Extra Space Settles NYC Lawsuit for $1.7 Million

Extra Space Storage has agreed to pay $1.7 million to settle a lawsuit and a three-year investigation by New York City.

The Department of Consumer and Worker Protection (DCWP) first opened its investigation in 2023 after after receiving many complaints about Extra Space and other self-storage operators. The agency reviewed more than 100 complaints against Extra Space and concluded the company engaged in widespread violations of New York City’s Consumer Protection Law, including:

• False advertising: The company promised clean storage units but complaints shows infestations, water damage and mold.
• Bait-and-switch pricing: Extra Space would steeply increase rates after move-in without warning despite stating it would provide 30 days' advance notice.
• Wrongful lockouts and auctions: Extra Space denied customers access to their units and auctioned off personal belongings without due process when tenants got behind on payments.

Under the agreement, $1 million will be distributed to customers through a restitution fund, while the remaining $700,000 will go toward civil penalties. 

“People pay Extra Space to protect the things that matter most to them, not to have those belongings neglected, held hostage or auctioned off,” Mayor Zohran Mamdani said in a statement. “This company — like others in this industry — lured New Yorkers in with low prices, jacked up prices, let units rot and took people's property when they couldn’t keep up.”

Extra Space, a publicly traded company with a market value exceeding $30 billion, did not admit wrongdoing as part of the settlement. "While we maintain our disagreement with the allegations raised in the complaint, we chose to settle this matter to best serve the interests of our customers, team members, and stakeholders," said a company spokesperson. "We remain committed to providing quality self-storage services and delivering a positive experience for our customers."

The agreement comes on the heels of new licensing requirements for self-storage operators that take effect on August. 25. Under the new rules, facilities will be required to clearly disclose pricing, maintain storage units, eliminate deceptive advertising practices used to attract customers with low introductory rates, and give renters the option to terminate their contracts instead of absorbing price increases.

Consumer and Worker Protection Commissioner Sam Levine said the settlement, combined with the upcoming licensing rules, is intended to hold the industry more accountable. “I think these companies feel they have a captive audience, captive consumers, and they're taking advantage of that,” Levine said. “One of the things that we're doing both through this enforcement action and through the licensing regime we're setting up is to make sure that companies can't continue to exploit the power they have over consumers who entrust them with their goods.”

Beginning Aug. 1, customers who believe they were harmed will be able to apply for compensation from the $1 million restitution fund by emailing the agency with details of their experience and supporting documentation. DCWP staff will review each submission and determine eligibility.