Keeping Your Rental Agreements up to Date

By Carlos Kaslow

For those of us that have been in the self storage industry for a while, I think everyone would agree that it is not a typical real estate business. Although it is an investable asset deriving income from rentals, it is a business that is governed by state and federal laws and, as such, is constantly evolving and changing as those laws change. Not every real estate business has seen the legal changes to their industry like the self storage industry.

 Over the last five years there have been numerous changes to the state laws, particularly the portions of the laws that govern the operator’s rental agreement.  Consequently, the rental agreements that are governed by those laws have changed.  Operators who have not carefully updated their rental agreements over that time risk non-compliance and, worse, the risk of claims arising from the use of non-compliant operational documents. 

Even within the last year, multiple states have updated their state self storage laws. These changes have focused on termination rights for operators and the enforceability of unsigned rental agreements, among other issues.  Therefore, it is important for operators to keep their rental agreements “up-to-date” with these ever changing laws to avoid the risk of statutory violations and consumer claims. 

Staying up to date has really never been easier.  Education updates provided by the national Self Storage Association and its affiliated state associations offer operators an easy method of staying informed.  Membership in these associations or subscriber programs, like the Self Storage Legal Network, can offer access to online informational resources with notice of these statutory updates. Similarly, subscriptions to periodicals like Messenger, Inside Self Storage, SSA Magazine, or the Self Storage Legal Review can offer access to these updated laws. 

When an operator becomes aware of a change to a self storage lien law, they must determine if the change will necessitate updates to their rental agreement or lien procedures. Not all changes to the law will require a rental agreement update, but when your state changes the lien law, it may be a good time to review.  If the law requires changes, self storage operators may need to work with their lawyer to revise their rental agreement.  Storage Lease Now (StorageLeaseNow.com) updates its rental agreements each year based on legislative changes in state lien law.  

Beyond the law, it is equally important to stay up to date on the operational “best practices” that should be part of your lease preparation. Issues like consent for communication, tenant conduct, risk of mold/mildew, restrictions on use, and active-duty designations are equally important for operators to stay current on the best and strongest leases they can have for their business operations.