31 Oct 2022
Self-storage rental agreements are very clear that owners and operators do not assume bailment for the property being stored by their tenants at the storage facility and do not assume any “care, custody or control” over the stored property located in the rented spaces. A typical provision would include the following language:
No Bailment. THE OWNER IS NOT A WAREHOUSEMAN ENGAGED IN THE BUSINESS OF STORING GOODS FOR HIRE, AND NO BAILMENT IS CREATED BY THIS AGREEMENT. THE OWNER EXERCISES NEITHER CARE, CUSTODY, NOR CONTROL OVER THE OCCUPANT'S STORED PROPERTY. ALL PROPERTY STORED WITHIN THE SPACE OR ON THE PROPERTY BY THE OCCUPANT OR LOCATED AT THE FACILITY BY ANYONE SHALL BE STORED AT THE OCCUPANT'S SOLE RISK. The Occupant must take whatever steps he deems necessary to safeguard such property. The Owner and the Owner's employees and agents shall not be responsible or liable for any loss of or damage to any personal property stored in the Space or on the Property resulting from or arising out of the Occupant’s use of the Space or the Property from any cause whatsoever, including but not limited to, theft, mysterious disappearance, mold, mildew, vandalism, fire, smoke, water, flood, hurricanes, rain, tornadoes, explosions, rodents, insects, Acts of God, or the active or passive acts or omissions or negligence of the Owner, the Owner’s agents or employees.
If this is true, then what responsibility should a tenant have when they leave their stored property in a rented storage space? Should the burden on the tenant to care for its property be general or specific? Typically, the duties imposed on the tenant are general, meaning that the rental agreement shifts the overall risk of loss or damage to the stored goods to the tenant. But some operators have inquired whether they should make these obligations more specific, such as requiring their tenants to inspect their property on a regular basis.
This suggestion has been raised due to circumstances where a tenant chooses to leave their stored property in place for months (or years) at a time without ever returning to check on the status of their stored goods. Those tenants always seem surprised (and typically upset) if they discover after all that time the property has suffered damage from water intrusion, mildew or rodent infestation, a condition that could have been mitigated if the tenant ever took the time to visit their property on a periodic basis to verify its condition. If an operator elects to add such an inspection requirement on its tenant, its rental agreement should be updated to clarify the tenant’s duty of inspection. Language could be added to state “Tenant assumes an obligation to regularly inspect the contents of its rented Space and report any condition that may impact the condition of the stored property. Tenant is liable for the mitigation of any risk of loss or damage to its stored goods.”
Operators may elect to even go further with these “care” requirements, such as requiring how property is stored (in plastic containers) or where the property is stored (elevated from the finished floor or wall) so as to further reduce the risk of loss or damage. At the end of the day, clarifying the tenant’s duty of care to its stored property will only further lead to the protection of the stored goods and the minimization of damages should they occur.
This article was originally published in Self Storage Legal Monthly Minute by Scott Zucker, October 2022
Scott Zucker is a founding partner in the Atlanta law firm of Weissmann Zucker Euster Morochnik & Garber P.C. and has been practicing law since 1987. Scott represents self-storage owners and managers throughout the country on legal matters including property development, facility construction, lease preparation, employment policies and tenant claims defense. He also provides, on a consulting basis, advice to self-storage companies in the areas of foreclosure and lien sales, premises liability and loss control safeguards. Scott can be reached at 404-364-4626 or by e-mail at Scott@wzlegal.com
