Extra Space Storage sued by New York City over 'predatory' practices

By Jonathan Stempel

NEW YORK, Feb 10 (Reuters) - New York City sued Extra Space Storage EXR.N, one of the largest U.S. owners of self-storage space, accusing it of bait-and-switch pricing and other "predatory" practices, and letting its storage units suffer from vermin infestation, water damage and mold.

The city's Department of Consumer and Worker Protection accused Extra Space on Tuesday of violating false advertising laws by luring consumers with cheap prices for storage units that the company falsely promised were "clean" and "pest-free."

According to the lawsuit, Extra Space "dramatically" raised prices soon after many consumers moved their belongings in, often without notice. Some rents doubled within one year.

The Salt Lake City-based company was also accused of changing locks and threatening to auction belongings to "extort" consumers into paying higher prices or undisclosed "junk" late fees, sometimes totaling hundreds of dollars.

“Many New Yorkers rely on self-storage as a necessary solution to limited living space or sudden changes to their living situations," City Council Speaker Julie Menin said in a statement. "It’s time for storage companies like Extra Space to face accountability for exploiting hard-working New Yorkers."

Extra Space said in a statement it is "actively conducting a comprehensive internal review to accurately assess the claims mentioned in the complaint."

The lawsuit filed in a New York state court in Manhattan seeks full restitution and more than $5 million in civil penalties.

Extra Space operates 60 of the more than 300 self-storage facilities in New York City, and receives more complaints than any other operator, the city said.

In afternoon trading, Extra Space shares were up $1.76 at $142.12. Extra Space's market value is close to $30 billion.