So There Was A Fire At Your Workplace. Now What?
Most commercial leases relieve landlords from liability for any damages occurring inside of the leased space, leaving the burden of restoration on the tenant.
Did you know that I moonlight as a firefighter, extinguishing flames wherever I can? No…I don’t mean that I literally put out fires, as exciting as that would be. A big part of what a great real estate advisor does for their clients is problem-solving and finding solutions to their business challenges. Here’s a story about how “putting out fires” got literal for us with one of our clients.
This client’s leased retail space caught on fire. A large area of the premises was damaged, and space was basically left unusable. The culprit? The building’s heating and air conditioning system, according to the fire department.
Unfortunately for our client, most commercial leases relieve landlords from liability for any damages occurring inside of the leased space, leaving the burden of restoration on the tenant.
The client started by contacting their insurance company to file their claim and had a claims adjuster bid the cost of repairs. To top it all off, upon doing so, they learned that their insurance policy was not sufficient to cover the restoration of flooring and walls as well as the contents that had been damaged. In addition, the estimated timeline for returning the leased premises to a functional location was estimated at 90 days, which added significant business interruption to the already costly repairs which would be needed.
While our client deals with these challenges, we are working with them to find a replacement space that better suits their needs and will allow them to reestablish business operations at an accelerated pace. Although staying within a short timeframe is key for them and a physical location is incredibly important to any retail business, the real purpose of sharing this story is to highlight the significance of having an advisor to ensure your business has covered all its bases.
So, what’s our advice if a fire occurs in your workplace?
Call your insurance agent. Do you know how your current insurance coverage measures up to what your needs would be in the event of unforeseen damage?
Have a commercial real estate advisor review your lease to help you understand your landlord’s obligations.
Feel free to reach out to us if you need help in reviewing your lease. We are happy to assist in putting out your fires in any way we can!