Self-storage contracts don’t have to be complicated. These legal documents are an important part of any self-storage agreement, so it's critical to understand what the common terms are and why you need them.
Why Storage Contracts Are Essential
Storage contracts are more than just the legalese. Storage unit contracts help reduce miscommunication and keep everyone involved safe legally. Essential contact information, term details, and more are always included, and it gives renters an easy way to access all of the information they need.
These legal requirements protect both you and the other parties involved in the agreement. By outlining the legal terms, owners can ensure that their facility is safe and that you’ll be protected in an event like a breach of contract or termination.
Basic Information You’ll Need to Include in Self-Storage Contracts
Beyond the specifics, there are some basic pieces of information you’ll need to collect when crafting your self-storage agreement. This includes:
- The property title (in this instance, the name of the facility)
- The parties involved in the agreement
- The lease term dates (start and end dates)
- Rental pricing
- Unit number(s) assigned and included in the agreement
- Who is responsible for utilities and service; traditional self-storage does not provide utilities, so make this clear to your tenant
There are also some standard clauses you’ll want to include, such as:
- Jury trial waiver
- Legal fee entitlement
- Unenforceability clause
- Adherence to federal, state, and local governing laws
- Statement of a legally binding agreement
You will need to include an Entire Agreement provision. These are also known as merger clauses because they state that all terms and conditions are within the agreement and have been “merged” into the contract document.
Another standard clause you’ll want to include is an as-is condition clause. This states that the unit is being received in the same condition as it was shown when sold. An as-is clause can also include if the tenant has the right to modify the storage unit or not. Traditional self-storage does not allow modification of the unit in any way.
8 Line Items to Include in a Self-Storage Contract
Every storage contract will be a bit different depending on your state laws. However, no matter where you are located, there are a few items you should include in your storage agreement. When creating a storage unit contract, the line items you add are meant to protect yourself, the unit, and the customer. Beyond listing out what the rent costs are, here are seven specific line items that you should include in your self-storage contracts.
State Statutes & Lien Laws
The most important aspect of a self-storage lease is that it complies with the statutes of the state in which the facility is located. If your lease agreement does not comply with the state statutes, you do not have an enforceable lien to foreclose on so you can auction the contents and then rent the space to a rent-paying tenant.
Most state statutes require the statement that stored property is subject to a claim of lien. They also state the property can be sold if rent is not paid after a certain amount of days. The time frame is set by state law. We recommend working with an attorney who is a self-storage legal expert and your state self-storage association. Many state associations have a state-specific lease contract you can purchase.
Local Criminal Trespass Statute
Leases should explicitly state that the tenant agrees that units are not to be used for residential purposes. Citing the local criminal trespass statute in the lease helps enforce against residential use of self-storage space.
Legally include prohibited items in your storage unit contract. This is primarily for safety concerns; you can cap the value limits per unit as a safety precaution. This can include valuables like heirlooms, antiques, jewelry, money, important legal or financial documents, or other high-value goods. Most storage facilities also prohibit the storage of hazardous materials like toxic wastes, flammable liquids, and garbage. Make sure anything excluded from your tenant protection or insurance plan is also prohibited in your contract.
Your self-storage rental agreement should outline the expectations for payment. You should outline the expectations and terms for:
- Payment methods
- Payment due dates
- Grace periods
- Late fees
- How lease terms can be changed, including notice, which should be at least 30 days plus time for delivery
- Lien fees and when they'd be applicable
- Security deposits
- Lock fees
- New account fees
- Any additional fees
Most contracts are on a month-to-month basis. However, there may be special circumstances where this varies.
Termination & Abandonment Guidelines
Be sure to include the guidelines for the termination of the storage agreement. This includes:
- Ways the agreement can be terminated
- Collection proceedings
- What happens if items are left behind after a contract is terminated
- What happens if the unit is abandoned
- The time frame you are allowed to terminate the agreement
Your contract should indicate if the tenant is able to operate their business out of the unit or if it should strictly be for storage.
You should also include information about when you, as the operator of the facility, may access the tenant’s unit. You may need to enter a tenant’s rented unit to make repairs, perform planned maintenance, check on compliance with lease terms, and other issues, so these terms should be clearly outlined in your storage unit agreement.
Limit of Liability
There also needs to be a limit of liability clause in the lease, and the fact that no bailment is created (no care, custody, or control). The limitation of liability clause should make clear that no property valued above $5,000 may be stored.
You may also consider making an exception to that value limit via addendum, and you should ask for additional rent if you allow a higher value limit, and be sure to request proof of coverage or evidence of insurance for the full declared value of the stored property.
You should also have an indemnification provision, where the tenant agrees to indemnify and hold the self-storage facility harmless in the event of property loss, damage, or personal injury. Basically, if a third party is hurt in a tenant’s storage facility, then this protects you legally.
Tenant Protection or Insurance
It’s always good to encourage renters to seek tenant protection or insurance. This way, their possessions in the storage unit are protected and you won’t be held liable in the event of injury, damage, or loss. Again, we recommend working with an attorney who is a self-storage legal expert to make sure your lease language protects you and your tenants and complies with state statutes.
You should also include a clause that states tenants are storing their items at their own risk. If you are not providing measures like cameras or keypads, this also needs to be included in this clause of the self-storage contract.
Rules and Regulations
And finally, unless specifically required by your state law, your contract should state that office hours and access hours are included in your Rules and Regulations, which are included in the lease contract by reference.
Also, include a statement that Rules and Regulations may change from time to time. That way, if you need to change the office or gate access hours, you can change them in the Rules and Regulations, instead of having to revise the lease contract and bring tenants into a new version.
It is much simpler to change Rules and Regulations, post them on-site and on your website, and email them to tenants, effective immediately. Your Rules and Regulations should include anything pertaining to the use of the facility and rented spaces that are subject to change and are not required to be explicitly stated in the lease.
The Storelocal Difference
Storelocal is the self-storage industry’s only cooperative. Our exclusive co-op group comes with plenty of perks for business owners while allowing you to maintain your independence.
Our network of owners and operators increases profits, improves operations, and enhances the value of your assets by helping you compete against some of the biggest names in the storage industry. We also offer our own tenant protection program that is designed to help you keep more money in your pocket. Learn more about Storelocal membership today!