Storage Rental Contracts: The Basics
A storage rental contract is a legally binding agreement between the landlord and the tenant that clearly states that the tenant has agreed to rent out a unit. It will describe the rent payable and for what period or until a cancellation notice is given. Storage contracts within the United States are generally accompanied by a set of rules and regulations such as security, use, and access. They also describe the lien process for the landlord in case of non-payment. It is important that these agreements be carefully read to ensure that you understand your rights and obligations as a tenant or storage unit owner .
Storage contracts generally include the following:
Precise description of the unit number
The amount of rent and due date
Security deposit information
How often the unit is accessible to you
Location of unit
Rules and regulations of facility
Terms of monthly, or long term lease
Lien process
Right to sell process
Maintenance of the unit
Restrictions on what can or can’t be stored
Landlord access to unit
Contract termination
Consequences of non-payment
Key Terms for a Storage Rental Agreement
When it comes to business storage, there are specific clauses that can make or break the deal for both parties. Essential clauses protect the owner of the storage unit by allowing them to state their terms in advance to prevent discrimination claims and limit how long owner/lessor employees are putting in overtime. For the business leasing the space, it’s necessary to take the time to read and understand the contract so that no unexpected fees or problems turn up. Have a conversation with your legal adviser before signing to ensure you’re covering all the bases and there won’t be any surprises down the line. There are many clauses that can be added to a contract, but when it comes to the essentials, the following are the most often used:
1. Payment Terms
The most basic clause of any contract is the payment terms. This outlines how you are to pay for the service and where the money goes.
2. Liability
Who is responsible for what? Who takes care of any damage to the unit? It’s important to establish how liability is divided as the rental agreement protects both the owner and the customer. Use this section to limit the owner’s liability. Some clauses that could be used are:
3. Termination
It’s always important to know how either party can terminate the agreement. You want to include how much notice needs to be given before termination, however you also don’t want to leave yourself open to being served with an irregular eviction notice. The easiest way to avoid this risk is by including a clause that states the minimum notice needed to terminate the agreement is the same as the current length of the agreement.
How to Personalize Your Storage Rental Contract Template
When it comes to storage rental, a one-size-fits-all approach often falls short of adequately addressing the unique needs of your rental property. That’s where the flexibility of storage rental contract templates comes into play. A generic template can be a useful starting point, but to truly protect your investment and meet the specific demands of your tenants, you’ll want to customize your contract.
Some key considerations when adapting a template to your own needs include:
Types of Contract. By default, most storage rental contract templates will cover basic rental agreements as well as property conditions and basic tenant expectations. However, there are many different types of contracts that may apply to your situation, including licensing agreements, commercial property leases, and others. Choose a template that covers the type of contract you are offering.
Property Rules. Be specific about what happens if damage occurs to the property or the storage units on the property. Does your tenant cover the cost of repairs or will they lose their deposit? Is there an extension of the lease in the event they need it? Make sure the template you choose incorporates the important details of your property’s rules and procedures.
Additional Fees. In addition to rent, does your property charge extra money for things like security deposits, late fees, insurance, etc. For each of these scenarios, set up a rule about how and when the fee will be charged. Will it be due at the signing of the contract, with the first month’s rent, or at a later date?
Tenant Responsibilities. Does the tenant need to dust and clean their unit periodically? While these details may be found on your property rules, make sure they also appear on your contract template as well for extra protection.
Bidirectional. While it’s important to communicate your expectations clearly, the contract should also be an opportunity for the tenant to understand their rights. You may want to offer a process for tenants to file requests for maintenance, terminate their lease, or reduce the amount of space they are leasing.
Tenants can be a source of controversy between property managers and investors big and small, and storage properties are no exception. The best way to protect everyone involved is to have a solid storage rental contract template that covers the major areas of concern – with a focus on customization to ensure that the template fits the needs and concerns of all parties.
Mistakes to Avoid
Intricate details and practical provisions may be lost in translation when a contract template is slightly changed or misread. The following are some of the most common pitfalls when it comes to storage rental contract templates, which can make an otherwise sound agreement, defective:
Level of Detail: Storage rental contracts contain clauses and provisions that are sometimes forgotten or overlooked. These include the deposit, terms of rental, and payment procedures. In fact, it is often these minor details that can become a source of conflict. Make sure that all such details are clearly stated and double-checked before they’re signed, as anything missing could turn into a costly legal dispute down the line.
