Accommodating Labor Union Tenant

Q: I’m considering renting space to a labor union tenant. Are there specific aspects of such a lease that I should prepare for ahead of time?

A: Before you rent space to a labor union tenant, make sure that you’re willing to agree to lease requirements that are unique to that type of tenant. There are three common things that you should expect during lease negotiations.

First, the labor union tenant may demand that the building’s janitorial staff be members of a labor union. Second, if the owner agrees to make alterations or improvements to the labor union’s space, the union is likely to demand that the owner agree to hire only union contractors to do the work. Third, the labor union tenant may demand that all other tenants in the building use labor union contractors, too. That would mean that the owner may have to give future tenants a larger tenant improvement allowance than it otherwise would have had to, since union contractors are typically more expensive than nonunion contractors.

For a discussion of unions in the context of restricting tenants’ use of contractors, see “Put Limits on Tenant’s Right to Hire Its Own Cleaning Contractor,” available to subscribers here.

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