Should Relocatable Storage Units Legally Count As Self Storage?

Posted by Alejandra Zilak on May 7, 2024 11:15:00 PM

Legal definitions have significant ramifications: permitted uses, safety implications, and tax consequences, to name a few. Therefore, when making decisions about what type of storage solutions you’re looking to operate, it’s crucial to be aware of what’s included in each definition. 


But as with all legal terms, what self-storage means can vary from jurisdiction to jurisdiction. That said, regardless of the county, traditional self-storage facilities tend to have certain common denominators: The units are located within a building, they are leased to tenants to keep personal property, and they may not be used for residential purposes. 


All these factors leave out portable storage units and shipping containers. But a recent scenario in Mitchell, South Dakota, has turned that argument on its head: A resident wants to install relocatable storage units on his residential property and lease them out to tenants. There are plausible arguments one could make as to why this could be a viable alternative: 


  • What if all the units are limited in size?
  • What if they are designed to blend into the aesthetics of the home and neighborhood?
  • What if they’re not visible from main roads?


Would any of the answers influence whether legislators or local planning commissions could consider redefining what constitutes self-storage?


What Do Industry Experts Think? 

Relocatable storage units come with a long list of benefits: You can optimize unused square footage. You can get them installed fast. You can customize them to fit your branding and sizing needs. They’re also more cost-effective, and since you can install them on top of one another, you can scale much easier than if you were operating a building. But all of these benefits are typically applied to commercial properties. 


Some industry experts believe that the scenario in Mitchell is an extremely rare and isolated case, so there wouldn’t be much risk of expanding the self-storage definition to include portable units. 


Blake Robinson, from Janus International, explains that relocatable units are an excellent way to generate revenue from empty square footage on a person’s property — and owners get to write them off as business expenses on their taxes. However, he’s only seen these additions to properties that are already commercial in nature. 


By the same token, Jessie Smith, from Boxwell, believes this is a tricky question, because there are so many different rules and regulations across counties. Yet, in all her years working in the industry, she has not encountered such a scenario, either. 


Then there are all the pitfalls associated with the unauthorized commercial use on a residential property. Anne Ballard, from Universal Storage Group, has also never encountered a similar scenario. However, she believes that even though the units can be customized to be a certain shape and color, they would still look like self-storage units, so neighbors would probably have strong objections. And if the resident lives in an area where there’s a homeowner’s association, it could end in lengthy and expensive litigation. 


Ballard also explains that homeowner’s insurance policies are not likely to cover these types of structures — and not just for the portable units themselves, but also to cover any perils encountered by tenants while on the property. Finally, there’s the nuisance of continuous foot traffic, both for use and for admin issues, such as payment of rentals; as well as security issues.


“Consumers expect the facilities to be clean, dry, and secure, so how is this owner going to allow access, or keep them secure?” Ballard questions. “Which locks or electronic locks would they use? And would there be a website for renting and payments, or would tenants just knock on his door at any time to rent or pay?”


She does point out, however, that if this scenario were to occur in a rural area, it may be easier to work around some of these problems. The main hurdles would be complying with state statutes and zoning regulations, as well as finding adequate insurance coverage. 


These observations highlight that using self-storage commercially on a residential property is so rare and has so many variables, that it doesn’t seem reasonable to equate them to self-storage. Doing so would only result in creating unreasonable burdens on organizations that use relocatable storage units for their original intended commercial purposes.


Then there’s also the fact that there are so many inherent differences between relocatable units vs. self-storage. The latter is climate controlled, are located in facilities that often have security personnel, and most importantly, are located within buildings. These factors alone make them so substantially unlike portable units, that they warrant having separate definitions and treated differently under the law. 


Self-Storage Attorneys Weigh In — And Come to Opposing Conclusions

The answer that’s most frequently given to legal questions is that it depends. And the issue currently being considered in Mitchell is no exception. 


Scott Zucker is an attorney in Atlanta, Georgia, with extensive experience in self-storage cases. In his opinion, wanting to install relocatable storage units on a private property to rent out to tenants is not cause to consider these types of units under the same definition as traditional self-storage facilities. 


“Typically, the issue in zoning approvals (or permitted use variances) depend on aesthetics. So if a solution can be created for visual approval, then they should be [permitted].” 


Elaborating on the issue, Zucker believes that there are ways to address aesthetics issues, such as ensuring that the units’ sizing, shapes, and colors are cohesive with the surrounding areas; or installing covered fencing that would prevent the units from being visible from outside the property. (Note: Ballard, of Universal Storage Group, counters this argument by stating that most businesses want to be visible from the street, so that potential customers are aware of their existence). 


Zucker adds that the key is whether the current local ordinances allow portable storage in the area. “It seems likely that there would be different zoning regulations in a rural area vs. an urban area. But if self-storage is a permitted use, I see no issue with allowing portable containers to be used on the zoned property.” 


On the other hand, Chris Walls, who’s also an attorney and CEO and President of Go Mini’s, brings up some nuances that come with this type of issue. For example, in addition to the legal definition of self-storage, it’s important to also consider the local definition of “movable”, as this could incorporate structures that are attached to the ground, or whether it’s a single unit, or a combination of units. 


You’d also have to keep in mind additional local regulations. Some cities require that the storage units are located indoors. “The vast majority of local ordinances state that if it’s movable, the units cannot be permanently attached to the property. If they’re detached, they are typically considered as temporary structures, so they’re usually permitted.” 


However, there are other considerations that come into play. Long-term rentals are a gray area. Yes, unattached units are usually temporary, as they tend to accommodate a move or home renovation. But sometimes, homeowners change their minds because they like the extra storage. 


“I’ve seen people who’ve rented mobile storage for 10 or 15 years,” Walls explains. “And depending on the jurisdiction, this could be considered as a way to circumvent the rules. If it happens with enough frequency, local legislators may draft new definitions for all related terms.” 


Local Planning Commissions Could Redefine Relocatable Storage Units, But Not Equate Them With Self-Storage

While relocatable storage solutions are not likely to be considered the same as self-storage in most circumstances, each jurisdiction could expand relevant definitions to ensure the orderly, uniform, and safe use of land. 


In the words of William Shakespeare, a rose by any name would smell as sweet. And calling one storage solution by a different name mainly to find a loophole in its usage could certainly backfire. 


Before making a decision on a course of action, check to see if it’s been previously done in your jurisdiction, whether you could obtain reasonable insurance coverage, and how local planning commissions have managed it in the past.



Alejandra Zilak studied journalism, went to law school, and now writes for a living. She also loves dogs.