Helping Commercial Tenants Prepare for Emergencies Makes Business Sense
by Robert Foster
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:
Outlines roles and lines of authority in the event of emergencies
- Site specific information regarding activities, security, engineering, facility management
- Provides critical contact information
For multi-tenant facilities, provides contact information and roles/responsibilities of coordinators in all companies
- Real estate contacts
- Tenant contacts
Site Securities and Control
Briefly defines security's role during an emergency
Evacuating the Site
Decision process for evacuation of the site
- Responsibility for decision-making
Evacuation of tenants
- Decision to evacuate
- Evacuation notification
- Evacuation procedure
- Evacuation of surrounding community
- Facility evacuation routes
General emergency equipment
- Tenant recommended emergency equipment
Emergency Notification and Spill Requirements
Notification of federal, state, or local agencies
Post-Emergency Operations, Critique, and Follow-Up
EH&E has helped landlords develop customized templates for Emergency Response Guides that can be used with a simple questionnaire to quickly produce a site-specific document for each template. The guides are often used as selling tools by the landlords since they often save the tenant valuable time gathering local information to complete their own required Emergency Action Plan (EAP).
Each guide is typically reviewed and updated yearly, and the exercise often proves useful to both tenant and landlord in reviewing site and procedural changes that require adjustments to response plans. Helping commercial tenants prepare for emergencies through the use of a simple Building Safety and Emergency Response Guide is an exercise that is becoming a common practice in many leased commercial buildings. For more information about how EH&E can help you develop a guide template for your facilities, contact Bob Foster at firstname.lastname@example.org.
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