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Monday, December 11, 2017
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Limitation of Value of Stored Property

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Limitation of Value of Stored Property

On December 17, 2014 an Illinois Circuit court judge ruled that a limitation of value provision in a container storage agreement violates public policy and was not enforceable. The judge’s ruling greatly expanded the mobile storage operator’s potential liability for damages. The events that lead to this ruling occurred in 2009. Fortunately for Illinois self storage operators a circuit court cannot never make such a ruling again. This is because on August 26, 2011 the following section was added to the Illinois Self-Service Storage Facility Act:

(770 ILCS 95/7.5) 
Limitation of value. If the rental agreement contains a limit on the value of property that may be stored in the occupant's space, this limit is deemed to be the maximum value of the stored property, provided that this limit provision must be printed in bold type or underlined in the rental agreement in order to be enforceable. In addition to the remedies otherwise provided by law, only the occupant listed on the last known rental agreement injured by a violation of this Act may bring a civil action to recover damages. 

This provision of the lien law states that the legislature has determined that a rental agreement provision that limits the value of property that a tenant may store shall be enforceable. The legislature require that the facility operator put the limitation in bold type or underlined but  if the rental agreement conforms to the statutory requirements of this section the limitation on value is enforceable. A circuit judge may no longer unilaterally rule that such a provision is violates public policy because the legislature has made the determination that it does not.

The action by the circuit court judge in this case and judges in other states is the reason that the Self Storage Association has included enacting code provisions like the one above as part of its lien law reform effort. Twenty-three states have enacted laws that specifically permit self storage operators to limit the value of the property a tenant may store in the rental agreement. As long as the rental agreement provision conforms to the state’s statutory requirements, the storage operator does not have to worry that a judge will simply rule that the provision is unenforceable.

The SSA is continuing its efforts to expand the number of states that have enacted laws similar to Illinois’ provision and five or six more states may adopt such a provision in the 2017/2018 legislative session. [A complete summary and analysis of this case will appear in the June/July issue of the Self Storage Legal Review]

| Categories: Legal, Legislative / Regulatory | Tags: Legislative, Legal, Lien, Rental Agreement, Value of Property | View Count: (728) | Return
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