Whenever you go into business you have to be concerned about the law, not necessarily that you might be involved in something illegal (hopefully), but that you may inadvertently violate someone’s rights. That would in turn open you up to a lawsuit that would not only prove costly in legal fees and restitution, but in potential or existing customers when word leaks of your ‘questionable’ business practices.
Some industries are more open to potentially liable situations than others and regretfully the self storage industry has a few potential situations that leave owners and managers open to lawsuits. The following are some of the more common legal issues that you may want to read up on if you are thinking about getting in to the self storage industry or already own or work at a self storage facility.
Be aware of the Servicemembers Civil Relief Act, Military personnel are common customers of self storage facilities. The Act requires them to inform you of that they are in fact in the service. If they don’t tell you or if they lie about it then you are protected under the statute.
Issues with this can be two-fold. On one hand, it is a federal law; violate it and you risk criminal proceedings. Once word breaks that you ‘accidentally’ sold a soldier’s belongings your self storage facility may never recover from the ensuing PR disaster.
Another common legal issue for self storage owners is bankruptcy, not theirs but that of their clients. With the economy being as it individual bankruptcies are at a high. If one of your tenants declared bankruptcy there are certain rights and protections that they are afforded under the law. If you continue to go about business as usual you may find yourself in violation of the law and facing legal ramifications.
Make sure that you stay aware of any potential changes in lien laws as well. Having to put a lien on someone’s belongings is something you don’t want to do but is a regrettable part of the business. If you do have to, you want to be especially sure that you do everything by the book lest you find yourself in violation of the law.
Along with liens comes the lien sale, another regrettable but necessary piece of the business. If you do find yourself getting to this point you definitely want to be absolutely certain that you do everything right. In the recent past there have been a number of cases where a self storage owner lost a wrongful sale case and it cost the owner anywhere from $50,000 to $4 million. Incidents from simply ignoring the law to technical violations that might have been missed on accident have been the cause of such losses.
Don’t let the lack of knowledge cost you dearly. Make sure that you keep yourself aware of the laws that affect the industry. A good place to start can be your state self storage association or the national self storage association. The Inside Self Storage World Expo in March will also have a number of informative and educational opportunities for self storage owners and operators.
Sources Used:
“Top 5 Legal Threats for All Self Storage Operators in 2011.” Inside Self Storage; 20 January 2011.
“Legal Learning Live.” Inside Self Storage World Expo; 15 Tuesday 2010.