Oct 152007

I was recently asked a terrific series of questions by an area manager of self-storage facilities in Minnesota. Specifically, an occupant was sold for non-payment and after the property was sold the occupant claimed that he had not received the proper notices as required by statute to the last known address of the occupant since the Occupant claimed he sent notice of a change of address via e-mail to the facility. In this case, the lease required a change of address to be “signed”. The occupant alleges that because of recent cases, the sending of an e-mail constituted a digital signature and that the facility should have accepted the e-mail. The facility denied receiving the e-mail and claimed even if there was an e-mail that it did not meet the requirement of the rental agreement that the notice be signed to change and address. The question, surprisingly, centered on whether or not it is bad customer service to refuse a change of address by e-mail.

The notice from an occupant of a change of address is common in this industry. Many times your occupants are renting a self-storage unit because they are moving, they are between addresses due to the loss of a job, an eviction, a transfer, and/or they are your occupants because of a local or long distance move. This makes receiving and acknowledging a change of address one of the most critical operations you may have at your self-storage facility.

Let’s discuss the “sure” things first.

Most self-storage statutes make some reference both in the definition section and in the lien sale section to a “last known address.” Some statutes set out how addresses may be changed, such as in Michigan or Florida, the Act in these states requires that a change of address occur “by hand delivery or first class mail.” While this is not the certified mail that I suggested above, at lease these statutes tell you what you may and may not require when it comes to a change of address. Several states, such as California, require you to request a secondary address where you can send notices, although I do not know of a state that requires that you get a second address if an occupant refuses to give you one. Thus, it is absolutely critical that changes of address be treated, practically with reverence, and that the process of obtaining a change of address be highly controlled. The best way of controlling this process is by having a clause in your rental agreement that sets forth how and when a change of address may be given to the operator.

Particularly in states that do not have self-storage statutes and/or states where the statute does specify the methods for turning in a change of address, as an example, Florida which provides only the last known address is the address provided by the occupant in the latest rental agreement or the address provided by the occupant in a “subsequent written notice of change of address.” You need to define how that written change of address can be given to you. Otherwise, you are left open to claims of faxes, e-mails and who knows what else. For everyone’s security and best interest in states where there is doubt about a change of address, draft your lease to require that change of addresses be given via certified mail or in person at the office. We ask our managers to explain this concept to occupants in great detail, particularly that a changed check address or a changed return address on a check payment envelope might be missed and thus it is critical to notify us the “right way” of a change of address.

Some ideas that I have seen that work well to encourage proper notification of a change of address are to provide a change of address form or card in a folder with the initial lease documents given to your occupant at move in. For example, “here is a folder with a copy of your lease, a copy of the rules and regulations for the facility, one get out of late fee card, and a form to change your address. It is so important that we be able to contact you at all times that put that we created a separate form.” Several of our clients also leave a box of change of address forms outside the office to drop in the night deposit slot or payment slot, although this is certainly not as secure since there could be “pranks.” Still I would rather get the notice of that change of address “in person” than by e-mail or phone message and hopefully your video system records the change of address being deposited in your drop slot. I even have a few clients who leave a change of address form taped to the inside of the self-storage unit when they rent the unit. All of these ideas together generally work. However, the person in Minnesota who asked the question is right, occupants want the easiest possible experience as they consider having written form to the office or worse, send a certified letter to the office, as something they should “not be required” to do.

If you accept e-mails, faxes, phone calls, change of addresses on the outside of payment envelopes, etc., you are going to miss a change of address through you or your employee’s own carelessness or because the e-mail is blocked by a spam filter, or the fax will be lost in cyber space. It is just going to happen. It is Murphy’s law that the person who changes their address allegedly by e-mail or fax or telephone call, is going to be the occupant who goes delinquent, who is not going to give you a secondary contact address, who has no cell phone or whose cell phone is disconnected, and you are going to sell that person and then wonder for the next several years if that person is going to come out of the woodwork and claim you did not send them the necessary service.

Let me address one thought that is probably going through some of your minds right now. Many state statutes say that the service of the default notice is “presumed delivered ‘X’ number of days after depositing it postage pre-paid in the U.S. Mail”. I caution you for two reasons: (1) the requirement of some of these statutes are technical. You may have to obtain a certificate of mailing from a post office or, if certified mail is required with return receipt, the only way that this is a valid method of service is if you actually take the letter to the post office and get it stamped at the post office. While, you may think you are in the clear by serving and presuming delivery and that the statute will protect you, unfortunately you may find out that you did not actually follow the statute as required. Also, can you presume delivery of mail that is actually returned to you? (2) Judges reserve the right to not agree with you on presumption of service if the occupant comes in and provides some evidence that they provided you a change of address which you allegedly did not use or ignored. In the example from the question above, the occupant claims to have sent it via e-mail and claims the facility must have deleted the e-mail. This occupant even claimed that he could reprint the e-mail that he allegedly sent to the facility. Regardless of whether you have a presumption of delivery in your state or not, this type of situation exposes you to unnecessary risk.

