Increasing Fees

There are numerous factors that facilities must ensure they get right, both at sign-up and during the life of the agreement, if they hope to increase fees legally.  We all know that many storers stay with us for long periods of time — usually, much longer than the storer initially anticipated. It would be financially unviable for a facility to leave the rate the storer pays for their space at the same level for the whole of a lengthy storage relationship. But is it legal for a facility to increase the fee the storer is paying, and how can they do it?

Getting the basics right — the agreement
For a storage facility to be able to increase storage fees during the storage period, there must be a clause in the storage agreement enabling the increase to occur. All the SSAA’s agreements include a right to increase the storage fee from time to time. However, the wording of this clause has been altered over the years to keep it in line with legislative changes, so it is imperative that member facilities check that they are using the most up-to-date version of the SSAA’s agreement. The current Standard Agreement includes the right to increase fees after a period of notice has been given. Future versions of the Storage Agreements — due for release in the first half of 2017 — will include even more specific wording.

No increases during initial fixed period
When a storer signs up for storage, the length of the initial fixed period is recorded on the front of the contract. Generally, this will be a month, but the term can be longer (or shorter). Once this initial fixed period has concluded the storer is what we call a “continuing” agreement. That is, they continue to store under the same terms and conditions until notice of termination is given
by either the storer or the storage facility. The agreement has been drafted in such a way as to provide flexibility to facility members on this point, and each facility specifies on the front of the agreement the length of notice required at their facility. Hence the amount of notice required to terminate is specified on the front of the agreement and may vary from facility to facility.

You CANNOT increase the storage fee during this initial fixed period. It is only after the fixed period has passed and the storer is a “continuing” agreement that you can increase their storage fees. If you have an open-ended agreement — that is, there is no “until date” or no end date for the initial fixed storage period — there is an argument that you may not be able to increase the
storage fee. Make sure you put an end date on each contract!

How do I increase fees?
You need to give one full account cycle plus two weeks’ notice to increase fees.  If you charge your storer monthly, then this will mean you need to give one month plus two weeks’ notice of the
increase or put more simply six weeks’ notice. You should do this in writing. When the storer has agreed to electronic-only correspondence from the facility, you can send an email and SMS with the notice. When the storer has NOT consented to electronic correspondence only, it is considered best practice to send notice of a rate increase by registered/trackable mail.

You should allow the storer the option to terminate and move out without penalty before the rate increase if they object to the rate rise. This would mean, for example, if you usually require 21 days’ notice to terminate you would not penalise the storer for only giving five days’ notice before moving out.

How much?
Any increase in storage fees must be reasonable. What is reasonable would take into consideration demand, vacancy levels, CPI, the tenant’s payment history, and so forth. Why can’t we change all fees? Why only the storage fee? Warning! Boring lawyer talk ahead!

Current consumer laws target standard form contracts — our storage agreements are standard form contracts. This is because they are a “take it or leave it” contract — we do not negotiate
individual terms with each storer.  There are onerous rules that apply to standard form contracts that do not apply to negotiated contracts. This includes an overarching “reasonable”  requirement. Furthermore, any ability to change a standard form contract term without the consent of the other party is automatically deemed an unconscionable clause under consumer laws. In our standard contracts, we enable ourselves to change the storage fee without the consent of the storer, which puts this clause into the “prima facie unconscionable” category. We temper this argument with the following facts:
• It is not reasonable to have a storer stay indefinitely with us and continue to pay the same rate they paid initially, particularly when that storer is with us for many years;
• We only increase fees after giving generous notice of the increase and allow the storer to move out without penalty before the increase takes place.
• We cannot change any other fee — including late fees, cleaning fees etc. — over the life of the agreement.

We believe this ensures our right to change storage fees will not be interpreted as being unreasonable or unconscionable. However, it is important that members enforce rate rises in line with the guidelines set out here.

Make sure your agreements are up to date As an aside, recent changes to competition and consumer law in Australia and changes forthcoming in New Zealand mean it is more important than ever to ensure that facility owners check for updates to the SSAA’s standard agreements and put those updates into use at their facility.

