Question: For a Commercial Landlord, What is The Coronavirus Disclosure/Action Plan Obligation?

By | March 16, 2020

The owners of office buildings, office parks, multifamily apartment buildings and other types of commercial property, find themselves facing decisions that they didn’t know existed two months ago!

With the spread of coronavirus, in the event that a management company and/or building owner is put on notice that a tenant or visitor is exhibiting symptoms or has tested positive for the illness, how should they respond?

On some level it’s a Solomon-like decision that requires balancing the health and wellbeing of building tenants, employees, visitors and building staff against the continuity of the businesses involved that occupy the building.

At the same time, how to address a coronavirus contamination is a significant decision that, if made wrong, could open-up an owner/management company to time consuming and expensive lawsuits.

The question below was posed on a real estate Listserv soliciting thoughts and opinions from other members.

Consider: ‘Should the landlord immediately direct that all activities in the building cease and that the building be evacuated for a period of quarantine and treatment?

A landlord who takes that action could be exposed to claims for loss caused by the inevitable business interruption. But a landlord who does not take that action could be exposed to even more serious claims, because they would sound in tort, if a building occupant does contract the virus.’

He goes on to ‘recognize that there are countless factors (e.g., the exact language of the lease, the availability of the business-interruption insurance, and the ability of the tenants’ personnel to work remotely) that could affect the legal analysis or the landlords’ risk-benefit calculus.’

Finally, ‘we’re in largely uncharted territory; before the events of the last several days, few if any of us had ever thought about, much less thought through, the issues presented by the choice that many landlords are now suddenly forced to make.‘ (William Maffucci)

One of the attorney’s on the Listserv provided a response from an actual owner/management company from an office complex that experienced a positive coronavirus diagnosis. This is the excerpt below:

REMEDIATION PLAN 

—, the building’s cleaning contractor, immediately responded to the situation on March 9, 2020, by disinfecting the affected area of the tenant space. 

The tenant stated the ———- Department of Health has been notified about the visit. 

As a precautionary step, building management has requested the janitorial provider to disinfect common area touchpoints since March 3, 2020 including door handles, elevator call and interior buttons, restroom fixtures, on a more frequent basis.

COMMUNICATION PLAN GOING FORWARD 

Building management will continue to monitor this emerging, rapidly evolving situation and provide additional updates as needed. 

Does the remediation and communication plan described above adequately address, from a legal standpoint, both the health, well-being and safety concerns of building occupants, staff and future visitors WITH the business continuity concerns of the companies occupying the building.

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