As the COVID-19 vaccine rollout continues, and the rate of newly recorded infections is starting to decline, many California counties are moving to less restrictive tiers and lifting restrictions applicable to the business environment. A hot topic for many employers has been developing COVID-19 protocols and vaccine requirements for employees returning to corporate office buildings. (See “Can a Healthcare Provider Require Employees to Take a COVID-19 Vaccine?” for protocol guidelines.) Some healthcare businesses that utilize both traditional office space and medical office buildings are developing and incorporating COVID-19 protocols into their rules and regulations applicable to each site. For businesses who lease their work sites, however, as a tenant, do they have the right to enforce their new internal protocols and vaccine requirements on their landlords and vendors as a condition for entry into their leased premises?
Commercial lease agreements, including medical office building lease agreements, contain terms and provisions that have been negotiated between the landlord and tenant and as a result can be fact-specific. The rights available to a particular tenant with respect to enforcing COVID-19 protocols and vaccine requirements for entry into their leased premises will depend upon the terms of that lease. Given the specificity of the issues, if a healthcare tenant is contemplating whether to enforce any COVID-19 protocols or vaccine requirements on any party entering their leased premises, then we recommend consulting with a real estate attorney.
Each lease and tenancy should be evaluated on a case-by-case basis, however there are a few common issues that a tenant must consider when contemplating the right of enforcement of COVID-19 protocols and vaccine requirements:
- Landlord Right of Access: Most commercial leases include a provision granting the landlord the right to enter the leased premises. Often, this is to perform maintenance or other services, inspect the premises or show the premises to a prospective buyer or tenant. This provision may require the landlord to provide advance notice prior to entry. It may also grant the tenant the right to require that the landlord party be accompanied by a representative of the tenant at all times when entering the premises. These provisions often include an exemption for emergencies or the provision of routine services (e.g., janitorial and cleaning or repairs requested by tenant).
- Services Provided by Landlord: For leased premises within a building or project, the landlord often provides cleaning and janitorial service to the entire building or project, especially if the lease is written with “full gross” terms. If the lease requires the tenant to use the landlord’s janitorial service, this will restrict the tenant’s ability to opt out of any such routine services provided. Similarly, the lease may require the tenant to use the landlord’s vendors for routine maintenance and other services provided by the landlord.
- Premises: The attributes of the physical premises as well as the location may factor into the analysis. Considerations may include whether the tenant occupies an entire floor or building and the degree of control the tenant has over access to the premises (such as a separate key card system).
- Common Areas: Consider whether the tenant shares any portion of the premises with other tenants (such as common bathrooms, a shared break room, a cafeteria, a fitness center or other similar amenities). Then consider whether the landlord already has rules and regulations in place for the use of these areas that contemplate social distancing and other pandemic-related protocols.
- Additional Considerations: For tenants occupying a significant portion (or all) of a particular building, the tenant may have some leverage with the landlord regarding the rules and regulations applicable to the entire building. Furthermore, landlords are facing post-pandemic vacancy concerns. If a tenant’s lease is expiring and the parties are negotiating renewal, this may provide further leverage for a tenant to negotiate inclusion of the tenant’s COVID-19 protocols, vaccine obligations and other access requirements as part of the lease extension and/or amendment. (See “Dealing with Excess Office Space in a Post-Pandemic World” for more information on the current state of real estate leases.)
As California counties continue to lift COVID-19 workplace restrictions on businesses, employers will need to ensure they implement policies to protect the health of their workforce. Most employers have been focusing these efforts on regulating employee activities. However, by reviewing the terms of their lease, they may find that they can offer a greater level of protection to their employees.
Natalie Maples advises clients on a wide spectrum of real estate transactions. She counsels and negotiates on behalf of clients on issues related to site acquisition and development, land use, leasing and ground leasing and due ...
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