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30 Jul 2019

What Implied Warranties Exist with Self Storage Units?

Scott Zucker

Founding Partner

Generally, with commercial transactions, the buyer is offered certain warranties that are considered inherent with every purchase. For example, if you were buying a refrigerator, there is an implied warranty of “merchantability” that suggests that the refrigerator will actually work. There is also an implied warranty of “fitness” which suggests that the product actually does what it is advertised to do.

Real estate transactions often offer different types of warranties. For example, if you were buying a home, you would have the right to an implied warranty of “habitability”, that the home you are purchasing can actually be lived in and is safe to occupy. There is also the implied warranty of “skillful construction” to support the belief that what you purchased was built in accordance with applicable codes and standards. These warranties especially apply when real estate is used for human occupancy.

But Applied to Self Storage?

But, in comparison to other types of real estate, the self storage landlord is able to establish, as part of its rental agreement, that in fact no “implied” warranties exist or are offered. The landlord is able to disclaim such warranties as part of the transaction since the spaces are to be used for the storage of property and not for habitation.

So, for example, most rental agreements will have some language to address the limited warranties that come with renting a self storage space. Some will initially provide that the “IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE and all other warranties, express or implied, ARE EXCLUDED from this transaction and shall not apply to the leased Space, premises, and Facility referred to herein”.

Others will contain direct disclaimers relating to the space including the clarification that no warranties are provided and especially that “the agents and employees of the Owner are not authorized or permitted to make any warranties about the Space, the Facility, or any facilities referred to in this Agreement. The Owner’s agents’ and employees’ ORAL STATEMENTS DO NOT CONSTITUTE WARRANTIES and shall not be relied upon by the Occupant.”

Lastly, most rental agreements will include specific language that the spaces are being rented “AS-IS” and specifically that no warranties exist as to the safety or security of the space or facility, including language such as “no promises or representations of safety or security have been made to Occupant by Owner or Owner’s agents. There shall be no liability to Owner, Owner’s employees or agents in the event alarm, video system or sprinkler system, or any components thereof, shall fail or malfunction. Any video recording devices are not monitored”.

As long as these disclaimers and limited warranties are conspicuous, or otherwise obvious to the tenant when executing the contract, they are generally upheld. In self storage the tenant is bound to the rental agreement as written, even if the agreement waives implied warranties which might otherwise be considered common and expected.