Somewhere along the way, most self-storage operators have developed a set of rules and regulations for their facility that is meant to work in addition to their lease agreement. These guidelines serve an important purpose, but many operators use them wrong way, i.e., to restate what is already in the lease. Also, many have not made the appropriate provisions in their lease to make the rules and regulations enforceable or easily modifiable.

A rule or regulation is an item necessary to the operation of the storage facility but which doesnt belong in the lease, either because its more of an administrative issue, its a less-significant item than a lease clause, or it requires more frequent modification than a lease. Rules and regulations should be enforceable but are not suitable as lease provisions. Examples of some items that might fall into this category include:

• Rules about the dumpster or disposal of trash. These are especially important in situations where you have clients sign a lease addendum and charge for use of the dumpster.
• Rules about cutting locks: how and when a manager will cut a lock and the applicable charge.
• Rules about the use of electricity on the premises.
• Need-to-know facts about access to the facility, such as tricks to opening the gate, exiting the site or alarm use.
• The speed limit for the property.
• Rules about parking during loading or unloading, for example, parallel parking to a building vs. backing up to the building.
• Rules about smoking on the premises.
• Rules about truck access to the facility.
• Rules about how items are stored in the property, for example, requiring plastic covers for mattresses to prevent mold growth.

There are also items that should not be included in your rules and regulations, many of which are repetitions of things already addressed in the lease. For example, if the lease states when rent is due and how it is to be paid, you shouldnt include this as part of your rules and regulations. The reason is if there is even the slightest discrepancy between the lease provision and the rules sheet, and you find yourself in a legal entanglement with a tenant, the court will generally enforce the more forgiving of the two options.

There are other rules/lease repetitions used by storage operators that create undesirable ambiguity. Some examples are:

• Procedures for notifying the operator about changes of address
• The term of the rental
• When the operator can change the rent amount or other terms of the lease
• Issues regarding termination of the lease
• Charges and fees the operator may collect, including late fees, lock-cutting fees, overlock charges, administrative fees and notice fees
• Provisions regarding what occurs in the event of a default
• Provisions regarding the use of the unit and the operators right to enter

Many of these items comprise the meat and potatoes of the lease agreement and do not often change. They belong in the lease only, clearly defined with all the information a tenant might need to understand the provisions. If you think youre covering your bases by repeating terms from your lease in your rules and regulations, think again. What youre doing is opening the door to customer confusion and legal uncertainty.

If you feel its absolutely necessary to reiterate certain items for emphasis, create a separate summary of important lease points. This is not part of the lease agreement or rules and regulations, just a separate sheet with highlights for clarification. Personally, Im not a big fan of such summaries. Some tenants will actually argue that if an item isnt addressed on the summary sheet, you havent placed sufficient importance on it, and it is therefore unenforceable. While this may be a difficult argument for the tenant to win in court, theres no point in setting yourself up for this situation. A simple verbal summary of the lease at the time of signing may be a safer solution to the problem.

Validation and Modification

Now that you have an understanding of what your rules and regulations should include, there are two common mistakes to avoid. The first is failure to incorporate the rules and regulations into the lease by reference. The second is failure to retain the right to easily modify rules and regulations. You should have a provision in your lease that states the rules and regulations are an actual part of the contract. The lease should also stipulate that you have the right to change rules and regulations at will. While you should consult your legal advisor before making any modifications to your lease, your provision might read:

The rules and regulations of the facility have been provided to the tenant and are incorporated herein by reference. Landlord may change any portion of this lease, including but not exclusively the rules and regulations, upon 30 days advance notice from Landlord to Tenant by mailing notice of the proposed changes to Tenant or posting the proposed changes at the entrance of the facility. Payment of your rent for the following period constitutes your acceptance of these changes.

Again, rules and regulations are generally modified more often than lease provisions. Making substantial changes to a lease, such as adding new clauses, instituting a whole new contract or deleting key portions, is a relatively large undertaking that may involve all customers signing a new agreement. Rules and regulations, however, can be more flexible. You should be able to change things such as gate hours, office hours, etc., without difficulty. When you modify rules and regulations, you can simply circulate a notice to tenants with your invoices or other mailings or post signs throughout the facility. One note here: If you circulate the notice with customer invoices, when a tenant pays his bill, acceptance of the change is implicit.

