Legal Q&A: Stolen goods, Property Theft, Identity Theft, Search Warrants and More
by Connie Niemann Heyer, TSSA Legal Counsel
QUESTION 1: I sent a late notice to a tenant and he called and claimed that he did not have a storage unit with us but that his driver’s license had been stolen and that he would provide the facility name to the detective on the case. What steps do I need to take now?
ANSWER: Ask the “tenant” whose driver’s license was used for the name of the detective on the case. You should try to confirm that this tenant is not lying to you. You should also try to get a copy of this individual’s real signature and compare it to the signature on the lease (again, to determine if this person is lying to you). Regardless, you have the legal right (if you have a signed TSSA lease) to institute foreclosure proceedings. If the tenant doesn’t have a storage unit with you, then none of his items should be in the storage unit and he should not be concerned about foreclosure on the storage unit. I would recommend instituting the foreclosure process and proceeding with foreclosure unless you and this individual come to a different agreement after talking with the detective. Unless you can track down the real identity of the person who leased the unit from you, you are unlikely to get any compensation other than that which you recover at the foreclosure sale. If it is a case of identity theft, you obviously should not go after the theft victim for remaining amounts owed.
QUESTION 2: It has come to my attention that a tenant is storing stolen goods. The rightful owner would like to enter the unit and remove his property. He is willing to pay the back rent. Can I let him?
ANSWER: No. Legally, only the tenant and people whom the tenant authorized as having access rights may enter the unit. The only exceptions are (1) the police when exercising a search warrant or if they are in hot pursuit, and (2) your entry into the unit in accordance with paragraph 18 of the TSSA lease. If you would like to, you could cooperate with the rightful owner by giving him all the contact information for the tenant who you suspect is the thief, and you can also cooperate with law enforcement authorities by allowing them access if they present you with a search warrant. Since the particular unit is delinquent, you have the right to overlock it, and you could help the rightful owner by exercising the right to overlock the unit. Then you could proceed through the foreclosure process as quickly as legally possible, and the rightful owner could come bid on the property at the foreclosure sale. In the meantime, if the police come with a search warrant to see if the stolen property is in the unit, you must cooperate and there is a chance they will seize any stolen goods, especially if items have serial numbers or other easily distinguishable unique aspects.
QUESTION 3: One of my tenants had a trailer that was parked in a controlled access facility with a tongue lock on it. It was stolen three months ago. It has been recovered and we have found out that another tenant was the one who stole the trailer. Does my facility have any potential legal or financial liability to the tenant whose trailer was stolen, and can my facility press charges against the tenant who stole the trailer?
ANSWER: Your business should not have any liability for the theft of the trailer. The TSSA lease makes it clear that the facility is not responsible for losses due to theft or for any other reason. There may be an exception to this general rule of non-liability if the tenant could prove that you somehow violated the Deceptive Trade Practices Act by assuring the tenant that the facility was “secure” when in fact someone was able to steal the tenant’s things from it. This would be unusual but not unheard of, and hopefully this is not your situation.
As far as your facility’s ability to press charges against the tenant who stole the trailer, this tenant did not steal items belonging to you (unless you had already seized the trailer in a foreclosure situation, which does not appear to be the case). The only person who would have a cause of action is the person who owned the trailer. The thief was not trespassing on your property, most likely, as he was a tenant of your facility, and he had the right to come onto your property. The problem is that you’ll need to wait for the authorities to determine if indeed your tenant has broken the law. In the meantime, you can give this “thief” tenant, as you could any other tenant, 15 days’ notice of lease termination so that he will no longer be a tenant or have access to your facility. If he does not move out within 15 days, you may start the eviction process.
QUESTION 4: The FBI has contacted our facility and would like access to a tenant’s unit on suspicion of storage of drugs and drug-making substances. Is this considered an emergency access situation or must I require the FBI to get a search warrant?
