It’s been 10 years since East Central Florida has been hit with a storm so large that it had a name. All Eastern Florida residents are winding down from the emotional and devastating impacts of Hurricane Matthew. It’s hard to believe that 30 miles from the eye of the storm can be the difference between 90 to 140 MPH winds.
As commercial specialists, Team LBR has seen and dealt with the inner workings of disaster preparedness. We have interfaced with both property owners and tenants making last minute decisions of how to properly handle disasters as it relates to their place of business or investment. The commentary following describes commonly discussed issues for every natural disaster.
To Commercial Property Owners: Congratulations! You own an asset in Florida. It will be affected by a hurricane. Now you need to see how to protect your property should a disaster occur. How strong is the damage and destruction language in your lease? Do not glaze over this paragraph as it could have serious implications. Do you have an accurate rent roll with tenant emergency contacts that are up to date? Have you reviewed your windstorm insurance lately and budgeted for damage deductibles that are at times upwards of five percent of improvement values? Let’s do the math: For a $1,000,000 asset, five percent is $50,000 worth of damage before you can file for insurance. Have you test fitted shutters and hardware prior to the last minute install? PLEASE don’t call your leasing agent 10 hours prior to hurricane impact and ask them to put up your shutters because it will not happen.
To Tenants: Congratulations! You lease space in Florida. It will be affected by a hurricane. Tenants, do not assume a vendor is going to appear and put up shutters at your business. Negotiate in your lease document the Landlord/Tenant responsibilities to deal with disaster preparedness. Loss of power is a real concern. Plan for generator power rather than have to deal with loss of business. Tenant’s liability for damage and destruction in their lease can be a large cash liability. I have reviewed leases stating that the Landlord has rights to collect rent for six months even if the building can’t be occupied. Most leases don’t require the Tenant to have content insurance but it’s inexpensive and will give you piece of mind.
The above conditions are simple to avoid but will end up being fire drill items when unprepared.
To discuss disaster preparedness in more detail, please contact Team LBR and we will be happy to share our expertise.