Originally posted in Tilting The Scales.

This fall’s Dallas tornado was especially vexing to Winn Blohn who stored many personal belongings in Sasha Stach’s Stach-a-Lot Self Storage unit. Sasha denied access to all the units for weeks. Can Sasha do that?

Legally

Yes. While the words “lease,” “license,” “rental agreement,” “contract” and “rent” are sometimes used interchangeably, a lease and a license are quite distinct under the law.

Simply put, a lease is a contract that conveys an exclusive possessory leasehold interest in real property. In a lease, a landlord gives the tenant the exclusive right to possess the property and, in some fashion, both parties agree to share the risk of damages, as from a tornado. Even more, Texas has codified many of the tenant’s rights even if they are not in the lease agreement. The related legal issues involving leases were addressed in the TiltingTheScales tornado blog six years ago.

On the other hand, a license is merely the privilege to act on another’s property. In a self storage rental agreement, the facility user contracts with the owner for the right to access and store personal property on the owner’s premises, and the owner assumes almost no responsibility or risk – no responsibility for water damages, burglary, access (possession) in an emergency or the like. There are no statutory rights to possession and use comparable to the landlord-tenant statutes. The contract contains all the rights and remedies – such as they are – between the facility owner and the facility user.

Despite what the paperwork might have been called, Winn had a license with Stach-a-Lot Self Storage. Under Texas law, calling an agreement either a lease or a license does not necessarily make it so – the Courts look to the character of the agreement itself and the intent of the parties.

Practically

Winn had a contract, not a lease. The stark contrast between an expected landlord-tenant relationship and the limitations of the storage space licenses became evident after the tornado. Unlike a typical lease, an occupant’s access to a storage facility is likely to be conditioned to give Sasha wide latitude to maintain order, including limiting hours of operation, requiring verification of Winn’s identity and inspecting vehicles that enter the storage facility. In the event of an emergency, typical self-storage language gives Sasha Stach the right to enter the storage space without notice to Winn, and “take such action as may be necessary or appropriate to protect the storage facility, to comply with applicable law or enforce Owner’s rights.” That’s what happened to Winn.

And, then there’s the rent. If you’ve read my partner Bill Drabble’s article on price gouging law in Texas, you may have been appalled. If that bothered you, check out what the facility owner can do after the lease term ends.

Because it’s a license subject to whatever terms the parties agree in their contract and because storage units are typically rented month to month, upon some short written notice to Winn (such as 15 days), Sasha probably has the right to change the monthly rent to whatever amount she wants – reasonable or otherwise. And, if the new rent, which becomes effective when the next date rent is due, is not timely paid, Sasha can exercise all rights of default under the license.

Tilting the Scales in Your Favor

Remember – A license is not a lease. If you choose to sign a self storage agreement, know that your legal rights against the owner. In the event of a natural disaster, like a tornado, consider how quickly you may need access to the storage unit, the value of the contents and if you have sufficient insurance for the contents. Know that you should expect little from the owner to protect your belongings and that access to your personal property may be unacceptably (but legally) delayed – and it might not all be there when you arrive.


SOURCE: Story by Cleve Clinton THUMBNAIL: By Ben Klea


View the original article.


Cleve Clinton

With a client list full of families navigating business and generational transitions, Fortune 500 companies and risk-taking mavericks who won’t take “no” for an answer, Cleve Clinton knows what it takes to develop creative solutions when big ideas result in big problems. Whether he’s serving as lead counsel in one of the growing number of fiduciary litigation claims within family businesses, advising a family in transition, or helping a developer sidestep a legal and public relations disaster in a new residential community, Cleve’s focus is always the same – understand and achieve the client’s goals, either in or out of the courtroom. His clients span nearly every industry, including beverage distribution, real estate, manufacturing, telecommunications and transportation. Many lawyers claim they can strike the perfect balance between legal strategy and a client’s practical goals, but Cleve demonstrates it every day. After 40 years of litigation practice, Cleve has learned one absolute truth – there’s no one-size-fits-all solution. His starting point with every client is to fully understand their motivations and concerns so he can mirror their judgment. When the initial legal answer won’t solve the problem or is too costly, he seeks practical solutions that reveal new legal paths that minimize both the financial and emotional impact. And most important – if it’s not simple, it’s not the best solution. Always putting his clients’ interests first, Cleve explores every resource available to ensure each case is in the right hands. It’s often as simple as making an introduction to another lawyer in the firm who can take the lead and achieve the ideal outcome. When a deal or controversy has a lot of moving parts and requires a multi-disciplinary approach, Cleve assembles a team of lawyers and other professionals with the perfectly-matched skill set – tax, employment, real estate, construction, regulatory plus more – and then quarterbacks strategic planning and tactical execution every step of the way. Cleve is dedicated to keeping clients informed about the latest legal and industry trends that impact their businesses. As a regular contributor on the firm’s blog, Tilting the Scales, he focuses on analyzing new and interesting business issues from a legal perspective.