Sensitive Records Found in Unit—What to Do?

by Connie Niemann Heyer, TSSA Legal Counsel

 A doctor in Longview recently made the news when thousands of his medical records were found in a storage unit for which rent was unpaid. This is not a common occurrence in self-storage, but if it does happen to you, what do you do?

Duty to Safeguard Records

The duty to safeguard a tenant’s business records that contain sensitive personal information is NOT yours! These are not your business records; they are your tenant’s business records. Obviously, the first step is to contact the tenant and demand that he bring rent current and vacate the unit, including removing all records (lock the dumpster that day!). But if the tenant is non-responsive, and you initiate the Chapter 59 lien process, and discover sensitive files—then what?

Security Deposit; Shred

Ideally, get a security deposit from anyone you know is storing records. Write into your lease that in the event of eviction or Chapter 59 lien sale, the security deposit may be used to fund the cost of shredding the documents. Then put into your bidder agreement a requirement that the bidder legally dispose of all documents with sensitive information. You can have a shredder come to the facility and use the security deposit toward payment. But security deposits are the exception rather than the rule in our industry. So, then what? Sell them at auction, with conditions. Ideally you don’t want to end up with the records, so it would be better to have a third party buy them at auction. It would make sense to make clear in your bidder agreement that the buyer is responsible for legally disposing of any records found in the unit that may contain sensitive information.

Buy Them and Dispose

If there are no other buyers, probably the best alternative is for you to buy the records and ideally dispose of them carefully by shredding them, etc. A business’s safeguarding duties are limited to its own “business records.” In statute, “business records” is a defined term, and it means records that are “recorded in the operation of a business.” You do not record (generate) your tenants’ business records in the operation of your business; you only generate your own business records. That being said, it would be preferable, if at all possible, to shred these documents before disposing of them. Higher rent? It may be time to consider raising rent for commercial tenants, especially those likely to store records. Just like illegal drugs or other illegal items found in a unit, disposing of these sensitive records is sometimes a cost of doing business.

Summary

As a legal matter, you should have no liability for sensitive records that a tenant stores. But you risk bad public relations if you don’t address the issue in a manner the public would consider reasonable. Facility owners and managers may wish to consider having a protocol in place for dealing with sensitive records left behind by tenants.

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