The self-storage industry has grown significantly in the UK, with revenue jumping 11% in 2022. This industry doesn’t have an excessively high barrier to entry, making it a promising new avenue for individuals looking for a fresh business model. Naturally, there are several considerations you need to make to protect yourself as a business owner.

Acquiring the facilities is a given, but it also comes down to using the right software. You may already be aware of the need for self-storage software, which helps owners facilitate and manage storage units, pay bills, and put up a website to attract clients. However, it would be best to consider using contract software to cover your legal liabilities.

Important laws to consider for self-storage

As much as business owners aim to provide an excellent service, some issues may crop up when dealing with all manner of customers. When you lease out your facilities, a contract will establish ground rules, terms of agreement, and a potential course of action in the event of unexpected problems. Not only does this protect you from loss due to lessee negligence, but it also gives you a safeguard to move forward if you encounter any hurdles that are out of your or your customer’s hands.

The very nature of self-storage puts much of the upkeep on your consumers, so it is essential to establish boundaries, insurance, and transparency. You can potentially face liability suits even though you do not directly handle the goods within your customer’s unit. The standards for self-storage businesses in the UK are established in accordance with the Self Storage Association (SSA). The SSA UK has a Membership Standard designed to ensure the safety and security of self-storage facilities and oversee the conduct of those operating them.

By law, anyone with authorisation to operate temporary storage facilities of any sort is responsible for accepting and releasing goods into and out of their facilities, collecting and updating stock account records whenever goods arrive or leave the premises, and handling relevant Customs Duty and associated charges even if the items belong to someone else. These charges are mandatory on applicable items until they are cleared to a customs procedure.

If your facility receives goods from the Frontier Transit Shed, you must accept them without alteration, reduction in size, or interference. If you need to alter or unpack goods from temporary storage, you must request permission from UK Customs authorities. Of course, these laws mainly apply to clients who often deal with stock or merchandise to be imported or exported.

You must also consider the type of goods you can legally store and what services you offer to provide a proper environment for specific items. When writing up your contract, you should have guidelines for what your lessees can store and indicate the identification of goods. If you are interested in catering to a more diverse array of storage needs, you must apply for specific certificates and authorisation.

The two main categories to consider for authorisation are food and firearms. Storing food requires you to register your facilities as food business premises. For firearms and ammunition, you or any employee operating the facility may accept such, provided these are legally obtained and fall within Sections 1 and 2 of the Firearms Act 1968. You will also need your premises approved by authorities. If the goods fall under Section 5 of the same act, you are required to have a Firearm Certificate from the Home Office.

Storage laws cover many other potential circumstances, but the main course of action is to keep a record of all staff, visitors, vehicles, and goods. You should also have detailed contracts with every lessee.

How to protect yourself with a contract

To cover all bases, the best thing for your business is to employ a legal team. A lawyer will ensure that your contracts are watertight and won’t leave you liable for any issues that may occur within your storage facilities. They will also utilise contract drafting software to save time, allowing them to focus on the pertinent details that will protect you in the long run. Software like this also allows lawyers to access and edit all information across documents without navigating away from the current provision being reviewed, simplifying the process. This one-click system will enable you to easily make changes and amendments without losing context.

As you learn more about the specific needs and conditions that may apply to any given client, it will be most beneficial to have the tools and resources ready to integrate any sudden additions before finalisation. Your lawyer should be able to provide a general base contract that can apply to different situations. However, depending on the situation, you will still need to adjust your agreements. The basics of a self-storage contract will cover all the payment details, unit description, items included, contract dates and duration, and contact details for both parties.

Beyond the regular essentials, you must also set down terms and conditions. The most crucial factor to consider is the release of liability, a waiver your lessee will sign to confirm that any damage or loss to belongings will not be held over you.

If this is not an option they want to take, you may also include an insurance clause with relevant coverage. It’s essential to have insurance in place anyway to protect your property, but this plan may be extended to your customer’s agreements depending on the contents of their unit. Make sure you note what items are prohibited and not covered by insurance. If anything untoward does happen within these units, you don’t want to take the damages.

Your contract should also cover indemnification, lien, breach of contract, payment due dates, late fees, delivery notice, and other potential fees for services like locks, maintenance, and deliveries. In the event of natural disasters or theft, you will also want to include protective measures for loss and damage within your contract.

Another significant inclusion should be establishing fees and the next steps in the event of abandonment. Unit abandonment is common enough that storage auctions are a norm. Recently, a man from Oregon bought an abandoned unit for only $410 (£325) without knowing what it contained and ended up with $70,000 (£56,000) worth of Gucci, Coach, and other luxury items. Having abandonment clauses ensures that you don’t have a stagnant unit that makes no profit and releases you of any legal responsibility if its previous owner tries to make a claim after the specified payment or pick-up time window.

With the right tools, legal assistance, and savvy, you should be able to minimise risk and run your self-storage business smoothly. Having contracts will give you peace of mind and allow you to focus on other management concerns and priorities.