Protect Your Space from Car Crash Damage

September 14, 2012
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An increasing number of shopping center robberies are carried out by robbers driving a vehicle through the front window of a store and stealing the inventory. Taking the following steps can help protect your business from being robbed.

Experts agree that—while physical barriers can go a long way toward protecting commercial property tenants from destruction—less tangible measures can go even further. For example, you can ask the owner to put up bollards—that is, the concrete, pipe-like constructions commonly seen protruding from the grounds around parking areas—near the center’s meters, and in areas that are getting hit by cars constantly. An alternative is to install large concrete planters. However, don’t encourage the owner to erect an unlimited number of physical structures to protect its center from reckless drivers and automobile-wielding vandals. That’s because owners shouldn’t take steps that impair the flow of car or foot traffic—you don’t want the building to look like a fortress! It has to be safe, but it can’t be unappealing.

You should assess your location’s risk. One of the most important steps a tenant can take to avoid becoming the victim of this kind of car-crash-related crime is to carefully assess whether the space it’s considering renting is appropriate for its type of business. When certain types of stores rent in the wrong section of a shopping mall, they can actually encourage criminal behavior.

For example, if a jewelry store leases space on a less-traveled side of a shopping mall that’s also less prone to police surveillance, you would be more likely to have somebody try to crash his car through that location to try to steal something than any other mall location.

You should also secure adequate insurance. The lease usually states who is responsible for recovering the money for the damages from the driver. That’s true whether or not the driver has insurance.

If the driver doesn’t have the financial means to cover the damage, the lease language will determine who’s responsible for certain sections of the commercial property. That is, the lease language will define whether the tenant or the owner is responsible for recovering damages from its insurer. Depending on who’s responsible for the damaged property, the tenant or the owner—or both—would look into what financial means the driver has in place. Is the driver able to pay? Is his insurance collectable? Is there enough insurance in place to make the damaged party “whole”?

A driver who recklessly or intentionally damages a shopping center may not have the insurance or the means to cover the damages. Therefore, for the appropriate party’s insurer to respond, it’s important to clarify which party is responsible for what property. For example, the tenant may be responsible for its store’s inventory. If that inventory is damaged, the tenant would file a claim for the damages with its insurer. The shopping center’s owner, on the other hand, may be responsible for the building’s structure. In that case, the owner would file a claim regarding structural damage.

You can draft common lease language that obligates the owner to repair the common areas, and the tenant to repair the “Premises.” In this common way of balancing the responsibilities, the owner would be obligated to repair the exterior of the building except the tenant’s storefront, and the owner’s repair costs are charged to the tenants on a pro rata basis as common area maintenance charges. The tenant’s obligation depends on the definition of the “Premises,” but that term usually doesn’t apply to the building’s exterior walls, just the tenant’s storefront.