United States: Is Your Lease Ready For The Pet-Friendly Workplace?

The arguments in favor of a pet-friendly workplace are appealing. Pets are said to improve employee morale, lower stress, foster creativity, increase productivity (no more leaving early to let the dog out) and boost the recruitment of young talent. Employers wishing to offer this amenity would be wise to mention this at the outset of lease negotiations because most leases specifically prohibit animals other than service animals.

Whether the landlord will even entertain the idea depends on myriad factors, including the building location, the tenant mix, the type of tenant finish and whether allowing pets will offer the landlord a competitive advantage in the market. Most tenants attempting to negotiate a pet-friendly lease will find the landlord firmly in the driver's seat. Here are some issues that the landlord and tenant will likely discuss.

Insurance Coverage – Landlord. The landlord will initially need to examine the scope of its own insurance coverage. A landlord typically owes a duty to its tenants and the general public to maintain its building in a safe condition. If a dog attacks occupants or guests of the building, the landlord could be held liable. Although the lease is likely to require an indemnity from the tenant (see below), the landlord will want to make sure that allowing pets in its premises will not result in the denial of coverage.

Insurance Coverage – Tenant. It is imperative that a tenant confirm that it is covered for both personal injury and property damage caused by animals in or about its premises (including the common areas.) The landlord should require a certificate of insurance that verifies such coverage.

Indemnification. The tenant should expect to indemnify the landlord from and against all damages or injuries caused by pets. The tenant will need to make sure that its insurance covers an indemnity of this type.

Security Deposit and Other Charges. The tenant that allows pets in its premises should expect to pay a greater than market security deposit. The amount may be determined, in part, by the improvements in the premises. For example, a carpeted floor is more susceptible to pet-related damage than a concrete floor. In addition, the tenant might be required to pay more than its pro rata share of janitorial charges. The cost of flea or other pest control in the premises should be borne by the tenant. If the presence of animals in the common areas necessitates pest control, the cost should be borne only by the tenants that allow pets.

Compliance with Laws. Leases typically require a tenant to comply with all federal, state and local laws and ordinances. Landlords and tenants introducing animals into commercial space will need to pay specific attention to all laws and ordinances that could possibly be relevant. It is incumbent on the tenant to research the laws and ordinances and present to the landlord a plan to comply with all of them. While the tenant has likely considered possible allergies and phobias among its own employees, the landlord and tenant should also consider the possibility of complaints by other occupants and guests of the building. Query whether requiring an allergic or phobic person to share common space with an animal could draw an ADA claim against the landlord.

Landlord's Right to Rescind Permission. At some point, the landlord may decide that having pets in the building just isn't working out. The landlord will likely insist on the right to rescind its permission to allow pets in the building. The tenant may request that the rescission be only for cause and that several warning letters with an opportunity to cure be given before rescission.

Building Rules and Regulations. The rules and regulations in the landlord's existing lease template might arguably be sufficient cover some of the issues that might arise. Nonetheless, it is advisable to incorporate additional rules drafted specifically to address pets in the building. The following is a non-exhaustive list of rules that might be included:

  • limiting the pets only to dogs and/or pets under a certain size and/or excluding certain animals or breeds.
  • limiting the number or frequency of pets in the premises (for example, only on Fridays and/or no more than three pets on any given day).
  • requiring that pets be leashed at all times in the common areas.
  • designating a specific pet relief area and imposing rules as to clean up.
  • specifying that barking excessively or otherwise showing aggression is a nuisance that allows the landlord to immediately require the removal of the pet, impose fines and/or declare an event of default.
  • requiring evidence of vaccinations and flea treatment for all pets entering the premises (but query whether it is wise for the landlord to get involved in this way).
  • restricting pets from certain of the common areas or amenities (for example, the coffee or sandwich shop).

Tenant Pet Policy. A tenant requesting a pet-friendly lease will no doubt have already thought though the impact of pets in its offices from the standpoint of its employees, clients and guests. The tenant should provide a fully developed pet policy to its landlord and offer to make its enforcement an obligation under of the lease.

Note Regarding Service and Emotional Support Animals. The law related to service and emotional support animals is beyond the scope of this article. Under the ADA, places of public accommodation must be modified to allow the use of service animals in the common areas. Landlords may not require an extra security deposit for a service animal in the workplace. The ADA does not, however, require the landlord to permit "emotional support" animals. In the most general terms, a service animal is trained to perform certain tasks while an emotional support animal provides comfort or companionship. Note, however, that under the ADA, a landlord is not permitted to ask about the nature or extent of a person's disability. Please consult qualified counsel with questions regarding compliance with the ADA and similar state and local laws.

Conclusion. In most areas, pet-friendly multi-tenant buildings are not the norm. The tenant that wants to establish a pet-friendly workplace should commence negotiations with the landlord well-armed with research, insurance coverage, a comprehensive pet policy and a willingness to compromise.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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