Craig S. Coan

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Curbing COVID-19 - Considerations for Property Owners, Landlords and Tenants

March 13, 2020Client Alert

As the COVID-19 virus continues to spread and stringent (yet necessary) restrictions begin to impact our daily lives, property owners and landlords should consider implementing further measures. In order to best manage the emergency and maintain business continuity, even as uncertainty looms, landlords and property owners should consider the following:

  1. Stay Informed. 

In order to combat the virus, one should first understand the situation.

a. Consult the Interim Guidance for businesses and employers published by the Centers for Disease Control and Prevention (“CDC”) for up-to-date information.

b. While media outlets may be reporting the same facts differently, go straight to the source for crucial preventative measures to combat the COVID-19 virus.

  1. Evaluate Risks and Prioritize Your Response. 

Whether for a 2MM square foot high-rise office building with thousands of tenants or a duplex with two tenants, a measured and calculated response can help address both containment and continuity.

Evaluate the range of risks to your property, tenants, and on-site staff in the event of a COVID-19 outbreak. Aside from the risk of tenants becoming infected, consider the other types of disruptions that might ensue. This could include security staff calling in sick or the cable company being unable to service local lines.  Implementing a contingency plan means knowing what to plan for.

  1. Take Preventative Precautions.

a. Vigorously keep common areas clean using the EPA recommended cleaning disinfectants.

b. Reach out to building vendors to inquire about their own disease management measures and ability to provide services in the event of personnel shortages.

c. Review relevant language in key lease documents and service contracts to determine the distribution of preparedness, response, and remediation costs among landlords, tenants and vendors.

d. Encourage tenants to implement “social distancing” by eliminating non-essential visitors, cancelling in-person events, limiting in-person group meetings, and restricting travel.

e. Advise tenants to restrict access for visitors who have been or may have been exposed to COVID-19 or have recently traveled to countries designated as high risk by the CDC and/or the World Health Organization. 

f. Given today’s technological infrastructure, many businesses, including Greenberg Glusker, can have employees work remotely without compromising service. In short, encourage everyone to determine which meetings could be handled via conference calls or emails.

  1. Implement Appropriate Responses.

a. Upon learning that a tenant, guest or staff member has tested positive for the virus:

i. inform all building tenants of the incident, but maintain confidentiality as required by the ADA;

ii. take steps to notify others who may have been exposed to the infected individual; and

iii. consult with CDC and local health authorities to determine further appropriate precautions (i.e., closing the office, encouraging “social distancing” and working from home, or performing detailed cleaning of the impacted area as well as a building’s high traffic areas using the EPA recommended cleaning disinfectants).

b. Employers responding to a confirmed case in their workplace should consult our Employment Law Group's guidance available here.

  1. Consider Necessary Accommodations for Financial Impacts on the Horizon

a. While the coronavirus outbreak’s immediate effects have become evident in the financial markets, plunging the U.S. stock market into “bear” territory, it’s important to put long-term issues into perspective now. If the government enacts extraordinary measures requiring the cancellation of public gatherings or closing of businesses (as in Italy), landlords and tenants will be forced to confront challenging economic impacts.

b. From a tenant’s perspective, a forced governmental closure might warrant consideration of whether “business interruption insurance” would be triggered.

c. As for landlords, tenants impacted by this outbreak may fail to pay all or a portion of their rents.  At least one California landlord has already said it will not evict tenants if they can prove their failure to pay rent was related to the coronavirus. Alternatively, other landlords may choose to defer a portion of current rent. Creative and empathetic approaches may help ensure long-term success.

Given the rapidly changing circumstances, we encourage property owners and tenants to heed the guidance of public health officials and incorporate common-sense precautions to prevent a further spread of COVID-19.  While this article presents a brief outline of issues to consider, we at Greenberg Glusker remain committed to assisting our clients as we all continue to navigate through the disruptions caused by this pandemic.

Should you have any questions or need for fact-specific advice, please do not hesitate to contact our attorneys at Greenberg Glusker.