Keeping tenants taken care of, safe, and happy in their workspaces in an emergency is vital to successful property ownership.
Commercial lease space property ownership comes with a lot of responsibility for the health and safety of the building’s occupants. Natural calamities are inevitable. Some of these disasters follow a seasonal outbreak, while others hit without warning. As a landlord, you have many reasons to worry about your property. You should be able to protect assets, including the tenants, in case of a man-made emergency or natural disaster.
Houston and neighboring areas in Texas have their share of natural catastrophe risks – hurricanes, floods, wildfires, power outages, and winter storms. Unfortunately, these natural disasters are becoming increasingly frequent and posing a threat to damage property and buildings.
The National Oceanic and Atmospheric Administration’s (NOAA) statistics over the last 40 years indicate that the frequency of major disasters has increased by 203% in Texas. The cost of the damage is between $200-$340 billion. (Spectrum News Staff, 2022)
Record-breaking 22 billion-dollar weather and climate disasters that struck in the US in 2020
(Image Source – NOAA, 2021)
Natural disasters and a few other emergencies are only sometimes preventable. Still, the landlords can work to mitigate risks and, in turn, prepare to control the damages.
Here are a few ways to help everyone get through tough times and reduce the effects of natural disasters on your property, tenants, and their businesses.
- Checklist for Potential Threats
Different geographical locations face specific seasonal disasters. Texas is more prone to floods, Nevada is vulnerable to fires, Florida has hurricanes, California has earthquakes, etc. Knowing the type and its effects on the area can help narrow the action plan for your commercial property, offices, and tenants. Proactive risk management for landlords starts with tracking weather reports and updating all local emergency alerts.
- Check for Weak or Dying Tree Branches
Setting aside time to access the open areas around your property is essential. While those tall trees and their branches may not appear menacing, a heavy downpour or strong winds can create havoc. In a wind event, the risk of falling branches in driveways or directly on the building is high. Consult a local authority to follow the correct protocol for accessing these trees and attend to any limbs that may pose a problem.
- Safeguard and Secure
Check roof drains to ensure they are clear of debris. Remove any heavy equipment, obstruction, or other hazardous material from the roof or driveway and secure them safely away from the effects of wind or fire.
Removing the big trash cans and flower pots and anchoring large furniture or other items lying on the ground to a secure area is recommended during seasonal calamities. Keep a list of things handy in emergencies, like plastic sheets to cover the roof, sandbags to prevent water seepage, emergency food items in case the building is not accessible, backup water resources if stuck indoors, have on-hand battery-operated lights, emergency contact lists, etc.
- Effective Communication with Tenants
Keeping in touch with your tenants shows the humane side of your relationship. While the onus is not on the landlord alone to watch out for the property and people, transparent communication will encourage tenants to take responsibility too. You can send regular emails to your tenants advising them on the following:
- Keep necessary physical documentation in a secure facility and backup all digital files to avoid chaos during the emergency
- Keep a tab on weather forecasts and stock up on the supplies
- Avoid going out or on a road trip, especially during heavy storms or flood
- Keep emergency contacts in place and get in touch with the landlord as soon as you suspect any trouble in the building
- For new tenants, it will help provide an evacuation route in an emergency
Insurance
The most vital policy that every commercial landlord should consider is the commercial property insurance policy that covers critical elements like weather, fire, vandalism, and many other damages. While many landlords prefer buying a single policy for all their properties, others want individual policies and properties grouped based on occupancy type. Regardless of the category, if you own more than a single property, you must strategize with your insurance broker on structuring your insurance program. (Landes, 2022)
Many commercial real estate leases have a force majure clause for further protection. If a severe disaster strikes, a force majeure clause can temporarily put many of your obligations as a landlord on hold until the disaster is over and it’s safe to resume business. (Frank, 2022)
In addition, landlords can also encourage and may add a clause to buy renters’ insurance in the lease agreement.
Anticipating Post-Disaster Issues
Filing insurance claims is a crucial step post-disaster; depending on its type, you can expect a varied amount of assistance.
There is only an extent to which you can plan and protect your assets in an emergency. The landlords should be prepared for any unforeseen circumstances, like any significant damage to the building, water-logging within the space or outside, and more. In turn, discussing post-disaster issues and understanding landlord and tenant’s rights (extending the lease or terminating the agreement) becomes more manageable.
An Attentive Property Manager Is Worth Their Weight In Gold
Natural disasters and their aftermath can be devastating for both landlords and tenants. It’s even worse if the landlord has multiple commercial properties and needs someone to help deal with extreme situations. It can cause chaos and affect landlord-tenant relations.
An experienced property manager with sound local market knowledge can assist in preparing landlords and tenants for extreme weather conditions or disruptions.
For some businesses, remote working has changed tenants’ needs, and a seasoned property manager can help landlords address the evolving tenants’ needs.
Our team of locally qualified agents and property managers can assist you the best. Some of our services include:
- Property Management
- Tenant Representation – finding and closing the best commercial properties for the tenant
- Commercial/Industrial Space Brokerage – mixed-used offices and warehouse spaces
- Construction services for renovation and build-outs
Feel free to contact Oliver CRE at (281) 558-1111 to schedule an appointment.
Works Cited
News Staff, S. (2022, April 20). Natural disasters have skyrocketed in Texas, research shows. Natural disasters skyrocket in Texas. Retrieved February 5, 2023, from https://spectrumlocalnews.com/tx/south-texas-el-paso/news/2022/04/20/natural-disasters-skyrocket-in-texas
NOAA, S. (2021, January 8). Record number of billion-dollar disasters struck U.S. in 2020. National Oceanic and Atmospheric Administration. Retrieved February 5, 2023, from https://www.noaa.gov/stories/record-number-of-billion-dollar-disasters-struck-us-in-2020
Landes, A. (2022, January 23). A guide to commercial landlord insurance: What to know. LandesBlosch. Retrieved February 5, 2023, from https://www.landesblosch.com/blog/a-guide-to-commercial-landlord-insurance-what-to-know/
Frank, J. (2022, September 1). Council post: Natural disasters and insurance in commercial real estate: What owners need to know. Forbes. Retrieved February 5, 2023, from https://www.forbes.com/sites/forbesbusinesscouncil/2022/09/01/natural-disasters-and-insurance-in-commercial-real-estate-what-owners-need-to-know/?sh=5b9626b83ad6