The biggest problem with e-mail and faxes is that they can be faked. It is easy to create a forwarded e-mail that looks likes it was from an original that was simply another mailbox of the occupant. Further, occupants can send an e-mail notice of change of address and mistype the address or send from the type of e-mail that is blocked by your spam filter. I have inquired of several technically savvy people to ask whether or not your internet service provider can trace receiving an e-mail. The answer is yes that an e-mail can be traced for a period of time. No one could tell me exactly how long. The millions of e-mails sent every day make it virtually time and cost prohibitive to actually try to run a trace backwards through your internet service provider to determine whether or not you actually received an e-mail from your occupant. Even if your trace showed an e-mail was even sent by your occupant, it would be impossible to prove that this e-mail contained the change of address. Thus, while the occupant can say I e-mailed you, they could have e-mailed you anything and claimed it was a change of address later. For these and many other reasons accepting change of address by this method, by answering machine, by phone, etc. is simply too risky and exposes you to unnecessary liability.
Let me make some suggestions for you:

1. The clause that we suggested above requiring notice of a change of address in person or by certified mail. That is still the best way to ensure that everyone knows a change of address has been made and that occupant has a real receipt to prove it was received.
2. If you have a kiosk that has thumbprint recognition and a camera, any change at the kiosk would certainly be notice as if in person because a digital record would be maintained that this person particularly came with a recognizable thumb print and changed the address. Compare this, by contrast, to a prank e-mail you may receive allegedly from an occupant but actually from a disgruntled boyfriend/girlfriend/spouse changing the address. How are you going to know for sure the e-mail received is actually from your occupant?
3. If you want to accept notice by computer, refuse e-mail and instead set up a dedicated, secure web-site where each occupant can use their name and password they create to log in, provide these types of changes of address and receive a “confirmation number” of the change to their profile. Thus the change of address is secure. The password is known, hopefully, only to the occupant and this is the type of “digital signature” that so many courts recognize as valid and binding.
4. Add to your voicemail greeting on your telephone system, if you do not use an after hours call center to field calls, that Occupant may not leave a change of address on the voicemail system and expect it to be binding. We see that in the insurance, financial, and security industries, you cannot change or bind coverage via phone, you cannot buy or sell stock with a phone message, and somehow insurance agencies and stock brokerages still survive being so “consumer unfriendly”.
5. Finally, if you really are going to, at some point, accept changes of address via phone, take a page from the banking industry. If someone provides a bank or credit card company with a change of address or other activity on the account, a notice is sent to both the new and old address advising the customer that a change has occurred to the account. You can do the same thing, notify the occupant that we believe the occupant called to change the address and that if the new address is returned to you undeliverable, unclaimed, etc., then you can start working on contacting the occupant right away as opposed to, if and when occupant ever becomes delinquent and difficult to find.

Please understand accepting changes of address via phone, fax, payment envelope, is at best, risky business. Instead of being customer unfriendly about it, explain to the occupant how, for their protection and the protection of their goods, there are strict rules, like the banking, insurance, or stock brokerage industry, that a significant change to the account requires a document in person or sent in a secure manner like certified mail or by secure website, signed by the occupant. To emphasize this point, you can always turn the tables on the occupant and say “you would not want me to change any significant terms and conditions of your occupancy agreement (I know you have to be careful about changing rent amount when you make this type of statement) without getting a copy into your hand and/or obtaining your signature on a revised document. I would hope you would understand why we would want the same thing.”

Jeffrey J. Greenberger is a Partner with the law firm of Katz Greenberger & Norton LLP in Cincinnati, Ohio and is licensed to practice in the states of Ohio and Kentucky. Mr. Greenberger’s practice focuses primarily on representing the owners and operators of commercial real estate, including self storage owners and operators.
This column is for the purpose of providing general legal insight into the Self-Storage field and should not be substituted for the advice of your own attorney.
Jeffrey’s new website, www.selfstoragelegal.com, contains Jeffrey’s legal opinions and insights into the self-storage industry, as well as an article archive.
You can send your questions, comments, or suggestions for future topics to Jeffrey J. Greenberger at jjg@kgnlaw.com, or mail them to Jeffrey J. Greenberger, c/o Katz Greenberger & Norton LLP, 105 E. Fourth Street, Suite 400, Cincinnati, Ohio 45202, or you can reach Mr. Greenberger at (513) 721-5151.


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