This is Week 3 of the Self Storage Mis-Management Series.
In this series, I’m covering the five things NOT to do to keep your self storage facility running smoothly.
In week 1 we covered the Serviceman’s Civil Relief Act. Last week we covered Creating a Bailment.
This week we’re going to cover the top two liability exposures a self storage operator has.
Do you know what Number 1 is?
If you said “Wrongful Disposition,” you would be correct.
What is Wrongful Disposition? That means you had an auction, did something wrong and now the customer can come at you legally and get a judgment.
This is why you ALWAYS need to make sure your insurance policy has a Wrongful Disposition coverage in it.
So what’s the number 1 way to be named in a “Wrongful Disposition” lawsuit?
Change of Last Address Without Proper Paperwork.
And it is so simple.
I know it sounds stupid, but from what I’ve seen, it’s the number one way a lawyer can use to get a claim of wrongful disposition.
Every state has their own lien laws, but what appears universal in them is an item about the “Change of Address Form”. The problem happens when the notice of auction is sent to an address other than the address on the original contract. If there is no Change of Address Form with the address the notice went to in the file, well, all kinds of fun things can happen.
Starting with the auction being invalidated.
Always get the Change of Address Form signed.
Of course, that presupposes you actually have a Change of Address Form. If you don’t have one, get one from your state or national association, or from your attorney. Fast!
Like all five items to not do in this series, this one is simple. But man does it open you up liability-wise and financially if not done right.
I am surprised how many people make this mistake. I am also surprised when we find this situation in my own organization as we do our facility audits and periodically go through the files.
So get the form, train everyone on how to use it, then use it. It’s that simple.
That is the number one way to avoid a lawsuit and the number one liability self storage owners and managers are exposed to.
The next “NEVER DO IT” item on the list is:
Giving Access To A Unit To Someone Other Than The Person On The Lease.
I know some of you are asking, “Why in the world would anyone ever do that?”
That tells me you’ve never actually run a facility.
If you have, you know that wives, husbands, boyfriends, girlfriends, partners ……the number of people is endless who show up and NEED, I mean they REALLY NEED to get in the unit or all kinds of bad things are going to happen.
And it usually makes perfect sense.
But the rule is: if they are not listed specifically in the contract as someone who can have access to the unit, and their name is not on the contract, then they should never be granted access.
If a husband doesn’t name his wife as someone who should have access to the unit, she doesn’t get in. Period.
Let him deal with her. There is usually a reason.
If a husband is not named on the contract, and not specifically named as someone with access to the unit; well you get it…
Even of the customer has died or gone to prison, if the person in your office is not named on the lease or a member to the contract, no access.
Know your states laws about what to do with a deceased customer. It happens more than you may think.
Usually you need a court produced Executor document, death certificate, etc. to give access to the unit to the Executor. So know your state’s laws on that issue before you run into the situation.
Many, many a lawsuit has been created, and many, many a settlement has been negotiated over this issue. And it is so simple to avoid.
Never, never, never let anyone other that a party to the contract, or someone who is specifically listed on the contract as someone who can have access, have access to the unit.
You do these simple things, you will create True Wealth, and have a rocking business in this fantastic self storage industry!
