Wednesday, December 17, 2014

Commercial Landlord’s Liability For VOCs

Question: What are a Landlord’s obligations to reduce or eliminate VOCs (Volatile Organic Compounds) in commercial leases?

It is less a question of what a Landlord’s obligations are under the lease than what would be prudent. At the very least, the Landlord must comply with the evolving body of regulations governing indoor contaminants, including VOCs and be aware of the growing body of litigation brought by tenants and their employees seeking considerable damages and relief arising from the presence of VOCs in the premises.

VOCs are virtually everywhere and emitted in some quantities by much of what can be found in workplaces, even office plants. A common source of what may be excessive VOCs are Landlord’s standard improvements or tenant’s improvements installed by the Landlord. Common tenant improvements that contain VOCs are paint, carpet, drywall and spackle. There is no generally recognized standard among the manufacturers of paint or other products of what can be identified “No VOCs”. Advertised claims may not bear up under testing for detectable amounts. Moreover, improper cleaning of a VOC-bearing substance may make matters worse. Shampoo cleaning a carpet can release excessive VOCs but there is no guarantee that “steam cleaning” is necessarily an answer. VOCs could be released in greater volume, particularly if the contractor is not expert and implementing the proper technique.

An “as is” clause of general application in the lease and a general indemnity from the tenant is unlikely to completely insulate the Landlord from liability.

If a tenant alerts the Landlord of particular sensitivities and insists on certain products, the Landlord should consider a provision to the lease that might provide that the Tenant undertakes sole responsibility and liability for painting, spackling and carpet cleaning with an appropriate credit and indemnifies the Landlord from any claims brought by tenant’s employees. The products, contractors, processes and finish should be subject to the Landlord’s approval, with appropriate disclaimers regarding their efficacy.

The Landlord may want to consider, cost and time permitting, to start using Low-VOC or No-VOC products and appropriate cleaning procedures and cleaning products recommended by LEED or similar organizations. It may also be prudent to have a consultant take a reading of the premises to establish a baseline or identify what could be liability before a tenant occupies the premises.

As a final thought, the Landlord should prohibit in its lease tenants from using contaminating products or processes in undertaking any maintenance, repairs and improvements.
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