS FROM, AS EXAMPLES, FIRE, WATER, THE ELEMENTS, MOLD OR MILDEW, ACTS OF GOD, THEFT, BURGLARY, VANDALISM, MALICIOUS MISCHIEF, MYSTERIOUS DISAPPEARANCE, AND RODENT OR VERMIN DAMAGE; OR THE ACTS OR FAILURE TO ACT OR NEGLIGENCE OF OWNER, ITS EMPLOYEES, OR AGENTS. Finally, if an operator is specifically concerned about the risk of mold claims, it might elect to add further language to its rental agreement to address that specific risk. This type of additional language might be helpful especially in older buildings where ventilation systems have not been modernized or with drive up units that are directly subject to impacts from weather. Common language might read “Occupant understands that there is a risk of the growth of mold and/or mildew on Occupant’s contents in the Space. Owner does not warrant the Space to be water-tight or dry. To help avoid the risk of mold, Owner recommends storing contents off the floor, such as on pallets or shelves, wrapping property in plastic and/or keeping goods away from the walls of the Space."

Again, self-storage is not immune from the natural occurrence of mold, just like a tenant’s basement, garage or attic is not immune from that condition. Therefore, an operator cannot guarantee, even in a “climate controlled” or “temperature controlled” space, that the property stored by its tenants will be free from the risk of mold. The law supports the shifting of the risk of such loss or damage to the tenant who controls its rented space. Accordingly, tenants should not only take precautions to protect their stored goods but be vigilant to inspect their stored property on a regular basis to insure that the property in the space is dry when stored and remains dry during its occupancy to avoid the possibility of mold damage.

This article was originally published in Self Storage Legal Monthly Minute by Scott Zucker, April 2022