One crucial provision
contained in a self-storage rental agreement is the “Limitation of
Value” provision whereby the tenant acknowledges that the value of the
goods stored does not exceed a specific amount. That limitation provision has
been upheld both in court cases around the country and, more recently, has been
incorporated by some state legislators in their approval of modernized self-storage
lien laws. Essentially, to the extent that the provision is upheld, it limits
the amount of a damages claim that can be asserted against a self-storage
operator even if that operator is liable for the loss or damage to a tenant’s
However, it has been the
opinion of some jurists that one element of a strong limitation of value
provision is the opportunity for the tenant to increase the limit amount as
established in the lease. But, to do so, the tenant must make a request to the
operator to increase the limit and the operator must consent in writing.
Certainly, an operator should only be inclined to increase the value limit if
the tenant can demonstrate that it holds sufficient insurance for the risk of
loss or damage to the newly valued stored goods. The best way for the operator
to accomplish this protection for its consent is to have the tenant sign an
addendum to the rental agreement which establishes the conditions of approval
for this increased value. A good addendum would include some of the following
Tenant agrees to maintain its insurance for one hundred percent (100 percent) of the full replacement value of the property stored or to be stored until the termination of its Rental Agreement and removal of its property from the storage facility.
Tenant expressly agrees that the carrier of its insurance shall not be subrogated to any claim of Tenant against Owner (as defined to include its officers, employees, and agents) from any and all claims of loss or damage to the personal property covered under such insurance.
If Tenant allows the insurance policy to lapse by failing to pay the required premiums, then Tenant shall be considered self-insured, whether or not Owner has been informed of such lapse.
If Tenant allows the insurance policy to lapse by failing to pay the required premiums, then the limitation of value provision contained in the self-storage agreement shall be reinstated and Owner’s present waiver shall be deemed null and void.
To the extent that Tenant’s insurance does not cover the loss or damage claimed by Tenant, then the limitation of value provision contained in the self-storage agreement shall be reinstated and Owner’s present waiver shall be deemed null and void.
Again, a tenant may not make such a request to increase the
stated value limitation and if so, the provision will stand as written. But if
a tenant seeks to increase the limit, an operator, in order to protect itself,
should insist that the tenant obtain corresponding tenant insurance, provide
proof of that insurance, and execute an addendum that obligates the tenant to
maintain that insurance throughout the course of the tenancy. Without the
increased insurance in place, a self-storage operator should not raise the
contractual value limitation. To do so may simply be subjecting the operator to
the risk of increased liability if a claim occurs.