The SCRA is the sort of regulation that can cause business owners to lose sleep.
There’s a good chance you’ve never heard of it, but breaking the regulation has resulted in successful six-figure lawsuits against the offending business.
This legal landmine doesn’t have to be scary. Read on to see how the Servicemembers Civil Relief Act affects self storage.
What is the SCRA?
SCRA stands for the Servicemember’s Civil Relief Act, a piece of legislation that provides extra civil protections to members of the armed forces. For self storage, this specifically relates to how the facility can close and auction off a self storage unit belonging to a deployed servicemember.
With the SCRA, self storage operators must get a court order before they can send a deployed servicemember’s self storage unit to auction.
You can still charge late fees, but to actually get the unit back, you cannot simply follow your auction protocol.
This is where self storage operators can run into trouble. If you don’t have a good record of who in your facility is an active servicemember, you might put a lien on a unit without realizing the SCRA applies.
How Do I Protect My Business?
Complying with the SCRA isn’t too difficult for a self storage operation, once you know that you need to. The most important thing is to keep a record of your active military tenants so you can avoid putting them through the same process as everyone else.
You’ll need to set up a process for tenants protected by the SCRA so you don’t get caught in an expensive lawsuit.
1. Download or create an Active Military Form
You can find our Active Military Form here or as part of our Self Storage Operator's Toolkit, which has a ton of helpful documents that our friends in the industry are already using every day. You could also find other options or create your own form. You’ll need something that gathers all the important information, including the tenant’s name, address, contact information, and self storage unit number.
Include a place for information that would let you verify their deployment - ours has room for their branch, base, unit, and commanding officer information. This info will be useful if you end up needing to pursue a court order to get your self storage unit back.
2. Communicate with your new tenant
Many self storage operations offer military discounts - this is a great way to start the conversation about filling out an active military form.
The active servicemember will need to let you know if they’re going to be deployed - that’s what triggers the SCRA protections. Of course, they may not think to notify you (if they’re being deployed, they’ve got a lot on their mind), so you’ll need to be careful before starting a lien on their unit regardless.
3. Incorporate this info into your lien process
Now that you have all the information in hand, you’ll need to be sure you don’t lock it in a filing cabinet and forget about it. Whenever you’re sending a self storage unit to lien, be sure you have a way to remind yourself to check whether this tenant is an active servicemember.
You can use self storage software to alert you about the status of a tenant when you begin the lien process. You can also put notes in the tenant’s profile in your PMS, or create a special category that keeps your active servicemembers in a second category.
Regardless of how you approach it, as long as your SCRA tenants don’t get sent to lien without you noticing, you’ll be ok!
How do I get my self storage unit back?
The only way to process a lien on an SCRA-protected tenant is by getting a court order. Often this isn’t worth the effort, as you’ll spend more in legal fees than you’d make on the auction, so you should only try to get a court order to vacate a unit in extreme circumstances.
Legal help is advised. Check with your local self storage association to find a lawyer who understands the industry. Your self storage association may also be able to provide you advice on how to navigate these complicated issues.
Sending your delinquent tenants to auction isn’t as important as avoiding the massive lawsuits that can come with violating the SCRA.
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