You don’t know what you don’t know. That’s how self storage mismanagement often happens.
Just as there are 5 things to keep your eyes on to build a great self storage business, there are 5 things not to do to keep that great business going.
The next five posts will be covering the top operational failures you need to avoid.
The first is not being aware of, and violating, SCRA. This can be the most painful failure to an owner because of the civil and criminal punishment potential.
What in the world is SCRA?
SCRA is The Servicemembers Civil Relief Act
The Servicemember’s Civil Relief Act (SCRA) expanded the former Soldiers’ and Sailors’ Civil Relief Act (SSCRA). The SCRA provides a wide range of protections for individuals entering the military, called to active duty, or deployed service members.
And yes, it totally affects self storage operators.
The purpose of SCRA is to ease legal and financial burdens on military personnel and their families brought on by the demands of active duty. In the words of the Act, the provisions were designed to allow service members to “devote their entire energy to the defense needs of the Nation.”
How does this affect you?
Well, you better not auction the contents of an active military person or the dependent of an active military person. You could face the wrath of a lawyer working on behalf of the service member, their family, and/or the Federal Government.
A “dependent” gets 51% or more of their support from the active military person – this is not just a box checked on a tax return.
Don’t make that mistake.
Don’t auction the unit rented by an active military person.
I have had to sit on units full of stuff I couldn’t auction. The tenant never responded. The secondary contacts never responded.
I know. It’s annoying. Your accounts receivable number gets higher. Your delinquency KPI is out of whack. But delinquency KPI is out of whack. But don’t dispose of or auction that unit!
It’s not worth it.
What can we do?
It starts with the lease. I was told by a lawyer to have this clause in the lease:
(NOTE – For you attorneys out there: I am not practicing law. I am just reporting what I have been told or what I have discovered over the years from research.) (Really).
“Is the occupant in, or a dependent of someone in, active duty, reserve duty, National Guard, or military service?”
If YES:
• Ask for the name and contact information of their commanding officer.
• Make sure you have their social security number (of course you always get this, right?).
• Flag them in your operating system as active military so others who work at the facility do not mistakenly start an auction lean sale on the unit.
• Flag the paper file so others who work at the facility do not mistakenly start an auction lean sale on the unit.
If you are ever unsure if a customer is in the active military, the Deptartment of Defense Manpower Center can support your search. You must have a social security number.
Note: Always get a social security number. If the customer doesn’t want to give it to you, don’t rent to them. It is that simple.
In order to empty the unit of an active military person, you need to obtain a court order. (Attorneys take note). There are times to get a lawyers help, and this is one of them. Have them get a court order for you. Don’t assume the responsibility for this alone. There is too much downside verses the cost of getting legal support (that’s my plug for the legal profession this month).
I know this isn’t the most inspiring or motivating episode I’ve ever written, but there is nothing inspiring about receiving a legal notice by certified mail either.
This is a potentially expensive mistake that is easy to avoid if you just have the information. Now you have some of the information. Take what I have suggested and go to your attorney (you do have one, right?) and ask them to redo or to review your contract.
You may be surprised next week by what I think the number 2 failure is – it’s one almost all of us do without even thinking.