ANSWER: In order to enter the space, you must satisfy one of the conditions of TSSA lease paragraph 18. In order to allow law enforcement authorities to enter a space, all conditions of TSSA lease paragraph 19 must be satisfied. One of the grounds for entry under paragraph 18 is that you have “reasonable grounds to believe that criminal activity is occurring in the space.” If the FBI has reasonable grounds to believe that criminal activity is occurring in the space, this is probably reasonable grounds for you to believe the same, and you could enter the space under the authority of paragraph 18 (3). However, this paragraph only gives permission for you to enter the space, it does not give permission for law enforcement officers to enter the space. Paragraph 19 of the lease governs access by law enforcement officers. It says that the lessor may open the space to a law enforcement officer “upon presentation of search warrant by a health or law officer.” So, in order to comply with the lease, you could not provide the FBI access without a search warrant. If the FBI comes to the property and asks you to provide access to the unit in the absence of a search warrant, this is a red flag. Any law enforcement officer should have a search warrant before inspecting any potential evidence. Any evidence found without a search warrant would not be admissible in court. I would recommend that you either 1) tell the FBI agent that under the terms of your lease you cannot let them in without a search warrant, and they should please return with a search warrant and you will be happy to provide them access to the space, or 2) if you are inclined to use your right to enter because you “reasonably suspect criminal activity is occurring,” at a minimum, make sure the FBI agents are who they say they are. (They could be impersonating FBI agents.) Contact headquarters, ask to see their badges, ask to photocopy their badges, etc. Ask them why they don’t have a search warrant. You must ultimately make a judgment call. If their story checks out, then you may choose to enter the unit yourself, look around, tell the FBI agents what you saw, and lock the unit back up and let them go get a search warrant before they come back and enter the unit. This is your prerogative, but a conservative and a “safer” approach would be for the FBI agents to have a search warrant and enter the unit themselves. You also asked whether this would be considered “emergency” access under paragraph 18 (2) of the TSSA lease. Under paragraph 18 (2) you are allowed to enter if you reasonably believe there is an emergency, including imminent danger or health hazard to persons or property because of fire, water damage, broken locks, faulty alarms, storage of animals, etc. It is questionable in my opinion whether suspected storage of drugs would qualify as an emergency, so I would not recommend that you use your right to enter in an emergency to enter on the suspicion of drugs. Lastly, don’t forget that anytime you enter under the permission given to you in paragraph 18 of the TSSA lease, you must notify the tenant by regular mail or phone of your entry. This is yet another reason to decline to enter yourself and have the FBI come back with a search warrant. You don’t want to tip off the tenant to any suspicion (which you might do when you send him the letter notifying him that you have entered the unit). He might move the drugs out or skip town before the FBI comes back with a search warrant.
It is a good idea during any auction to close off any payment lock box and direct people with a note to the physical (or online) auction site if they wish to pay/redeem. It is also a good idea to check the mail prior to any auction, and it sounds like you did.
QUESTION 5: We had started the foreclosure process and overlocked the delinquent tenant’s unit. We came back the next day and the tenant’s lock had been removed and all the items removed. We can tell from the gate access records that the tenant entered and most likely is the one who cut off our lock and removed the items. Can I report this to the police as a crime?
ANSWER: Someone has burglarized your facility, and although you have a pretty good idea who it is, law enforcement should treat this like any other burglary and investigate accordingly. Even though you now have no items to sell at a foreclosure sale, you can still try to recover amounts due from the tenant by suing her in small claims court and getting a judgment and asking the clerk to “abstract” the judgment (file it on record) and/or reporting her delinquent balance to a credit reporting agency. Although the police should treat this like any other burglary, and it seems fairly clear that the tenant has broken her own lock and stolen her own goods, the police often decline to get involved in this type of situation due to time/manpower constraints. Your only remedies in this situation would be through filing suit and/or reporting the balance due to a credit reporting agency. If the police tell you that you have no recourse since the goods were the tenant’s goods, remind them that you had taken possession of the goods with your overlock, you can show them Chapter 59, and that they were items in your possession—your collateral— that was stolen.
QUESTION 6: We have an identity theft situation. A man rented a unit and presented a driver’s license with one name on it (call it “John Doe”). A week later, the police showed up and advised us that John Doe was using a fake license and is really “Jim Smith.” So far, John Doe is not delinquent. The police want us to keep them posted if he shows up so they can arrest him. Should we cooperate, and what would become of the items in the unit (who would own them, and could we foreclose)?
