Legal

by Hunt & Hunt Lawyers Tony Raunic, Managing Principal, Elissa Raines, Lawyer and Helen Hodgins, Lawyer, with New Zealand comments from Jackson Russell Lawyers Darryl King, Partner and Katie Wright, Associate.

It is not uncommon for a member to encounter a Storer that wants to transfer their storage Agreement to another person (e.g. a friend, family member or spouse) (Assignee). Perhaps you have received such a request from one of your Storers.

The Storer may indicate that their rights to enter the storage Space will be transferred and all responsibilities to pay for the storage fees will also lie with this other person. Members should be aware that this kind of arrangement, known as an “assignment”, is expressly prohibited under clause 10(i) of the SSAA Standard Self Storage Agreement (clause 5(h) of the New Zealand Agreement) – and for good reason.

This article covers the position in Australia and New Zealand.

A signed Agreement establishes that the Storer has cited the terms of the Agreement and has agreed to be bound by them. In the case of an assignment, no such agreement will exist between the Facility and the Assignee. If a Storer wishes to transfer the Unit to an Assignee, they are only able to assign their rights under the Agreement, for instance, their right to use the Space. Any obligations of the Storer under the Agreement, i.e., any of the clauses aimed to protect the Facility, cannot be assigned. This creates problems for the Facility as the Facility is unable to enforce any of the obligations arising under the Agreement against the Assignee. For example, in the event that the Assignee defaults on payment, the Facility will not have the right to sell the Assignee’s goods under the Agreement. Similarly, if the Assignee causes damage to the storage Space or another person, the Facility cannot claim an indemnity from them. There is also the issue of access, as an assigning Storer may still have the ability to access the Space (i.e., if they still possess a key or know the keycode). This could create a headache for a Facility if a dispute arises between the Storer and the Assignee about who is legally entitled to enter the Space. This particular issue is perhaps most likely to arise where the Storer has attempted to assign to their spouse in the course of a separation. That’s not a situation any Facility wants to get caught in.

If a Storer wishes to assign their Agreement, you should inform them that this is not permitted under the Standard Self Storage Agreement. Instead, you should require that they terminate the Agreement and have the intended Assignee enter a new Agreement with the Facility as a new Storer. In doing this, the Facility must: l Ensure the outgoing Storer pays all outstanding fees and returns any keys to the Space upon termination; l Make it clear to the outgoing Storer that by terminating they no longer have the right to use and access the Space; l Require the new Storer to sign their own Standard Self Storage Agreement for the Space; and l Inform the new Storer of the terms and conditions of their storage arrangement with the Facility, just as you would with any other new Storer – don’t assume that they already know. Taking these steps will ensure that the Facility’s obligations towards the new Storer and outgoing Storer are kept distinct. Once a new Agreement is executed by the new Storer, the Facility can be assured that all terms of the Agreement will apply to the new Storer. So, in summary, one Space means one Agreement and a new Storer means a new Agreement.

The New Zealand position is the same as for Australia. A Facility may also wish to consider recommending that the new Storer secures the Space with their own padlock – to avoid any potential issue with the outgoing Storer accessing the Space. l