The next time you review your facility documentation, make sure your rules and regulations do not repeat your lease provisions, and that you have drawn the distinction between items that belong in the lease and day-to-day operational issues. Also ensure your rules and regulations are incorporated into the lease by reference so you have the grounds on which to enforce them, and you have left yourself the ability to modify the rules when necessary.

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. He 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 magazine. For more information, call 513.721.5151.

The Payment Advisor is a monthly Q&A column to which readers can submit questions about card transaction systems, electronic funds transfer, check acceptance and processing, wireless transactions, international funds transfer, and other payment issues. To participate, e-mail questions to [email protected] . Also watch for quarterly articles on related topics.

Q. Is there a difference between debit cards that are swiped and those that use a PIN (personal identification number)?

A.

Yes. All debit cards are linked to a checking or savings account. Debit cards that are swiped without use of a PIN are called off-line or signature-based cards. They work in the merchant environment the same as a credit card and are not required to be connected in real time to the cardholders account balance. Online or PIN-based debit cards require a PIN and the ability to connect to the live balance of the account holder.

Q. What does the term split-dial authorization mean?

A.

Split-dial authorization refers to a process that allows an authorization terminal, such as the one in a self-storage office, to dial directly to the various card processors for approval. It is commonly used with check-guarantee/check-verification services as well as most gift-card programs.

Q. Does a card approval guarantee I will receive payment?

A.

No. An approval response code from the card-issuing bank only allows a sale to be charged to the cardholders account. It does not guarantee payment, nor does it prevent a customer from challenging a charge or creating a charge back, in which the charge is reversed.

Ross Federgreen is a co-founder of CSRSI, which provides an integrated approach to the analysis, design, implementation, deployment and management of electronic transaction services and systems. Since 1999, the company has helped more than 350 public and private institutions reduce the cost of acquiring money and minimize the liability exposure related to payment transactions and customer data. For more information, call 866.462.7774, ext. 1; e-mail [email protected]; visit www.csrsi.com.

Step 1: Use productivity tools.

Theres a reason worker productivity in the United States has increased dramatically in the past decade: Companies started investing heavily in computers and software in the early to mid-'90s. Soon, they began to see an amazing increase in the efficiency of their employees, who found they could do more work in less time and with less effort, thereby saving money.

Business owners who havent already computerized their office functions should do so immediately. If youve already gone this route, make sure you have the best possible technology for the tasks at hand. Even a small increase in the usefulness of your tools can make a big difference in overall efficiency and productivity.

Step 2: Use standard technology.

Obviously, its critical to match the right technology to your business. Regardless of their pros and cons, the standard PC and Microsoft Windows operating system have become todays de facto business tools. Unless you have strong and specific reasons to spend more on other platforms (e.g., Macintosh, Sun/UNIX), save yourself a lot of headaches by sticking with the standard, too.

Step 3: Be software specific.

Tens of thousands of small software companies are dedicated to providing solutions tailored for specific industries. Self-storage alone has more than 30 software suppliers. When attempting to meet the needs of your facility, theres no more certain recipe for lost productivity, reduced efficiency and lost profitability than to use general business software. Numerous studies prove that trying to stretch generic software (Microsoft Excel, Access, etc.) beyond its traditional use does not work. Put simply, buy the right tool for the job. It will pay off quickly.

Step 4: Insist on easy-to-use software.

Choose a software program that is easy to use and a supplier that has managed to reduce implementation and startup time. Be wary of tools that offer so much functionality they will take weeks or months to learn. Software with a demanding learning curve will not only rob you of profits when first purchased, it will come back to hurt you every time you have to train a new employee.

Step 5: Demand flexible software.

Your business will grow, change and adapt to new market pressures. Your software needs the flexibility to keep up. What happens if you decrease the number or size of your units? What if you add another site to the business? Ask the questions now that will allow you to choose the software that suits you presently and in the future.

Step 6: Look for fair value.

The lowest priced software is not always the most economical. The most expensive software is not always the best or most powerful. It is usually smart to avoid either extreme and find a vendor who offers solid functionality and performance at a fair price.

Step 7: Choose a vendor who understands you.

