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COVID-2019, the previously non-identified and presumably new strain of coronavirus that emerged at the end of 2019, was declared a pandemic by the World Health Organization (WHO) Wednesday, March 11, 2020. As the outbreak continues and governments respond, commercial real estate owners and property managers should be prepared to monitor and address concerns impacting the real estate industry as a result.

Considerations for Commercial Landlords and Property Managers

A typical commercial lease and property management agreement does not address viral epidemics. The duties and obligations of landlords or property managers regarding limiting tenants’ and guests’ risk of exposure to the virus depend on what services, if any, the landlord or property manager provides at the property. In a net leased property where the tenant is responsible for its own maintenance and cleaning services, the landlord’s public health obligations would be limited.

However, a landlord or property manager who provides cleaning, janitorial and security services such as in a commercial office building or shopping center, should consider implementing the following operational recommendations:

•Consult the local jurisdictional health department and U.S. Centers for Disease Control and Prevention (CDC) for latest information on the virus, and best practices and guidelines for controlling virus transmission
• Routinely and frequently deep clean touched surfaces and objects, including but not limited to all entry and facility door handles and knobs, bathrooms, security desk areas, elevator bank buttons, turnstiles, escalators, communal kitchens or pantries, writing instruments, wayfinding touchscreens, “house” phones (keypads, mouthpiece/mic and receiver/speaker), bathrooms and the like
• Provide materials, in multiple languages, to educate employees, visitors, vendors, delivery personnel and staff about proper hand hygiene and cough etiquette
• Install hand sanitizer stations in high-traffic areas of the building
• Advise employees who may feel sick to limit face-to-face contact with others and to seek immediate medical help
• Consider alternatives and safety protocols for any gatherings or events held on building property, if they have not already been shut down by local health agencies
• Review internal communications and preparedness plan and ensure all building staff are ready, know their role in keeping the property, facility, and guests safe, and are aware of all communication protocols
• Maintain accurate, complete guest logs in case a potential COVID-19 carrier has entered the site, requiring notification of potential contact and exposure to others
• Follow Occupational Safety and Health Act (OSHA) requirements, set forth in Sections 13 and 14 of OSHA No. 1 of 2006, which impose various duties on the employer to ensure a safe and healthy work environment
• Discuss human resource considerations such as screening employees that have traveled to areas where the virus has been reported and implementing protocols for dealing with a situation where an employee may be infected with the virus
• Review leave policies and confirm compliance with legal requirements around mandatory quarantines
• Consider ongoing communications with tenants and service providers to inform them of the steps taken to clean and sanitize the property and learn how they are addressing the outbreak with their employees and customers
• Conduct risk assessment analysis and anticipate supply chain interruption
• Review any rights or remedies a property may have under policies of insurance, which may include coverage for business interruption
• Consult with counsel about the COVID-19’s impact on the property, contractual obligations and business operations.

If you have questions regarding a client’s current Commercial LRO policy, or need assistance in obtaining coverage, contact Novita Insurance Solutions.

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