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Preparing for a Gas Leak On Your Commercial Real Estate Property

November 6, 2019

Proactive solutions to help CRE owners be prepared for a gas leak emergency

The humidity was thick this past July 6, very typical of summer weather in steamy South Florida. The combination of heat and a Fourth of July holiday weekend meant that business was a little slow in a Plantation, FL, shopping plaza. Fitness buffs were still getting in their morning workouts, however, and coffee drinkers were enjoying their lattes. And according to authorities, someone opened a natural gas valve in a closed pizzeria where the tenant had vacated the premises in December 2017.

Over the course of four hours, more businesses opened, parking spaces were occupied, and natural gas filled the space of the closed pizzeria. When the air conditioner clicked on, an electrical spark ignited the gas, creating an explosion that blew out walls, shattered windows, and crumbled ceilings. Debris rained down on customers inside of the various retail spaces, as well as on those walking through the parking lot. An ordinary summer day in a shopping plaza was anything but.

The explosion was a wake-up call

Sadly, 22 people were injured. In addition to the injured, the explosion has had a tremendous impact on the surrounding commercial real estate. Within days, many of the buildings impacted were determined to be unsafe. To date, only 8 of 25 that operated prior to the explosion have been able to re-open, and some customers have expressed fear about returning to the plaza. Owners of the shopping center, while vowing to rebuild, are facing huge logistical challenges as they work with local building officials and engineers to create a recovery/rebuild timeline.

In many ways, the consequences of the explosion can be felt very far from South Florida. For landlords and owners around the country, it was a wake-up call to take a look at their own properties, operating systems, and responsibilities.

Four ways a building owner can be pro-active

When it comes to owning and/or managing commercial real estate, it’s imperative for owners to protect their tenants, visitors, and investment. That’s common sense, pure and simple. To accomplish this, though, there are several proactive steps to take today that could very well help you tomorrow:

  • As part of the lease process, the landlord/owner is responsible for minimizing risk and liability. This means regularly scheduled inspections of key systems: locks on doors and windows, security systems and cameras, roofing, electrical and heating units, and smoke and fire alarms.

  • Similarly, leases also require the landlord/owner to maintain these same key operating systems and common areas, as well as to make repairs in a prompt manner. Adhering to a strong standard of maintenance enhances other areas of management as well, such as tenant, municipality, and insurance relationships.

  • Speaking of insurance, it’s a good idea to conduct regular reviews of insurance coverage. Generally speaking, CRE insurance has two components: property—which covers the building and its contents from fire, theft, and natural disasters—and liability—which covers bodily injury sustained by third parties on your property. (In addition, owners may also want to consider errors and omission insurance (professional liability insurance) for protection from mistakes or injuries that are incurred as a result of improperly rendering professional services.) Tenants, meanwhile, will also have their own insurance policies.
  • Not enough can be said about developing and maintaining strong relationships between owners and tenants. As part of this equation, owners and/or property managers are well advised to develop an Emergency Action Plan and to provide regular emergency preparedness training for tenants. In addition to preparing for a general crisis, such as neighborhood fires or hurricanes, comprehensive emergency preparedness training can help save lives during a property-specific event, such as a mass shooting on the premises.

Reaching out for assistance

Preparing for what may or may not happen can be a daunting—albeit necessary—task, and it’s not something that you need to do alone. The team at Morris Southeast Group can assist you in reviewing insurance coverage and lease terms, and our property management services stay on top of scheduling maintenance and repairs, as well as coordinating emergency preparedness training. To learn more about what Morris Southeast Group can do for you, call us at 954.474.1776. You can also reach Ken Morris directly at 954.240.4400 or via email at kenmorris@morrissegroup.com.

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