Find a software vendor who understands your business and, most important, understands what your business is about: making money. Youre a businessperson, probably not a computer geek. So why would you want to buy your software from a supplier pushing fancy technology that has no real relevance to the task at hand? Your vendor should stay focused on what will work for your business. Savvy software shopping will put you on the right path to increasing your efficiency, productivity and profits.

John Rodrigues is part of Logon Express Inc., which designs software to increase the efficiency and productivity of self-storage owners and managers. The companys product, SAGE, comes in four editions with various features, and free trials are available. For more information, or to download a free demo, call 401.383.8959; visit www.logonexpress.com.

I grew up with Buck Rogers, Dick Tracy and a host of comic-book heroes. Yes, Im at that age when old dogs have to learn new tricks. Remember wrist radios, space ships, transporters and a lot of other imagined futuristic inventions? Who would have thought that many of those goodies would actually come to be? We are living in a time when information is available as fast as you can log on, dial up or say Jiminy Crickets.

Car-wash owners/operators are just seeing the benefits of all this technology. Now we can get credit reports, gather information on competition, do our banking, download industry data, visit car-wash chat rooms, and investigate and educate at the touch of a button. No longer are we making decisions purely on instinctnow we can get the facts. Facts are our friends, so use them wisely.

The Advent of Technology

My partners and I recently decided to purchase another car wash, using the Small Business Administration loan program for the project. No sooner had we typed www.sba.gov into our browser than we had all the information we needed regarding the requirements of a successful loan application. In addition, we found helpful hints on business plans, marketing plans, general accounting, and the types of business entities to consider when setting up a company. What we did in minutes might have taken weeks in the olden days.

Probably the greatest aid to business owners in the new era has been the advent of the PC and some really terrific software programs. It wasnt that long ago the majority of us considered financial reports to be one of the true mysteries of business. Sure, we all knew how to make ledger entries, mark down receipts and account for expenses. In general, we had a handle on our businesses; and when our bookkeeper turned our records over to our accountant, we (hopefully) learned how much or little we made. Of course, the challenge was taking corrective action, when necessary, in a timely fashion.

Thank goodness times have changed. The technology and information systems available today are terrific. For example, my partners and I are multi-site operators, and our car washes are a minimum of 35 miles apart. Its difficult to get to every site in a day, so we hired a firm that will enable us to oversee sales, security, labor, profit and loss, maintenance, inventory, customer service and much moreall via the Internet. We can even look at critical information on our PDA, cell phone or laptop. Its great to be actively engaged with our business at all times. Now we are armed with the facts that enable us to maximize our operations.

Time Is Money

The cost for these technological wonders isnt small; but cost happens once, and value is forever. In addition to keeping informed, we are now able to respond to any situation quickly. For example, when you apply for a loan, the bank asks for all the usual data, plus it wants to know how you oversee your business. You can now instantly produce current financialsand I dont mean from last month or last quarter, but current as of yesterday. Oh, and while youre at it, you show the bank via your phone what is going on with your business right now. You request an operations report, and zip! There it is. That clearly demonstrates how in touch you are with your business.

Banks are nervous when it comes to single-purpose buildings (i.e., car washes) and cash businesses. Show the bank the grasp you have on operations and cash management; mix that with your ability to produce quick, accurate financials; and go to the head of the class. Bankers and business partners want to know you are in control and knowledgeable. To whom would you loan money? The guys with up-to-date information or the group working off last quarters or last years numbers?

Armed With the Facts

Now that you have instant information and a good handle on day-to-day operations, what about top-line revenue or investments in equipment, chemicals or services? These days, many car-wash manufacturers offer software programs that track in uptime as well as provide a marketing venue. If youre getting ready to invest in new hardware, isnt it important to know the uptime and cost of the old equipment? You bet.

Now when you have that conversation with your supplier, youre armed with facts. You download all the service and uptime statistics, match this with invoices, initial cost and current value, and voila! You have an approximate cost of ownership. Its this kind of valuable management information that will allow the technology to pay for itself.

As to the marketing and sales systems available, there are lots of companies with clever solutions to about any challenge or desire. I suggest you use the web, do your initial screening, and then set up a time for providers to demonstrate how they can make your life simpler and more profitable by giving with the facts.

Fred Grauer is the vice president, distributor network, for MarkVII Equipment LLC, a car-wash equipment manufacturer in Arvada, Colo. He has made a lifelong career of designing, selling, building and operating car washes. He can be reached at [email protected].