It seems like every day a new issue surfaces that impacts self-storage operations, legal compliance and potential business liability. In the last month, these three topics have been circulating and should be a consideration for every self-storage operator. The first is what it means to communicate with your tenants outside of regular business hours, the second is the potential risk of storing lithium and other potentially hazardous batteries in storage and the third is the growing pressure to impose rent control in self-storage.
There is a developing legal issue in Florida whereby the plaintiffs’ bar is pursuing cases against businesses that send out rent notices (invoices, late fees, lien notices) to tenants after posted business hours. Section 559.72(17) of the Florida Consumer Collection Practices Act (“FCCPA”) prohibits communications with a debtor between the hours 9:00 p.m. and 8:00 a.m. without the prior consent of the debtor. Recently, we have seen some lawsuits against self-storage operators for alleged violations of this section of the FCCPA for sending rent invoices to tenants via email between the hours of 9:00 p.m. and 8:00 a.m.
While we disagree with the application of this law against self-storage operators (self-storage operators and their managers are not debt collectors), until the courts have clarified the law, we would recommend that operators update their notice policies to avoid sending texts or e-mails to their tenants between 9:00 p.m. and 8:00 a.m. We would also recommend that operators update their rental agreements to include language under which the tenant consents to receive communications from the operators at any time. This language would be added to the already existing provisions in a standard rental agreement that permits the operator to call, text and e-mail its tenants.
Have you noticed the question from baggage handlers about storing any lithium batteries in your luggage on flights? Have you seen the reports of fires in homes and warehouses triggered by improper battery storage? Just recently, the press identified a self-storage facility fire in New York for which the culprit was stored e-bikes with lithium batteries. What is the risk? Apparently, improperly stored batteries can easily trigger fires. It is recommended that self-storage operators add lithium batteries to their list of prohibited items to be stored in self-storage rental units, especially non-climate units where excessive heat could impact the integrity of the battery and cause a fire. Many operators provide guidance to their customers about the risk of storing batteries in a self-storage unit, addressing concerns over leaks and fire risks. It could be important to begin highlighting these concerns as this fire risk widens.
One of the new focal points for consumer attacks against self-storage facilities is the alleged arbitrary increases in monthly self-storage rents. Although self-storage rental agreements are month-to-month contracts, subject to regular rent increases, renters are challenging the frequency and amount of these increases, notwithstanding the inflationary pressures that impact self-storage operators themselves. There have been recent legislative efforts, both in New York and Texas to impose limits on rents (akin to creating rent control in self-storage) impacting both the amount of permitted increases and the frequency of those increases. Legislators seem to forget that self-storage rental agreements are subject to termination without cause by the tenant at any time. If the price is higher than what the customer wants to pay, the customer is free to leave before the rent increase takes place. These proposed rate restrictions would disregard an operator’s increasing cost of doing business. But operators cannot ignore the ever-growing conversation about this issue. The legislative and legal oversight on this topic might create some hesitancy on the part of operators before they issue their next rent increase, even if the pressure of rising costs in their business operations is mounting.
This article was originally published in Self Storage Legal Monthly Minute by Scott Zucker, November 2023
Scott Zucker is a founding partner in the Atlanta law firm of Weissmann Zucker Euster Morochnik & Garber P.C. and has been practicing law since 1987. Scott represents self-storage owners and managers throughout the country on legal matters including property development, facility construction, lease preparation, employment policies and tenant claims defense. He also provides, on a consulting basis, advice to self-storage companies in the areas of foreclosure and lien sales, premises liability and loss control safeguards. Scott can be reached at 404-364-4626 or by e-mail at Scott@wzlegal.com.
