Many operators treat vehicle storagewhether its cars, RVs or boatsas a regular self-storage transaction, and then wonder, Should I have a separate vehicle-storage lease? If I simply stick with my standard agreement, do I need any additions or special provisions to cover vehicle storage?
Whether you need a separate lease depends on your preferences. As for the second scenario, you absolutely want to add language to your existing lease for vehicle storage.
Additional provisions for vehicle storage will make your lease a lot longerso, if you dont want to bog down your standard-storage lease, consider a separate agreement or vehicle addendum. This is particularly true if you have numerous vehicles stored, especially expensive ones. On the other hand, you may want vehicle-storage language in the regular lease so it triggers a discussion between you and tenants planning to store cars or boats in conventional storage units.
Consider the following when creating a vehicle-storage agreement:
1. Vehicle Info
While you may never know the actual owner of a mattress stored in one of your units, you should know the owner of the vehicle and the names of anyone who has liens against it.
The lease should include all necessary information about the vehicle, including identification (VIN) or hull number, make, model, color and style. Youll also need insurance information such as the provider, policy holder, name and number of the agent. We ask our storage clients to require copies of the title, vehicle registration, insurance card or other documentation. The more info the merrier, and the safer youll be if something legal comes up.
2. Writing the Rules
Different rules and regulations exist for vehicle storage. For example, you probably want to control the appearance and condition of vehicles stored at your facility. You may require the vehicle to be operable, not stored on blocks, all tires inflated, no broken glass, minimal rust, current registration and state inspection. Youll also want rules about properly blocking and chocking tires, and the direction in which you want vehicles parkedfront or back end in first. Others to consider are gate entrance and exit times.
3. Waste Not
A provision should state that, while hazardous waste is generally prohibited at your property, youll allow vehicle-storage tenants to have a set amount of gasoline, oil and hydraulic fluid; a sanitary toilet; batteries; and brake and transmission fluid. The lease should indicate how vehicles are stored; if a pan must be used to retain fluids under potential leaking sources; what happens in the event of leak; whether full or partial tanks of gas and oil are permitted in stored vehicles; and winterization requirements.
4. Electricity
Many vehicles may need on-site electricity to maintain trickle chargers or other battery systems. Your lease should say if electricity is prohibited or allowed at the facility.
5. Dumping Services
Vehicle-storage tenants, especially RVers, often need a place to dump garbage, empty chemical toilets and so forth. Your lease must address whether your site will provide or allow for dumping of chemical toilets and trash, and the use of potable water at the facility.
6. Mechanic Work
How do you feel about people working on vehicles or changing fluids at your facility? Its bad enough to worry about leaks, but to know someone is intentionally unscrewing the plug in an oil pan is an environmental nightmare waiting to happen. Make sure your lease prevents mechanical work at your site.
7. Right of Removal
On occasion, you may need to remove a vehicle for any number of reasons: pavement repair, replacement, building painting, digging a trench, a truck needs to get through to the facility, or a government authority orders the vehicle moved because of unstable land. Make sure your lease grants you the right to move or remove vehicles in an emergency situation.
8. Breach of Lease
What happens if a rented parking space is unavailable because a tenant has accidentally parked in the wrong spot, parked over the line or inadvertently blocked access to the space? Disclaim these issues in your lease and provide a remedy so people dont demand rent deductions or scream about a breach of lease.
9. Absence Notification
Many storage operators also impose rules regarding notification of absence from the property. This requires people to check in and out if theyre away for a long period of time. Tenants benefit if a storage operator notices their vehicle is suddenly missing and can report it stolen to the owner or police.
Other times, a tenant may vacate the premises without notifying the manager, who may want to track him down for delinquent rent, or rent the space to a new customer.
10. Nontransferable Space
Make sure only vehicles registered on the lease are kept on the premises, otherwise you may be liable. Many tenants will leave other vehicles in their rented spaces when they take their RVs on the road.
This isnt necessarily a problem if you have vehicle and insurance information for all cars stored onsite. Make provision in your lease for disclosure of information about other vehicles left in the spot while the stored one is being used. You can also prohibit this practice completely if indicated on the agreement.
11. Stated Value
With some RVs valued at $500,000, your lease may need to be amended to address the higher value limits and conditions for allowing these vehicles to be stored at your facility. Again, always check that stored vehicles are properly insured so damage or loss occurring onsite is covered.
12. State Wise
Investigate your states statutes with regard to default. Some states allow you to remove a stored vehicle in default; however, you may be required to have certain signage posted. Make sure you have complied with requirements and your lease stipulates remedies in the event of a default.
Risky Business
Vehicle-storage leases can be radically different than those of regular self-storage. While many provisions will be appropriate for both, several addendums are necessary for vehicle storage. This abbreviated outline of considerations is a start, but operators should seek legal counsel to help create or revise a lease to cover the nuances of vehicle storage. It should never be an afterthought. Too much is at stake.
Jeffrey Greenberger practices with the law firm of Katz, Greenberger & Norton LLP in Cincinnati, which primarily represents owners and operators of commercial real estate, including self-storage. This article is for the purpose of providing general legal insight into the self-storage field and should not be substituted for the advice of your own attorney. Mr. Greenberger is licensed to practice in the states of Ohio and Kentucky, and is the legal counsel for the Ohio Self Storage Owners Society and the Kentucky Self Storage Association. He is a regular contributor to Inside Self-Storage and the tradeshows it sponsors. For more information, call 513.721.5151; e-mail [email protected]; or review Mr. Greenbergers legal opinions and insights into the industry, as well as an article archive, at his new website, www.selfstoragelegal.com.