The last update to the Standard Storage Agreement in Australia was released in April 2015, and in New Zealand in March 2016. If you have not updated the agreements you use to these
latest versions, it is imperative that you do so without delay. The previous Standard Agreement includes clauses which are at significant risk of being interpreted as breaching current consumer laws.

In conclusion
You are entitled to increase storage fees as long as you are using the SSAA’s agreements and you follow the guidelines above. And look out for updated Australian agreements, due for release
in the first half of 2017! Simone Hill BA (Hons) LLB, LLM, is the Legal Advisor to the Self-Storage Association of Australasia.


Not all self storage facilities are created equally

No two businesses are the same – especially nowadays, as companies adapt to a changing marketplace & become more creative with their offerings in an attempt to “stand out from the crowd”.

With this in mind, it’s important to make sure your prospects (potential customers) understand your points of difference. After all, if they’re shopping purely on price, the more expensive facilities probably won’t even make it onto the list! If that’s you, then it’s time to give prospects a reason to choose you! Let’s take a look…

Self Storage facilities are different?
We work in the industry, so we know this – but do your prospects? If they’ve only ever seen self storage on TV (and it’s a bunch of rusting shipping containers on a block of land with a chain-link fence around it), then that’s what they’ll assume it is. If they get your quote and it’s substantially more expensive than your competition, they may not stop to ask why.

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Self Storage Technology

No matter the size of your facility, technology has both tangible and intangible benefits that will help you make money and produce the results your customers deserve. A precisely outlined technological plan affects the culture, efficiency and relationships of your business. In today’s storage world, it is necessary for employees to interact with tenants quickly and clearly. When customers use technology to interact with a business, the business benefits because better communication creates a stronger public image. In the past few years self storage has seen an exponential growth in technology. This article will help you understand a new way of looking at technology that could prove both profitable and sustainable.

Technology is here to stay. The sooner you understand that the better. Tech isn’t something that you should shy away from. Technology is an action verb, it evolves. Tech changes so much that business have departments dedicated just to that. You need to understand that technology will bring you more revenue. It is critical that you understand how and when to implement it. If not, you might be paying for technology that will give you little to no return.

How tech benefits your daily operations
The purpose of technology is to help productivity and to assist workflow. For storage the goal is to make operations run smoother and to eliminate “busy work” and increase revenue. By taking advantage of technology you can free up that time for managers and employees to work on projects to help move your business forward.

Look at your daily operations and see what tasks you can make easier with technology. For example, we contact tenants 3 times before they are over locked. In our previous software emailing large number of people wasn’t easy, so we called them. It was an enormous waste of time. In a typical day we would devote at least 2 hours to the task list. After researching other storage software we realized there were better products to suit our business need. The technology in our current software allows us to send reminders via email with one click. A task that took 2 hours can now be done in less than 5 minutes. Do your research and look at various opportunities for technology in your self-storage business. I cringe when I hear someone use the excuse “this is how we have always done it,” or “my people can’t do that.” If that is your mentality, you are missing out on some wonderful opportunities at your disposal. Encourage your staff to look at what the industry has to offer. Continually challenge your thinking on your processes.

What is the right criterion for choosing technology?
The tech industry refers to the concepts “bleeding edge” and “cutting edge.” Bleeding edge technology is a brand new technology that hasn’t been widely tested and perfected on a large scale. It’s referred to as bleeding edge because if you jump in with both feet, be prepared to lose some blood. Often the blood is in the form of technology not working as promised, patches and countless bugs. Many times operators are caught up with the idea of technology for the sake of technology. Remember this is not a new phone upgrade. You are potentially spending a lot of money on something that is unproven and may not even be necessary. Save “cool” tech for your phone, not your business.

The second concept is “cutting edge.” Cutting edge is bleeding edge that has had some time to be test and improved. It has been out for clients to use. Most of the bugs have been changed and tested. It’s still not bullet proof but if you are interested in new tech this might be the category for you.

