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Commercial Landlords Shy Away From Tenant Vaccine Mandates

Oct. 12, 2021, 8:00 AM

A very long year and a half ago (although sometimes it feels like yesterday) we commuted daily through pedestrian and vehicular traffic and congestion, bolted through the elevator lobbies of our office towers, and arrived at our desks, often exasperated following frustrating and crowded commutes.

But we arrived safely, having touched without any thought every train grab bar, lobby door handle, and elevator touchpad, and having stood in overcrowded trains and elevators, shaken a few hands or kissed a few cheeks before sitting down at our desks unmasked. There were few, if any, hand sanitizer dispensers in the lobbies. No social distancing signs plastered on the elevator floors or office corridors. No limits on how many of us could jam into the elevators.

Once the pandemic started, landlords, owners, and property managers of the larger, more populated commercial towers moved relatively quickly to sanitize, preserve, and secure the healthy environment of the lobbies, elevators, and common spaces and corridors of these buildings.

Masked and gloved greeters are now opening the doors and directing inside traffic. Hand sanitizer stations abound. Distancing stickers appear throughout the buildings. And in many instances, property managers are issuing emails promptly and as necessary to their buildings’ tenants when Covid-19 cases arise on one floor or another, trying to get out in front of the chaos.

Now landlords, owners, and property managers will benefit from President Biden’s recent call for issuance of OSHA rules to mandate all businesses located in the U.S. with 100 or more employees to require their employees to be vaccinated (or fall within limited exemptions).

But there have been no publicized instances of commercial landlords issuing vaccine mandates. To date, landlords, owners, and property managers have been relying mostly on their tenants—large law firms, investment firms, accounting firms and commercial businesses—to police and secure their own premises and their own employees. Many large law firms are now requiring attorneys and staff to be fully vaccinated (with exceptions for health or religious reasons).

Why Commercial Landlords Are ‘Not Going There’

As I learned frankly in my conversation with a CEO of a prominent privately held national shopping center company, with more than $4 billion in assets and 20 million square feet of holdings, the burden of imposing or requiring vaccinations most likely will continue to remain with the employers, and not with the owners, landlords, and property managers for the office towers and shopping centers occupied by the commercial tenants.

He says, for several reasons, his company has not even broached the subject with their tenants about imposing or requiring the vaccinations of their employees, adding:—“it doesn’t even come up; we’re not going there.”

The chief reason my be the politicization of vaccines and masks. For example, in Florida, the governor issued an executive order in April 2021 (21-81) which states in part: “Businesses in Florida are prohibited from requiring patrons or customers to provide any documtentation certifying COVID-19 vaccination or post-transmission recovery to gain access to, entry upon, or service from the business.”

Commercial tenants may or may not be included in a definition of “patrons or customers.” But owners, landlords, and property managers certainly fall within the definition of “businesses.”

Another, more practical reason may be that commercial landlords with numerous properties cannot possibly police and enforce the vaccination status of every customer or patron who visits their properties.

Focus Remains on Building Sanitation, Mask Mandates

Likewise, a national property manager of large office towers informed me that the property management’s focus remains on diligently disinfecting and cleaning the towers’ common spaces, rather than instituting or imposing any vaccine requirements on the tenants.

Generally, owners of office buildings hire the cleaning crews to clean daily not only the common spaces but also the individual floors and workspaces of the commercial tenants (who pay for the cleaning services as a portion of their rent or additional rent, as agreed in their leases.) Property management firms generally would not have the prerogative or the authority to issue vaccine mandates to tenants unless directed to do so by the commercial landlords.

The owners, landlords and property managers will continue to take the lead in mandating masks in and around the common areas of the buildings, imposing social distancing directives, limiting the number of passengers in the elevators, and sanitizing the lobbies, hallways, office corridors and elevators. But there appears to be no swell of support for, or trend or push in, Florida, Texas, or any other state currently to spur the owners to issue policies requiring their commercial tenants to be fully vaccinated.

Maybe the owners do not deem it necessary currently to enter this fray, especially when large businesses (now with the watch of the president) are making the vaccine push and issuing the requirements to their own employees. Maybe the owners do not have the legal authority to make such requirements, given the existing written leases, and the lack of any specific pandemic/health-related guidance or references therein, which they previously had entered with their tenants.

(Most health and safety provisions set forth in commercial leases contemplate matters related to hazardous materials, fire protection and other “life safety systems” such as plumbing and mechanical operations, and not health and safety provisions related to, or specifically contemplating, viruses and diseases.)

Or maybe it’s too much of a political hot potato for the owners, many of which own portfolios throughout the U.S. and must deal with governors in several states who neither allow nor support such vaccine (and in some instances masking) requirements.

More law firms and other businesses are announcing (after several delays) their back-to-the-office target dates. How we navigate those elevator commutes and intra-office workdays nonetheless will pose an uncharted ride.

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

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Jeffrey Gilbert is a partner in Saul Ewing Arnstein & Lehr’s Miami office. He represents developers, real estate lenders, financial institutions, REITs, special servicers and receivers in property, real estate, financial and construction disputes.