Can I Sue a Public Storage Facility?
Yes, you can sue a self-service storage facility, but you'll need a fair amount of creativity if you're going to win. Self-storage facilities have rental agreements that strictly limit their liability in case of a lawsuit, whether for bodily injury or property damage. But depending on your circumstances, you may be able to pursue a legal claim that isn't barred by the rental agreement if you can show they intentionally lost or destroyed your property or were grossly negligent.
Because the language of lease agreements is so one-sided, you will have a tough time beating a self-storage facility. A creative contracts lawyer in your corner would be a great asset. You may want to consider retaining a law firm that can give you legal advice within the context of an attorney-client relationship. They would be able to tell you if they think you could win.
Self-Storage Facilities Are Booming
There are nearly 50,000 self-storage facilities in the United States self-storage industry. More than 10% of U.S. households rent a storage unit, for an average of about $90 per month. They are a popular option if you can't fit all of your stuff into your home. They may also be your only option if you lose your home and need a place to store your personal property.
Some of the largest publicly traded self-storage operators by annual revenue are:
- Public Storage: $3.2 billion (2021)
- Extra Space Storage: $1.6 billion (2021)
- CubeSmart: $707 million (2021)
- Life Storage: $690 million (2021)
- U-Haul (a subsidiary of Amerco): $477 million (self-storage revenue only 2021)
Bad Things Can Happen With My Storage Unit
Suppose you're moving and you need to rent a storage space for your antiques, important documents, and family heirlooms. You go to a local self-service storage facility and sign a rental agreement for a heated unit without really looking it over. You don't bother to get renter's insurance, thinking you're not going to be using the unit long enough to justify it. You give them a credit card and let them deduct the fee automatically each month.
Things are going swell until you get an email from the facility saying that your unit “may" have been affected by a “water leak." Turns out your unit and several others were flooded when a pipe inside your unit froze and burst. It wasn't even that cold. Anyway, your stuff is ruined.
You're really mad, so you call a lawyer. The first thing they ask you is to see your rental agreement.
Your rental agreement will differ depending on the storage facility you're renting from. Its interpretation will be governed by your state's law. They will contain some, most, or all of the provisions discussed below.
But there's one thing common to all rental agreements: they were drafted by a lawyer for the storage facility. It wouldn't be surprising if your lawyer tells you that your agreement contains a number of terms that benefit the facility.
The first is a lien on your property. Most states have a statute called something like the Self-Service Storage Facility Act. Under these statutes, self storage companies have a lien — a property interest — on the property you store in the unit. If you fail to pay your rent, the storage facility generally has the right to hold your property and eventually sell it at a public auction.
Your rental agreement confirms this right granted by state law and spells out precisely what the facility owner can do if you fail to pay rent and it decides to exercise its right to sell your property. Lawyers call this process a lien sale or a foreclosure. A facility owner can keep the proceeds to cover the cost of rent, late fees, storage fees, and the costs of the sale.
But you have been up to date on your monthly rent, so you haven't broken (breached) the terms of the agreement. Your lawyer tells you not to worry about the lien issue for now.
Disclaimer of Warranties
Your agreement may contain something called a “disclaimer of warranties." Most rental agreements contain a provision that says you take the storage unit on an as-is basis, and that they make no warranties of any kind relating to the unit. What you see is what you get.
In fact, most rental agreements put the burden on you to take care of the unit. If you fail to do so, you may be responsible for the costs of putting it into the same condition it was when you rented it.
Release of liability
Most self-service storage rental agreements contain a release. A release means you give up your right to sue if the conditions of the release are met. Again, rental agreements are drafted by the storage facility's lawyers, so the release is extraordinarily broad. You generally give up the right to sue for any property damage or personal injury relating to your use and occupancy of the storage unit.
Your lawyer tells you that in your rental agreement, the disclaimer specifically states that the facility is not liable for any damage that may occur to your property, period. You tell your friend that that's not fair — the pipe wouldn't have frozen if the facility must have known that the pipes could freeze and failed to do what they should have to keep that from happening.
Your lawyer tells you to hold that thought for a moment. At this point they are just telling you about the obstacles you face if you decide to sue.