I would like to introduce to a third category I call the “rubber edge.” The rubber edge takes its name from the idiom “where the rubber hits the road.” This is something that is used every single day. It is something you can rely on, it is something that has been tested and it is something that helps move your business along. The rubber edge is not tech for the sake of tech. It is what works for you and helps you in your daily operations to generate more revenue.

A rubber edge point of view means that you have a clear path of where you want your business to head and how you want technology to support your business goals. For example, I am currently writing this article on a 3rd generation tablet. I knew I wanted a certain amount of RAM and memory. The first two generations failed to provide that. The 3rd generation was perfect for my needs. Of course now there is a more updated versions, but I knew what I wanted and I am happy with I have.
What are the criteria for choosing a rubber edge technology?

1- Ask yourself “am I just adding technology for the sake of technology?” What is your motivation for purchasing the newest technology? Are you a person that needs to upgrade your phone because they have a new color? That’s okay if you are. However, remember your decision in business is more important than just a new phone. You have employees and tenants that depend on you to make good decisions for their benefit. Don’t let your need for the latest and greatest cloud your judgment for business technology.

2- Know your audience – If you have a facility in a small town where people still don’t lock their doors, you might have a different need from a facility in major city. When you understand who your general audience is you can use tested technology when needed.

3- Is it worth it in the end? This is an extremely important point. If you decide to change to a new system or add some additional technology you need to know what the return is. Are you doing something that will increase your revenue? Keep in mind that switching to an operating system that takes less time to process accounts is increasing your revenue. As previously stated your staff will have increased time to work on projects to move your business forward.

4- Are you taking full advantage of what you currently have? If you are not using your current tech to the extent of its ability you are missing out. Most companies have manuals and webinars for you to learn more about their products. If all else fails contact their sales rep and ask to be put in contact with someone who will help you explore your options.

If you remember the rubber edge criteria when choosing technology you will always have a well thought out tech plan. Embrace what is out there and challenge your current thinking. The world of technology has come to self storage. Enjoy it and profit from what it has to offer.

By Rick Beal
Rick Beal is part owner of Cubes Self Storage. He’s involved in the company’s leadership, marketing, planning and training. Rick resides in Salt Lake City Utah and is a board member of the Utah Self Storage Association. He’s motto is “storage is a business of inches not miles.”
Cubes Self Storage – Salt Lake City, USA.

Outside the Box

Kennards Self Storage have continued to innovate and create brand awareness in the local area with the introduction of their Kennards bicycle.

The bike is free for customers to use and is designed for those that may not have a vehicle to transport their goods or box purchases.

The bicycle was custom designed by Psbikes and features heavy duty straps to secure items such as boxes, a wooden cargo hold, bright Kennards branding, and a rear basket.

KennardsBicycle 2

Kennards are currently trialing the bike at Moore Park NSW and North Melbourne VIC due to the close proximity of bike paths and apartments and the lack of hills in the area.

The unique style of the bike and stand out colour scheme is sure to draw attention when it is being used and helps offer another talking point as a feature for the centre.

How can technology automate my Self Storage business?

Having worked in the self storage industry for almost a decade, I’ve visited many self storage facilities over the years. Sometimes, my visits are to train facility staff & managers on new tools available at their disposal, whereas other visits are to help a new owner make sense of the beast they’ve inherited (or purchased) from another owner.

Regardless of the state of a business, I often find that many people aren’t using all of the software tools available to them. If you are not using your current tech to the extent of its ability you are missing out.

So let’s take a quick look at four great ways you can use software tools to help you automate your business…
1. Use automated electronic storage agreements: If you’re an SSAA member, then why not take advantage of electronic SSAA agreements? Load these into your self storage management software (e.g. Storman), then generate & print one (for signing) whenever a new storer signs-up. The benefit: Less time, less mistakes & less wastage. No more issues trying to decipher a storer’s handwriting & no more wasted agreement pads!

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Written by Andy Pudmenzky (Marketing Manager, Storman Self Storage Management Software)

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