COMMITMENTS AND CONTINGENCIES

The Company has operating leases on its corporate offices and owns 22 stores that are subject to leases. At December 31, 2016, future minimum rental payments under these non-cancelable operating leases were as follows (unaudited):



Less than 1 year	$	6,123
Year 2	6,677
Year 3	6,124
Year 4	6,080
Year 5	5,897
Thereafter	90,025
	$	120,926

The monthly rental amounts for three of the ground leases include contingent rental payments based on the level of revenue achieved at the stores. The Company recorded expense of $4,578, $3,858 and $3,406 related to these ground leases in the years ended December 31, 2016, 2015 and 2014, respectively.

The Company is involved in various legal proceedings and is subject to various claims and complaints arising in the ordinary course of business. Because litigation is inherently unpredictable, the outcome of these matters cannot presently be determined with any degree of certainty. In accordance with applicable accounting guidance, management establishes an accrued liability for litigation when those matters present loss contingencies that are both probable and reasonably estimable. In such cases, there may be an exposure to loss in excess of any amounts accrued. The estimated loss, if any, is based upon currently available information and is subject to significant judgment, a variety of assumptions, and known and unknown uncertainties. Therefore, any estimate(s) of loss disclosed below represents what management believes to be an estimate of loss only for certain matters meeting these criteria and does not represent the Company's maximum loss exposure. The Company could in the future incur judgments or enter into settlements of claims that could have a material adverse effect on its results of operations in any particular period, notwithstanding the fact that the Company is currently vigorously defending any legal proceedings against it.

The Company currently has several legal proceedings pending against it that include causes of action alleging wrongful foreclosure, violations of various state specific self-storage statutes, and violations of various consumer fraud acts. As a result of these litigation matters, the Company has a liability of $5,600 as of December 31, 2016, which is included in other liabilities on the consolidated balance sheets.

As of December 31, 2016, the Company was under contract to acquire four operating stores and 12 stores to be acquired upon the completion of construction. The total purchase price of all stores with commitments was $183,581. Of these stores, seven are scheduled to close in 2017. The remaining stores will close upon completion of construction, expected to occur on various dates in 2018 and 2019. Additionally, the Company is under contract to acquire 16 stores with joint venture partners, for a net investment of $74,708. Eight of these stores are scheduled to close in 2017 while the remaining eight stores are expected to close in 2018.

Although there can be no assurance, the Company is not aware of any material environmental liability, for which it believes it will be ultimately responsible, that could have a material adverse effect on its financial condition or results of operations. However, changes in applicable environmental laws and regulations, the uses and conditions of properties in the vicinity of the Company’s properties, the activities of its tenants and other environmental conditions of which the Company is unaware with respect to its properties could result in future material environmental liabilities.