ANSWER: You do not have a legal obligation to cooperate with the police unless they have a court order or a search warrant. However, TSSA legal counsel recommends that you cooperate with the police as much as reasonably possible. You have the legal right to cooperate with the police and show the police anything in your files. You do not have the right to allow the police entry into the unit unless the police have a search warrant or are in “hot pursuit.” If the police have a search warrant or are in hot pursuit, you may hand them the bolt cutters and let them gain entry themselves. As far as who owns the unit, the “real” tenant, who is apparently “Jim Smith” would be considered to be your tenant. But, you should carry out the foreclosure process by giving notice to “John Doe” (your named tenant) at the address he gave you, as is required by Chapter 59.
QUESTION 7: We have been repeatedly hit by vandals. They are systematically cutting disk locks as well as regular locks. They are also damaging the facility doors in their attempts to break in. We have called all of the tenants whose units have been vandalized to come in and verify what items are missing from their units, and they have told us nothing is missing. There have been approximately 35 out of 300 units “hit” so far. It appears the vandals are looking for something specific, but we don’t know what it is. We’ve hired a security night guard until we get cameras installed, and we are checking all entry and exit codes and have reported the vandalism to the police. We are instituting the process of screening all prospective tenants through criminal background checks and have refrained from leasing any new units until we get a handle on what is happening. Do you have any other suggestions or ideas that might be helpful?
ANSWER: From what you have said, in my opinion you have gone well beyond what would be reasonably expected of a facility in your situation in your attempt to curtail this. My only suggestion is related to plans that you have already made. With regard to video cameras, the lease states in paragraph 15 that video cameras “may be non-operational or unmonitored.” It is a good idea to have language like this to counter any tenant’s claim that they thought the cameras would be monitored at all times, or that the cameras guaranteed the safety of their unit. With regard to tenant background checks, I think this is an excellent idea. However, please be mindful that if you do perform a background check on a prospective or current tenant and decline to lease to him (or decline to renew his lease) due to the result of the background check, you must make the applicable disclosures under the Fair Credit Reporting Act. Please see the legal article titled “Background Checks on Tenants: What You Need to Know” behind the “Legal Articles” tab in the TSSA Goldbook© for more information.
QUESTION 8: We recently had a break-in and theft. Our cameras caught the thief in action and we turned this, along with other evidence, over to the police. However, to my knowledge the police have not pursued the case. Is there anything I can do to follow up and keep abreast of the investigation? The value was several thousand dollars, and I would like to motivate the police.
ANSWER: You may keep calling the officer who is assigned to the case (the officer who took the police report from you). The best advice is simply to be tenacious. If you are not getting the answer you want from that officer, ask him if there is someone else who is in charge of deciding whether to pursue the case, and talk to that person, and keep asking that same question until you get to someone who truly does have the decision-making authority with regard to pursuing or not pursuing a case. The police officer should refer you to someone in the district attorney’s or county attorney’s office. The police are not the governmental body responsible for prosecuting a case— that would be up to the district attorney or county attorney. If you have a hard time receiving further information from the police, I would next start calling the county attorney’s office and then the district attorney’s office and ask the person answering the phone how you can best follow up on what should be the prosecution of a theft.
QUESTION 9: I have overlocked a tenant who is behind in rent. I have deactivated his access code and also sent him a letter stating the amount that he owes is delinquent. A few days after I sent this letter, that unit was broken into and damaged. It very well could have been that tenant, but I would have a hard time proving it. I reported the break-in to the police, but am I responsible for informing the tenant of the break-in?
ANSWER: Under the TSSA lease you are clearly not responsible for theft or other damage to a tenant’s goods. In most circumstances you would, as a public relations measure if nothing else, inform a tenant when you have had a break-in that possibly involved the tenant’s unit. As a general rule, I recommend notifying your tenants of any break-in or attempted break-in. In every instance, however, it is a judgment call for you to make. You have the right to place a lock on any space that is discovered without a lock on it, and you have the right to charge the tenant a fee for placing this lock on the unlocked space. Since the unit is in overlock status, you do not need the tenant’s permission to enter. You have overlocked it and “seized” the unit already, and under paragraph 18 of the TSSA lease, you thus have permission to enter. You will need to do an inspection of the contents prior to foreclosing anyway, so you can replace the door and do the inspection at the same time. As is the case, any time you open a tenant’s unit, it is highly recommended that you have a witness there, and hopefully videotape the process so that the tenant cannot argue that anything disappeared when the unit was inspected (and the door was replaced, in this instance).
Read More Blog Posts »