While most leases hold the tenant wholly responsible for responding to site emergencies and for the protection of their employees, the landlord also stands to benefit from tenants who are well prepared for all types of emergencies. This can be particularly true when tenants store and use hazardous chemicals on-site, and when multiple tenants occupy a facility. In these cases, a proper response to a spill or a fast notification system can prevent a lot of problems affecting the building or property.

According to commercial insurance companies, the primary source of liability risk facing landlords today is the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) and its major amendment, the Superfund Amendment and Reauthorization Act of 1986 (SARA). Under the provisions of SARA, the government or private parties can bring recovery actions against responsible parties for clean-up costs incurred as a result of a spill of hazardous substances. CERCLA’s definition of “responsible party” is so broad that as a result even if the lessee is entirely the cause of pollution at a site, because a continuing contractual relationship exists between the lessee and the property owner, the lessor is denied “innocent party” status. In a number of cases, the landlord has been forced to pay the clean-up expenses and then recover their outlay as best they can from the tenant.

While the best line of defense for a landlord is still a strong lease agreement and regular site inspections, helping tenants prepare for emergencies can also be an effective way to reduce landlord liability, and is not expensive. Many commercial real estate companies are discovering the value of site-specific Building Safety and Emergency Response Guides. These guides usually provide the tenant with an outline of the types of emergencies they should prepare for, and also clearly outline the roles and responsibilities of all parties involved (can include tenants, building management, engineering controls management, security, etc.). The guides provide a basic framework on which the responsible parties can build a proper plan. The basic outline of a typical Building Safety and Emergency Response Guide is shown below:

Introduction