Next is indemnification. Most rental agreements contain a provision that says that if the storage facility gets sued for any reason associated with your use and occupancy of the unit, you agree to pay for their legal costs, any judgments against them, and (in many cases), their attorney's fees. This is called an indemnification provision.
You weren't storing anyone else's property in your unit, and no one was injured, so you don't see how this provision comes into play in your situation. Your lawyer tells you that you are probably right, unless the storage facility takes the position that as part of your responsibility to care for the unit, you should have made sure that the thermostat was turned up high enough to prevent the pipe from freezing. Theoretically, they could argue that you have to indemnify them if the renters of the other flooded units, who would be creditors, sue them.
Limitation on Recovery
That's not all. Most rental agreements contain a limitation on any potential recovery. For example, a rental agreement could say that in the event of any dispute with the storage facility, the most you can recover in any lawsuit is limited to a particular dollar amount.
Your lawyer tells you that your rental agreement specifically limits your recovery to $5,000. That would put you in small claims court.
Unfortunately, your family heirlooms, let alone the antiques, were worth a lot more than that. This is getting discouraging quickly.
Your lawyer asks you if you had any insurance on the unit. Most rental agreements specify that the storage facility does not maintain any insurance on your unit and that if you want insurance, you need to pay for it yourself. Some agreements actually require you to get renter's insurance on the unit.
Your friend wants to know if you have renter's insurance, because your agreement states that the storage facility doesn't and that it's your responsibility. If you do have insurance, they go on, you need to notify your insurance company of your potential claim as soon as possible.
Unfortunately, you didn't get insurance. You didn't think you were going to need the unit long enough to justify it.
Although your agreement doesn't contain an arbitration provision, your friend tells you that many rental agreements do. Arbitration is a legal process for resolving disputes out of court. You and the other side submit evidence and arguments to a neutral third party, who decides your dispute for you. Many believe arbitration is less expensive and more efficient than going to court.
Arbitration is a mixed bag. You lose the right to have a jury of your peers decide your dispute, and if you disagree with the arbitrator's decision, you generally cannot appeal it. Thankfully, because your rental agreement doesn't contain an arbitration provision, you don't have to deal with this challenge.
Potential Legal Claims
Right about now you are feeling pretty queezy. There's nothing you can do to get your property back, and now your lawyer is telling you that you can't even hold the storage facility responsible for your losses.
Your lawyer tells you that you shouldn't give up all hope. You may have little luck with a breach of contract suit, but there are at least two legal claims you may still be able to bring against the facility.
The first is for conversion. Conversion occurs when someone misuses or damages your physical personal items without your consent. They are said to “convert" your property to their own use.
Conversion is what's called an intentional tort. You rejoice when your lawyer tells you that you can't disclaim responsibility in a contract for intentional torts. What this means is that despite the language in the rental agreement, you would still be able to sue the facility for the conversion of your damaged antiques, documents, and heirlooms. You would still face an uphill battle because of other language in the rental agreement, but a conversion claim could help you get over the disclaimer hurdle.
The second claim you may be able to bring is for gross negligence. Negligence is generally the failure to use reasonable care under the circumstances. Gross negligence is defined differently depending on the state in which you live, but you can generally think of it as a willful or conscious indifference to the risks associated with conduct that causes harm. Again, you can't disclaim responsibility in a contract for gross negligence. You still have to deal with the other limitations of the rental agreement, but gross negligence could also get you past the disclaimers.
If You Want to Sue a Storage Facility, Speak With a Lawyer
You feel great relief when your lawyer tells you your lawsuit may have a chance. You won't get the property back, but you may be compensated for at least some of your losses. Besides, you feel the storage facility is responsible for the burst pipe and should have to pay for the damage, no matter what the rental agreement might say. Please remember that the above is a hypothetical situation and whether you have a legal claim with a chance of success will depend on the rental agreement, how your property was damaged, and other unique aspects of your situation.
As you can see, rental agreements strongly favor self-service storage facilities. So if you believe a storage facility is responsible for the loss of or damage to your property, you should consult an experienced contracts attorney. You may also want to speak to a personal injury attorney who could help you with conversion and gross negligence claims. Your lawyers can give you legal advice about your potential claim and give you some perspective on whether legal action is worth the hassle.
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