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Saturday, June 15, 2024
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SSA Blog

©2024 by the Self Storage Association (SSA). SSA and SSA Magazine are trademarks of the Self Storage Association, Inc. Opinions expressed by authors and other contributors do not necessarily reflect those of the SSA, publisher or editors, nor do they represent the policy or positions of the SSA. Information contained within articles should not be construed as the primary basis for legal or investment decisions.


The Tenant Rental Dilemma

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The Tenant Rental Dilemma

The self storage industry has been a take-all-comers business since its inception. Self Storage operators do not typically run credit checks on their customers before renting a space and require minimum identification. One reason why self storage facilities have been willing to rent to just about anybody who could pay the first month’s rent is the lien remedy. If a customer does not pay their rent, the facility operator can recover the spaced in 60 to 90 days from default.


Unfortunately, self storage operators report growing numbers of tenants who pay the monthly rent but are not good tenants. They do not follow the facility rules. They loiter at the facility for hours each day and sometimes bother other tenants. Recently, an operator had a tenant who would come to the facility every day with a group of three or four friends. They would loiter around the facility for several hours.


Landlords in other real estate sectors typically screen tenants as part of the rental process, however, it is not common in self storage. Apartment landlords have required credit checks as part of the rental process for years. This difference may be that a difficult apartment tenant is a more expensive problem than a difficult self storage tenant. If difficult self storage tenants become more costly, facilities may decide to change their intake practices.


Storage operators may need to reconsider the take-all-comers policy that has served the industry so well since its inception. Self storage facilities are no longer rows of buildings with blacktop roads. The modern suburban facility can be a nice looking facility and customer expectations have expectations of a clean, safe facility. This expectation is inconsistent with a location where people loiter. The dilemma for storage operators is that while running a credit check is not difficult; it is one more step in a rental process and adds some additional costs to the intake process. Some potential tenants may decide that it is easier to go to a facility that is not so picky about who rents a space. Ultimately, the market will resolve this problem for storage operators. If running credit checks cuts down on delinquencies and problem tenants, some facilities will institute the practice. If customers believe their property will be more secure at a facility that conducts tenant background checks, there will be storage operators who will serve this clientele.

| Categories: Legal, Operations | Tags: Tenants, Credit Checks | View Count: (5763) | Return
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