Garages, Carports, Storage Units, Oh My!
In The Wizard of Oz, Dorothy, Scarecrow, and Tin Man are walking through a dark forest when their fears grab hold of them. Tin Man imagines lions and tigers, and bears. Dorothy adds an “Oh, my” for effect! Then, in unison, they repeatedly chant, “Lions and tigers and bears, oh my!” As rental housing owners and operators, we can feel the same way regarding garages, carports, and storage units. Oh, my!
All of us, including our residents, have more and more stuff! Cars, ATVs, boats, jet skis, motorcycles, mountain bikes, grills, craft tables, tools, etc. The list of “stuff” is endless. One person’s junk is another person’s treasure. But when the accumulated junk/treasure no longer fits into the rental unit or the new SUV needs an enclosed parking space, resident wants become needs that escalate into demands. Their stuff is now your problem. Oh, my!
We do not have time to be cowardly lions when understanding the operational and financial challenges associated with garages, carports, and storage units. Great news! The TAA REDBOOK has the answers! Just a reminder, this article does not provide legal advice. If you need operational legal advice, contact one of AATC’s member attorneys (https://www.aatcnet.org/legal-services-program.)
Following are industry best practices for managing garages, carports, and storage units.
Begin by clicking on the link below and reading the TAA REDBOOK article on the lease and sales tax obligation for garages, carports, and storage units. This article will help you and your on-site teams successfully comply with the laws and regulations that apply to garages, carports, and storage units.
A couple of highlights from the above-referenced article:
Sales Tax – You must collect sales tax if you charge a separate, specific amount for a garage, carport, storage unit, etc. However, if you incorporate these charges into base rent, you do not need to collect sales taxes. As always, consult a competent tax attorney with questions or concerns.
Higher Rent - The Texas Comptroller (the state government agency collecting sales taxes) does not prohibit rental housing owners/operators from charging higher rents for leases, including garages, carports, storage units, etc.
TAA Lease Form - Like many operational issues, the TAA Lease helps mitigate problems with garages, carports, and storage units. The TAA “Lease Addendum for Enclosed Garage, Carport, or Storage Unit” is a must if your offer these amenities.
Risk – Like many property management issues, there are risks involved with enclosed garages and storage. Fire and carbon monoxide are two common risks to consider. Open-air carports do not pose risks associated with enclosed garages and storage spaces. Be sure to address with residents the prohibition against storing hazardous materials.
The bottom line is that providing extra space for your residents’ vehicles and personal items is a fantastic amenity; just be sure to pay attention to what is behind the curtain (i.e., in the garage, carport, and storage unit).
You don’t want to be singing, “Garages, carports, and storage units. Oh, my!
Nicole Zaitoon, Allied Property Management, is AATC’s 2023 Government Affairs Committee Chair and a member of AATC’s Board of Directors. For more information, contact Perry Pillow at firstname.lastname@example.org.