Spring 2019

IN THIS ISSUE:

Enforce Lease Requirements to Mitigate Risk

A basic element of your self-storage facility's risk management strategy is mitigating criminal and negligent activity on the premises that could result in costly claims and lawsuits. One of the most effective methods of implementing this strategy is by enforcing the rules spelled out in the lease and holding violators accountable. As the business owner, you must be committed to a policy of confronting tenants who are violating lease regulations pertaining to on-premises activities and be prepared to terminate an offending tenant’s lease if the activity continues.

The next step is to provide training for the managers who will be tasked with the day-to-day implementation. As the “eyes and ears” of your operation, managers need to be thoroughly trained on acceptable and unacceptable tenant behaviors since they are the ones who perform daily inspections of the premises and have regular interactions with tenants.

Well-trained and confident managers may be given the authority to intercede when they witness activity that violates the lease by confronting the tenant via a face-to-face conversation and advising that the activity be terminated. It should be noted that good judgment is required when approaching lease violators. Each situation is different, and, depending on the observed activity, a face-to-face interaction may not be the safest course of action. A third party may be required to intercede if criminal activity is involved, or an e-mail or letter may accomplish the objective for a lesser violation. When open flames such as candles are observed being used in a unit, the tenant should be confronted immediately.

A well-executed policy of actively policing the facility premises may help to insulate your facility against potential losses from property damage, insurance claims and lawsuits. In addition, these efforts can weigh in the operation’s favor when it comes to insurance premiums and policy renewal decisions.

If you are interested in developing a training program for your managers, your attorney and insurance agent may provide valuable input and perspective on the lease terminology, legal considerations, and potential liability exposures. In addition, MiniCo’s website offers safety and loss control resources such as the MiniCo Safety Shorts video series. The “Tenant Safety Checklist” video illustrates a number of tenant behaviors that may violate lease regulations.