[co-author: Scott Renaud]*
This year, forecasters from the National Oceanic and Atmospheric Administration predict another above-average Atlantic hurricane season, which runs from June 1 through November 30. NOAA predicts between 14 and 21 named storms for the 2022 hurricane season, including 3 to 6 major hurricanes. . As of the date of this article, a system near Mexico’s Yucatan Peninsula could become the first named storm of the Atlantic hurricane season. Hurricanes and tropical storms are likely to have a negative impact on the real estate sector in the United States, and particularly in Florida, in the coming season.
According to a recent report by Yale Climate Connections, 2021 was the third costliest year on record for weather disasters, resulting in an estimated $343 billion in damages. To put that into perspective, 2021 alone was nearly as costly as the storms of 2016 to 2020 combined, which resulted in overall losses of just under $400 billion, according to The weather channel. If 2022 is as active as NOAA predicts, losses will likely be higher than ever this season when combined with ongoing supply chain issues and staggering oil prices.
In preparation for the upcoming hurricane season, Lowndes and Foundry Commercial have teamed up to provide some helpful tips for homeowners and renters.
- Insurance: Take a moment to gather your certificates of insurance and confirm that all coverage required under the rental agreement is in effect, including naming the appropriate parties as additional insured(s). For the tenant, don’t assume that the landlord’s insurance will cover your furniture, fixtures or equipment. Most landlord coverage is for the structure of the building, and the tenant is responsible for personal property and any tenant-specific improvements located within the leased premises. Landlords and tenants should also be aware of any lease provisions that specifically outline procedures for handling insurance payouts.
- Loss Provisions: The civil liability clause establishes the respective responsibilities of each party to repair the damage caused to the rented premises and/or to the building in which they are located in the event of total or, in certain cases, partial destruction. This provision may also include provisions relating to the reduction of rent in the event of prolonged loss of enjoyment of the rented premises.
- Provision of public services: In the event of loss of the public services of the rented premises, this provision may provide for a reduction in rent until the restoration of the service; however, many of these reduction rights are limited to the loss of services caused by the owner and may not apply in the event of a hurricane.
- Maintenance and repair: Examine the maintenance and repair clause of the lease to determine the respective obligations of the parties with respect to the leased premises and the systems serving them. The responsible party should schedule pre-season and pre-storm checks with their critical supplier response team, including catering, roofing, general contractor, electrical and soil, to name a few. some.
- To access: Work with your landlord and municipality to understand how post-storm access to the property and area will be administered. Some municipalities will restrict access to essential personnel after the storm and pre-registration with them is a crucial step.
- Technology: Take precautions to best protect your electronic assets from water damage. Any backups that may exist on the property should be moved to a safe location. Anticipate power outages by having car chargers for your phone, extra portable chargers, and critical hard-print contacts in the event of a network outage.
- force majeure: Many leases include a force majeure clause which can extend the time for satisfaction of an obligation in the event of a hurricane, tropical storm or other severe weather event. If a deadline looms for early September, landlords and tenants should consider whether a force majeure event may permit the extension or toll of that deadline and comply with any related advance notice requirements.
- Security: Experience tells us that many of the injuries caused by hurricanes occur after the storm has passed. When you return to your property, make sure you have the green light from property management and bring professionals with you to ensure your safety.
“As with any unpredictable weather event, planning ahead can take the stress out of many of the last-minute preparations and post-event impacts on the real estate you rent or own,” said Scott Renaud, director of operations at Foundry Commercial. “If we’ve learned anything from the past year, it’s the importance of being flexible and nimble – especially when it comes to office buildings – and approaching this hurricane season with plans to emergency will serve both tenants and landlords for years to come.”