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Social distancing is coming to a workplace near you. Will you be ready? Now that we have become acclimated to the norm of social distancing, it’s time to come outside. As such, businesses and employees of all stripes — from essential workers to the C-suite and beyond — must join the new normal.
One thing that comes to mind is that when a business property is put under a leasehold, it is based upon conditions at the time, agreements made between the landlord and tenant, and whatever zoning and other governmental regulations applied. Knowing the details and terms of your lease as they currently exist versus whatever governmental overlay and restrictions will be or have been mandated in response to the pandemic is a must. The impact on the value and usage of your business property is at stake.
The sophisticated property operator with a bevy of attorneys who, to the best of their abilities, crafted leases to provide for most common and some outsize occurrences should be well ahead of the game. But what about the rest of those who operate the real property?
For instance, what is your responsibility to visitors to the offices, common areas or other building areas? What about the contract and delivery personnel in and out of the property? As of this writing, those things are still being hashed out. There are various guidelines for reopening that vary with local governments, and the CDC has issued guidance for reopening businesses. I have no doubt that we will see temperature checks instated and cleaning practices increase. Property operators should be aware of and have a plan for interpreting social distancing and reconfiguration schemes that the local authorities or other responsible authorities come up with or suggest are necessary.
Another consideration is whether lenders or landlords have a say about any changes you may be directed to make. Do they have any approval rights? The first thing to do is take out your copy of your loan note or lease and read it. Look out for things such as government mandates and any references to occupancy, use, change of use, etc. Remember how you always said you would read these documents later? Now is later.
Management companies will need to let their tenants know what they will be doing in their properties to combat the virus and misinformation. People tend to fill in the void where there is no true guidance in a disaster. For instance, here in Los Angeles, the tenants of an apartment complex with 4,200 units felt insufficiently informed by their landlord and took things into their own hands.
You or your managing agent will need to get a tenant letter out to each tenant and post it in a public area on the property to share necessary information. Learn about any special needs any tenants have in this situation that relate to the property. List credible public resources numbers and links. Have on-site management (if applicable) contact each tenant. Call your management company to see what they have already been doing in this regard.
The CDC has provided sweeping recommendations that would drastically alter how people work in offices. Among the many things to be considered is how employees get to work. According to The Real Deal, “Guidelines suggest against using public transit and instead suggest employers incentivize commuting to work alone or via single-occupancy rides. The risk of using public transit may be reduced by staggering shifts. Workers should wash their hands immediately after making the trip.” If employees are urged to use single-rider ride-sharing and are given an incentive to do, so then that same thinking must be applied here for driving expenses and parking.
When employees return to work, make sure that your ship is clean and tight. At a minimum, look into several cleaning companies to see what they offer in this area. Thoroughly vet the contractor you choose. A well-known, reputable company that can put you on a cleaning contract is in order. For cleaning during the day, perhaps appoint a “cleaning czar” whose duty it is to ensure new cleaning procedures are being maintained.
I bring these considerations up because they impact your business and must be given thorough review. But most importantly, I would urge property operators to consult your legal counsel. According to a Buchalter report, “As more workers begin to return to the workplace, it is expected that there will be an increase in the number of lawsuits related to employee contraction of the virus in the workplace. While the general rule in most states is that the workers’ compensation system provides the exclusive remedy for work-related injuries and illnesses, claimants and their attorneys are eyeing exceptions to the workers’ compensation system in order to maximize their potential recovery.”
Landlords and tenants alike should avail themselves of information about their legal rights and responsibilities. It is imperative that each side of the lease focus on their respective interests and consult with an attorney where applicable.
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