What Am I Signing in Storage Contracts?
A brief guide to storage contracts and some of the terms and conditions you should be aware of.
When you are renting a self storage unit, you’ll be asked to sign a contract. Although this is a simple agreement, it is important that you understand what you are signing and the terms and conditions upon which you are taking the storage unit. This is a short guide to some of the more important points that you are signing up to.
The first point that the Agreement should set out are details of the parties to which the agreement applies. This will include the storage company and you or your company as the tenant. It will include the contact details for you and for the storage company. It will also set out when the contract starts.
Other information that it should include is the number of the storage unit, the monthly rent and any other charges that might be applicable. It should also set out the size and type of storage room you are renting. For example, an interior 10 x 10 climate-controlled unit, or a 20 x 8 outside unit.
The Agreement will set out the amount of rent that is due and when. It will also set out how this should be paid, i.e. by direct debit, credit card etc. It may not be a requirement for the customer to be invoiced but it will be their obligation to pay their storage rent on time.
What Can the Unit Be Used For?
The contract will set out the terms upon which you are renting the storage unit. It will also state what you can use the space for. This will be for the sole purpose of storage. It will be quite clear that you are not able to work from the unit or use it for any other use.
It may well also say which type of lock you have to secure your unit with. Certainly, with outdoor storage, there may be a requirement that you use a heavy-duty disc lock, which makes it harder for the units to be broken into. It will also state that it is your responsibility to ensure that the unit is always secure.
What is The Term of the Agreement?
With self storage, this is generally an ongoing agreement until you eventually serve notice and vacate the unit. This will be set out within the Agreement, for example, the contract may be month to month, but will roll into the next month unless the appropriate notice is served by either party.
The contract will set out the provisions for the Notice Period, for example, seven days written notice is required before the end of the month. It is important to understand how notice works for example; many storage contracts are month to month but may have two weeks’ notice. Therefore, you will need to serve notice at least two weeks before the end of the month, otherwise you may be liable for the following month’s rent.
It is also important to understand whether any refund is available to you if you have paid for a full month, or even longer on a prepaid deal, but vacate part way through that month. Some self storage businesses will offer refunds on unused periods. However, many will not. Therefore, if it is a month-to-month contract and you leave part way through the month then you will not be entitled to any kind of refund for that month.
In other cases, storage businesses charge on the anniversary date. This means that you are charged from the date you move in until that date the following month. I.e. from the 10th of the month to the 9th of the next month. This is important to know because if you are set up on a direct debit or auto pay on your credit card then this will be when the money is withdrawn from your account.
Another point to watch out for in the contract is the billing period. Some storage businesses will bill you monthly, and some will bill four weekly. If you are billed four weekly then this creates thirteen periods in the year, rather than twelve if billed monthly. The implications are that your payment date will change each month and you will pay for an extra period over a year. The rent may be adjusted to take this into account, but it is worth checking.
It will also set out the obligations that you will be subject to when you vacate. This may include leaving the unit clean and tidy and vacant, as well as ensuring the unit is left open when you have departed.
Another important point to be aware of is the insurance obligations set out in the contract. Often self storage businesses do not insure the contents of your unit. This will be the responsibility of the tenant to have the appropriate insurance in place. In many cases, the self storage business will provide an insurance policy that you can purchase to cover these liabilities. It may be that you already have this kind of cover on your home insurance policy. It is always worth checking. Also, these insurance policies are available by third-party insurers over the internet.
Generally, the contract will relinquish the operator’s responsibility to insure the actual goods being stored. This will very much sit with the tenant.
Release of Owners Liability
Many storage contracts will also release the owner/operator from any liability to the occupant. This will include for example loss or damage, injury or death caused to them or damage to their property as a result of the use and occupancy of space or storage facility. The contract will also make it clear that any goods stored on the property are done so at the occupant’s sole risk. It will state that the owner, their agents and employees will have no responsibility or liability for the loss or damage to the customer’s goods from any cause.
It will set out that the occupant acknowledges that the owner does not warrant or represent that the stored property will be safely kept, know that it will be secured against hazards such as rodents, insects, water, fire mould, mildew or the elements of weather or earthquake. Basically, the owner will relinquish all liability for you storing your goods at the facility.
Permitted and Prohibited Use of Space
The contract will also set out what is allowed and not allowed to happen within the space. It will say that the occupant agrees to use the space only for the storage of property that is owned by the occupant. It will normally state that the property is stored under the supervision and control of the occupant. The owner exercises neither care nor custody or control over the occupant’s stored property.
It should also state that the property stored will not be over a certain value without the prior consent of the owner. It may be that the owner withholds his consent, and this will be at his sole discretion.
Additional Rental Charges
The contract will set out any additional charges. This may include late fees for non-payment of rent or Lien Fees. If the rent is not paid for some time, the owner will then take possession of the goods in order to sell them to recover the debt.
Other fees may include cleaning fees if the unit is left in a poor state when you vacate.
Notice of Change of Address
It will be a requirement of the operator that you as the customer informs them of any change of address or contact details. This is particularly important if for whatever reason your storage rent is not paid. This will be the address where the Notices are sent. If you do not keep up to date with the correct address, then you may be unaware that for whatever reason the bill has not been paid. Eventually, this could lead to the sale of your goods.
The contract will also set out the conduct of any person in or entering the storage facility. It will state that the occupant of the unit shall be responsible for the conduct of any persons or organizations that enter the property or the storage unit with them or on their behalf. It should also say the storage company should be informed of anyone who has the authorization to enter the storage unit.
Condition of Space
The storage contract will also set out your obligations to keep the storage unit in good repair and that you will be responsible for any damage caused to the unit or any other part of the facility while you are on the premises. This will include anyone who is visiting the storage space on your behalf.
The contract will also set out the hours of access.
Owners Rights to Enter and Inspect
The contract will set out the owner’s rights to enter your storage unit and inspect. It will basically state that the owner has the right to enter your storage unit at any time. For example, if they suspect that unauthorized goods are being stored such as drugs, firearms etc.
They will also have the right to provide access to organizations such as the Police or any other authority that requests access.
The contract will set out that if the occupant is in any kind of default then the owner will have the right to terminate their contract. This may be for situations such as non-payment of rent or because they are causing a persistent disturbance affecting the facility. This may be, for example, leaving mess and rubbish or visiting the facility for non-storage purposes.
The contract will state that you are not allowed to assign your storage units to anyone else.
These are just a few of the clauses you may find in a storage contract. They will all be different and there are others not covered in this article. But as with any legal agreement, it is important you read and understand what you are signing. Normally all goes smoothly, but this is the document that will be referred to when things do not!