Payment Terms: How often will you require payment? A rental agreement should clearly define payment periods (i.e. monthly, bi-monthly, quarterly, annually). Further, are late fees applicable? Penalties should be described in a separate section to avoid any potential misunderstanding.
Type of Goods: Not all storage rental units are applicable to all types of goods. Be sure to state what actually can and cannot be stored —whether that’s commercial documents, valuables, vintage vehicles, farm animals, etc. This will save you a nasty surprise down the line, should someone attempt to store prohibited goods and services .
Exclusions: What’s not covered in your agreement? Insurance? Shipping? Cleaning? Any costs that are not included in the price should be expressly stated in a separate clause in the contract.
Limiting Liability: Storage rental contracts tend to include liability limitations, but these clauses should be approached with caution. Along with limited liability, storage rental contracts also afford customers with limited rights to sue. From a customer service perspective, limiting liability might not seem like a smart move. However, clauses limiting liability are a necessary way to protect your property and business.
Surge in Demand: Customers can’t always be expected to give notice before they stop paying. And this may happen when someone loses their job or has an unexpected family emergency. Be sure your storage rental contract includes a clause for sudden demand surges that applies to both parties. If either party fails to meet the agreed terms, the owner can keep the stored goods until payment has been made, or the tenant can terminate the contract until the goods can be moved out.
Wording: Legal jargon can be confusing, even for those well-versed in law. When drafting your storage rental contract, ensure that the language used is easy to read to avoid confusion — and possibly costly consequences.
Legal Matters and Storage
A storage rental contract may be subject to a number of regulations governed under the laws of the state or other government entity where the rented unit is located. Storage rental owners should review local regulations that might not only make requirements for the contract, but also for signage at the storage business or disclosure requirements upon initiating a contract.
A lease or rental contract between a storage operator and a customer usually preserves the operator’s right of access to the space. This may include the right to enter the storage space if rent is overdue or if another term of the lease is broken by the customer. Such a clause, however, does not amount to a landlord lien. A landlord lien is the right to access a tenant’s belongings to satisfy an unpaid debt, which is a right created by law. The express agreement with a tenant allowing the landlord to access his or her possessions does not create a landlord lien, which imposes specific statutory requirements such as giving notice to the tenant.
The laws that govern the terms of contracts vary among the states. As a result, the process that must be followed in order to terminate a rental contract can differ significantly from jurisdiction to jurisdiction. Certain states follow the Uniform Commercial Code (UCC) for these transactions and procedures specific to storage rentals may vary depending on the state.
Some states also protect tenants’ rights in unique ways. For example, the state of Mississippi specifies under its state law that a tenant forfeits his or her property to the storage owner if he or she fails to pay rent for more than 30 days past the date that the rent was due and terminates the rental contract the first day the rent is overdue. In other states, the requirements for termination can be more onerous.
The basic premise of a contract is that it is always possible to make arrangements to terminate an agreement. As long as the parties agree, one can voluntarily terminate a rental agreement at any time. That said, both the landlord and the tenant are bound by their contracts according to their terms if the agreement is enforceable and was not drafted according to state law.
Storage FAQs
Storage rental contracts, like any other contract, can be complex. Some of the most frequently asked questions include:
How detailed should I make the rental contract?
While it might seem beneficial to offer a detailed rental contract, simply because something is legal does not mean it’s advised. Always keep your contracts as simple as possible. Overly detailed contracts can deter potential renters.
Are there privacy laws that impact storage rental contracts?
Yes. Make sure that you don’t ask for too much personal information in your contracts. In regards to credit and background checks, there are numerous federal laws, such as the Fair Credit Reporting Act, that must be followed if you use a credit or background check service.
What should I do if a renter refuses to sign the contract?
If a renter is unwilling to sign the storage rental contract, you should wonder why. Clearly explain the reasons that you require a rental contract , and try to explain that it is in both of your best interests to have a rental contract. If the renter is still unwilling to sign, it’s probably better to find someone else.
What needs to be in the contract, and what doesn’t?
Storage rental contracts may differ from transaction to transaction, so there are no set rules to what must be included in a storage rental contract and what may be left out. For example, how many months upfront a tenant is required to pay, whether or not the tenant is responsible for any damages, and other financial issues should all be included in the contract. Information about how rental agreements are renewed or changed may also be included in the contract. But, whether or not to include things like what amenities are provided, how clean the storage units should be left, or previous payment history are all issues that vary with each rental agreement.