Dealing with Disasters
Self-Service Procedures in the Wake of a Natural Disaster
By Connie Heyer, TSSA Legal Counsel
Hurricane Rita devastated many self-service storage facilities and other businesses in the bay area. There have been many questions about the proper procedures for cleaning up after a hurricane or other natural disaster and dealing with the tenants. This article will try to answer the most common questions.
How long should we wait before letting the tenants in to look for their things? The answer to this question depends on the extent of damage at the facility. If the facility has been so damaged that allowing tenants onto the facility would potentially be unsafe, I would recommend that you check with the police department or fire department for their recommendations, and follow their recommendations. If the police department or fire department have no recommendations, use your own judgment, but if there is the potential for harm (any potential for structural compromise), you should try and have all of the tenants sign a release prior to entry. At the very minimum, you should have a sign at the facility so when tenants who demand entry enter, they will see the sign. The sign should be very conspicuous and should say something like: “Danger, enter at your own risk. Due to Hurricane Rita, this facility has sustained extensive damage, including extensive potential structural damage. Hardhats are available in the office and you are encouraged to wear one.” I would recommend you have a supply of hardhats on hand for tenants to borrow. Also, photograph the sign in place and document the date it was posted.
How do we get the tenants out of our facility so that we can bulldoze the whole thing and rebuild? There are some units that are still usable and some that aren’t, but we want to bulldoze the whole thing. If the tenants in units that still exist will not leave voluntarily, you will need to use your right to give 15 days notice of lease termination. You have this right under Paragraph 9 of the TSSA Lease. You may use the sample form on page 80 of the TSSA Goldbook entitled “15 Day Notice of Termination of Storage Space Rental Agreement.” The TSSA Lease gives you the right to terminate upon 15 days notice for any reason or no reason. If the tenants do not vacate the premises at the end of this 15 day period, you will need to go through the eviction process. Or, if the tenant is delinquent in rent or other amounts due, you can go through the foreclosure process.
How should a facility handle delinquent tenants now that we don’t have any collateral due to the damage that Hurricane Rita caused? If tenants were delinquent prior to the hurricane and if there are any of their items left behind, you can go through the standard Chapter 59 foreclosure process. If there are no items left behind, or if what is left behind has been destroyed to the point of having no value, you may either sue the tenant in small claims court for the delinquent balance or, if you are using a recent version of the TSSA lease, turn the tenant over to a collection agency after giving the tenant 10 days notice as required by Paragraph 11 of the TSSA Lease. Check your lease to make sure your lease has this language, some of the older versions of the lease do not have this language. The last sentence of the first paragraph of Paragraph 11 in the latest TSSA lease version reads: “If you fail to pay all amounts due within 10 days after we mail you a notice demanding payment and stating that your account may be turned over to a collection agency, you must pay all collection agency fees.” A sample notice that you can send to the tenant to meet the 10 day requirement is enclosed in this legal update and will be in the next TSSA Goldbook. Once you verify that your lease contains this language and you send this 10 day notice and receive no response, you may turn the matter over to a collection agency who will collect the fees on your behalf, and the tenant will also be responsible for any charges the collection agency requires. For example, if the tenant owes you $500 and the collection agency charges you a 50% fee for collection, the tenant will then owe you $750.
How long must we wait for a tenant’s response before we can bulldoze? What I would recommend is if the tenant’s contents are still identifiable, (if the tenant’s unit still exists and it is feasible for the tenant to come and retrieve his things) give the tenant a 15 day notice of lease termination, or if you have the time to be more cordial, ask the tenant to come and retrieve his things by a certain date, and if the tenant does not respond, then give the tenant a 15 day notice of lease termination.) If in your judgment there is nothing that is potentially recoverable from the tenant’s space, then I would recommend sending the tenant a notice of abandonment informing him that his rent ceased to be owed as of the day of the hurricane, that all of the contents of his unit are either lost or damaged beyond any potential use, and informing him that within a certain number of days the contents will be deemed abandoned unless he comes to the facility and claims any contents that are his. A sample notice of abandonment for casualty loss such as hurricane Rita is also included in this legal update.
Regardless of what you do and how you contact your tenant, I would strongly recommend you video the site in as much detail as possible. This video will be your proof that items were damaged beyond any potential value.
Additionally, if you have items that are salvageable but you do not hear from the tenant after your communications are sent to the tenant, don’t forget that under Paragraph 18 of the TSSA Lease you have the right to relocate the contents of a unit if relocation is needed to protect the contents or space from loss or damage from casualty or theft. Presumably all security at your facilities has been compromised so theft is an issue. If this is your situation I would recommend relocating the contents to a more appropriate place. If you do relocate the contents, don’t forget that per Paragraph 18 of the TSSA Lease, the tenant is no longer liable for rent but is liable only for reasonable storage charges only. You must also promptly notify the tenant by regular mail or phone of any entry or relocation.
• TSSA Form: Emergency Post-Flooding Notice
• Notice Of Abandonment After Casualty
• Final Notice Before Collection Agency Fees Charged
• Small Business Administration Loan Application
• FEMA Flooding Advice