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Four Property Wrongs of Self-Storage Law

Jeffrey D. Jones, Lewis & Clark Law School

Abstract

Self-storage leases are troubling. Under such leases, self-storage facility owners may freely dispose of defaulting tenants’ medical and tax records, family ashes, heirlooms, etc. in the same manner as they would treat fungible items such as chairs or a bookshelf. Facility owners are legally entitled to do so through facility-sponsored auctions, most of which are unrestricted by any duty to conduct commercially reasonable sales. Still worse, these legal self-storage practices have generated a clandestine culture of treasure-hunting that often leaves tenants—some of whom default due to medical emergencies, bankruptcy or who are homeless working poor—with little opportunity either to regain good standing or obtain fair market value for their belongings.

Legal suspicion of self-storage leases is not new. In the early 1980s, Professor Paul Brest questioned the constitutionality of state self-storage legislation authorizing the above practices. Professor Brest’s argument was that state statutes giving self-storage landlords the power of self-help—that is, the power to take and sell tenant property—was state action subject to the Due Process Clause of the United States Constitution. Brest’s reasoning was that the power to take property is an exclusive state power. Without state delegation of this power to self-storage landlords by statute, self-storage landlords would be limited to existing common law remedies for private creditors—mainly, obtaining a money judgment in court. Because state self-storage legislation ceded governmental power to self-storage landlords, and dramatically altered creditor-debtor relations in favor of creditors, such legislation must satisfy constitutional Due Process obligations.

Unfortunately, Professor Brest’s article was a reaction to Flagg Brothers v. Brooks, a Supreme Court case which held that state self-storage legislation in fact was not state action subject to the Due Process Clause of the United States Constitution. Although Justice Stevens’ dissent prefigured Professor Brest’s Due Process argument, Justice Rehnquist’s opinion for the majority stands undisturbed. Unconstitutionality is not the sole, or even the typical, characteristic of bad law, however. More often legal rules are bad as measured against the settled doctrines and policy rationales of the body of law of which the legal rules are supposed expressive. The Constitutional question raised by self-storage statutes concerns creditor-debtor relationships. But self-storage leases also create landlord-tenant relationships, and self-storage leases have yet to be measured against the common law of property.

This short article argues that the practices of the self-storage industry with regard to defaulting tenants violate well-established doctrines of U.S. property law. Part I reviews the standard terms of self-storage agreements and the remarkable imbalance of rights and duties between self-storage facility owners and tenants. Part II reveals four fundamental property wrongs occurring in self-storage law. First, the contractual allocation of risk and tenant restrictions on what may be stored commonly frustrate the purpose for which people rent self-storage units. Second, self-storage statutes severely limit or wholly eliminate tenant remedies under tort law and the law of bailments, in effect giving self-storage landlords an absolute right of negligence with respect to tenant property. Third, courts have missed that many of the public policy concerns that led to implied warranties in residential tenancies are present with regard to self-storage leases. Fourth, is the clandestine culture of treasure hunting that surrounds self-storage auctions. Part III evaluates possible legislative and judicial remedies, but also remedies growing out of a property ethic toward personal accumulation of things.

Suggested Citation

Jeffrey D. Jones. 2011. "Four Property Wrongs of Self-Storage Law" ExpressO
Available at: http://works.bepress.com/jeffrey_jones/4

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