Legal Q&A: Abandoned Records, Break-In Disclosure, Increasing Tenant Rent, Re-Numbering Units and Employment Issues
by TSSA Legal Counsel
Abandoned Business Records
I have a tenant who is an attorney and has abandoned a unit full of boxes of legal documentation. Do we have to shred the documents to dispose of them?
Answer: According to the TSSA lease, a unit is only abandoned by a delinquent tenant if the unit contains “nothing of value to the ordinary person.” If there are filing cabinets or nice boxes that would have value, the unit is not abandoned. Abandonment is a case-by-case analysis. The tenant is the one who is violating the record disposal laws because these records are your tenant’s business records. So, if they contain sensitive personal information, he has a duty to dispose of them in compliance with state law. You might try calling or emailing the tenant’s office, reminding him of his legal duty to properly dispose of his own business records. If you ultimately must go to auction, however, it would be best in my opinion to have a third-party buyer purchase them at auction. It would make sense to make clear to buyers, ideally in a bidder agreement signed by the buyer, that the buyer is responsible for legally disposing of any records found in the unit that contain sensitive personal information, and that he must properly dispose of them in a responsible manner. If there are no buyers, probably the best alternative is for you to buy the records and ideally dispose of them carefully, by shredding, etc. Safeguarding duties for a business are limited to “business records.” In the statute, “business records” is a defined term, and it means records that are “recorded in the operation of a business.” You do not record (generate) your tenants’ business records in the operation of your business; you only record your own business records. So, you don’t have a duty to properly dispose of someone else’s business records. That being said, it would be preferable to shred these documents before disposing of them. I also recommend getting a security deposit, if possible, from tenants who will be storing nothing but documents, as their unit contents are normally not very valuable in a foreclosure sale. The security deposit can help with costs for an eviction or foreclosure, as well as costs associated with document disposal.
Disclosure of Break-ins
Question: When renting to a new tenant, if they ask if there has ever been a break-in on the property, are you required to tell them if there has been one?
Answer: The only requirement in this regard is “don’t lie.” You may reply, “We don’t keep those statistics.” You may reply, “I have never had a tenant report a break-in to me [if that is truthful].” Something along those lines is fine—it may be worth discussing with all employees what the company’s policy is on answering questions like this. TSSA lease paragraph 15 expressly provides that “Tenant is not relying on any oral or written representation, statement, or other assertion or omission made by Lessor or Lessor’s agents relating to the space and facility. Instead, Tenant is relying on Tenant’s own inspection and this written Rental Agreement.” Regardless, you certainly should never knowingly make a false representation. Bottom line: You make the call between “fess up” and “no comment,” or something in between.
Increasing Tenant Rent
Question: We are planning to raise our rental rates soon because they have not changed in the past few years. Is there a legal limit to the rate we can charge? Is it legal to charge different rates for different tenants?
Answer: There is no legal limit to the rate that you can charge as rent. It is a matter of contract—a matter of what the market will bear. As far as charging different rates for different tenants, you can certainly give discounts for students, senior citizens, long-term leases, long-standing clients, etc. In a nutshell it is legal to charge different rates for different tenants, but take care not to charge different rates on the basis of traits that are considered protected traits, such as race, ethnicity, religion or other matters of that nature.
Question: We purchased a facility and would like to re-number the units in a way that makes more sense. Are there any additional steps we need to take other than notifying tenants of their new unit number?
Answer: I would recommend that you use your rights under paragraph 30 of the TSSA lease to make an amendment to the lease. For example, the original lease might have listed the tenant’s unit number as unit 101. If you want to change the unit number to unit A-100 for example, you can mail your tenants (or email if your lease version is 2012 or later) a notice of the lease change. Your notice would notify a tenant, for example, that the unit number under the lease is changing from Unit 101 to Unit A-100. Under the TSSA lease, if the changes you are making do not affect dollar amounts and apply to all tenants, then you do not have to give a 30-day notice; the change is effective immediately upon the mailing or emailing (if allowed) of your notice. I recommend that you legally change the lease because if you ever need to foreclose, ideally you want to make sure that the unit number on which you are foreclosing is the unit number on the lease. Alternatively, you can fill out TSSA form MISC-7, Rental Agreement Amendment for Change in Unit/s, and have your tenant sign at the bottom. This will serve as an official amendment to your TSSA lease. You can find this form and many others in the Members Only section of the TSSA website.
Question: Do I need a lease with my onsite manager for her onsite apartment? What else can I do to keep from being burned by a bad employee?
Answer: A common shortfall in any business is the lack of vetting of employees, and lack of pro-active preparation for termination of problem employees. Many employers fail to utilize all the problem avoiding tools available to them, e.g. employment applications and employment pre-screening procedures.
If the employee lives on-site: When a self-storage facility employee lives on-site, the employer should require the employee to sign a rental agreement prior to moving into any on-site dwelling unit. It is recommended that you use the TSSA dwelling lease and appropriate addenda, available at no charge to TSSA members in the Members Only section of the TSSA website. A primary purpose of this lease is to make it clear in a binding contract that the employee’s right to live there is only for so long as he or she is an employee of the facility owner, or management company. The TSSA dwelling lease also contains a provision that enables management to quickly force a fired employee to move out. This clause also makes the employee liable for rent if he or she does not move out right away after termination.
Other employment-related tools: A good place to start is to read all the TSSA Goldbook© legal articles related to employment (see the latest Goldbook© “Legal Articles” tab).
The TSSA Goldbook, employment-related articles include:
- Why Use the TSSA Employment Application Forms?
- Is it Wise to Prescreen Prospective Employees for Criminal History and Honesty?
- Employment Disclosures and Consents Necessary Under the Federal Fair Credit Reporting Act
- The Importance of Drug-Free Workplace Policies
- Drug Abuse Policy (sample only)
- Checklist for Hiring and Firing Employees of a Self-Storage Facility
- Sample Letter for Firing an On-Site Manager
- Practical Solutions to Common Employment Problems
Using the TSSA employment application will help ensure that you are not asking questions that by law may not be asked. Review all the TSSA employment forms on the TSSA website (the forms beginning with the initials “EM”) to see which forms make sense for you to use in your business.
Some of the Available forms include:
- TSSA Employment Application
- TSSA Supplemental Employment Application [may be used if employer has 15 or fewer full-time employees]
- Employment Contract
- Manager’s Dwelling Lease
- Pet Addendum
- Security Deposit Deductions Addendum
- Inventory Condition Form
- Notice to Vacate Dwelling Because of Employment Termination
- Notice That Employment Has Been Disapproved
- Sample Letter for Firing an On-Site Employee
In sports, as well as in business, the best defense is a good offense. Be slow to hire, quick to fire. If you think an employee needs to go, that is almost always a sign that she needed to go six months ago. Trust your instincts. Try to always have a Plan B to fall back on so you can fire immediately if need be. Take the time to vet your prospective employees, and make sure you educate yourself enough to do it legally.
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