What is Self Storage

Those of us in the industry know what we do in self storage, and why it is not the same as traditional warehousing, but most legislators, the judiciary and ‘outside lawyers’ want to lump us in with traditional leasing or the long established warehousing industry. This causes flow on problems for us across a huge range of issues. Some are perhaps obvious – such as whether or not our right to sell up a defaulting storer falls within Uncollected or Warehousing legislation; who has the insurable interest in stored goods; and who has liability for loss of goods – but many are more opaque, such as whether or when we perfect possession of stored goods under the Personal Properties Securities Act; or whether we are responsible under Privacy and other laws for secure destruction (or lengthy ongoing storage) of medical files left behind by a defaulting storer.

These issues will not be definitively settled until there is either a legislative definition of self storage included in warehousing and/or uncollected goods legislation, or industry specific self storage legislation is drafted OR via a precedent setting judicial decision which clearly defines self storage.

ONLINE SIGN UP In this day and age it is ludicrous that the majority of storage agreements are still formed by way of paper contracts. Although there are many issues with regards to identifying the person who is storing and potential Competition and Consumer Act breaches (see below) when dealing with non-present potential storers (i.e. not actually in the facility) we must as an industry seek to establish safe online sign up processes.

As stated above, issues for online sign up – particularly when the Storer is not present at the facility – include

ensuring we clearly identify our storer. This is an issue for our industry for a number of reasons. Obviously, we want to know who our storer is for the purposes of ensuring we can bill them, enforce our contract against them and so forth, but more importantly we want to ensure we are not leaving our facility open to illegal activity – like drug manufacturing, storage of stolen goods etc – or risking the dumping of expensive-to-get-rid-of-items like mattresses, tyres, chemicals and items that require secure destruction, like medical and accounting files.

There are many products and services we could be exploring to make this aspect of our businesses more ‘modern’ and customer friendly.

WHAT ARE WE PROVIDING? WHEN MIGHT WE BREACH LEGISLATIVE ‘GUARANTEES’? In accordance with Australian Competition and Consumer Laws, goods and services are provided with a number of guarantees. Of most relevance to our industry is that goods and services must be fit for the purpose you hold them out to be fit for OR that they are fit for any purpose the consumer made known to you before supply. The position under New Zealand Consumer Laws is very similar, the main difference is that services need to be reasonably fit for any particular purpose, and of such a nature and quality that it can reasonably be expected to achieve any particular result, that the consumer made known to you before or at the time of supply.

Further, in Australia and New Zealand, services must be provided with reasonable care and skill. In Australia this extends to the supplier taking all necessary steps to avoid loss or damage. This means, at a minimum, it is likely that a ‘space’ provided to a storer for storage must be secure and usually weatherproof (but even these are dependent on the type of ‘space’ – see below).

But establishing the parameters of ‘purpose’ in the context of self storage is tricky. We are seeing an increasing trend with storers trying to make claims against Facilities that the space and service were not ‘fit for purpose’ when stored items are discovered to be ‘dusty’, or when plastic items (like kettles, inflatable beach toys and electrical cords) perish after years of storage in non-climate controlled spaces. When a Storer advises a facility that they will be storing for many years – for example, when they are relocating overseas for a lengthy period – do we have a duty to provide a space that has a stable, cooler temperature? Or what about when storing items like art? Or perishables? Do we have a duty here?

Much of the confusion arises because the industry is still relatively young and the general public have limited

understanding about the different standards and quality within the industry. Most storers may not know that ‘spaces’ can be everything from a leaky shipping container to a climate controlled room – and everything in between. To protect themselves facilities should be educating storers about the differences in their space offering. Outdoor cages or any other space that is ‘use specific’ should have their limitations clearly pointed out (only suitable for securing outdoor furniture or machinery, for example). Where a facility has some alarmed and some non-alarmed units, the differences should be clearly made to the storer.

Most importantly, storers need to be provided with the opportunity to look at the actual space they will be renting, or better still, be shown several spaces from which the

Facilities must really work at ensuring storers understand that the ‘product’ of self storage is a lockable space and engage in vigorously educating the Storer as to what your facility can (and can’t) offer.