Keep Tenant's Abandoned Wires from Cluttering Plenums and Risers

Chances are that many of the telecommunications and electric wires you've allowed your tenants to install over the years are now outdated and no longer in use. And chances are your tenants will never remove those outdated or unusable wires.

Now that practice is no longer acceptable, according to the latest edition of the National Electrical Code (NEC). The NEC, which was revised by the National Fire Protection Association (NFPA) in 2002 and went into effect on Jan. 1, 2003, requires the removal of abandoned wires—that is, wires that are no longer in use or expected to be used. They must be removed both from a building's “plenums” (the spaces where air circulates above the hung ceiling tiles or below the raised flooring) and “risers” (the vertical shafts or pipes in the building designed to enclose the building's electrical wiring) that aren't contained in a protective conduit or “metal raceway.” If your building doesn't comply with this new NEC requirement, which many states and localities have adopted as their building code, you risk fines—and you could be sued if the abandoned wires contribute to a fire at your building.

But making a tenant remove wires whenever it's no longer actively using them or at the end of the lease may be tougher than you think. If your lease is like many we've seen, it may not address removal of the wires during the lease or afterwards. Rather, it may only require that the tenant return the space to its original condition at the end of the lease and remove any installations it adds. So a tenant could argue, and a court could agree, that the lease doesn't require the tenant to remove its wires or pay any of the wire removal costs because the wires are in the plenums in the building's hallways and common areas and in the building's risers. And these areas aren't part of the tenant's “demised premises,” which the tenant is required to restore, nor are they really installations.

With the help of Washington, D.C., telecommunications attorney Gerard Lavery Lederer and New York City real estate and telecommunications attorney Jeffrey A. Moerdler, we'll tell you what problems abandoned wires can create. We'll also tell you why you should comply with the new NEC requirement, and how to get the option for removing, or requiring the tenant to remove, its wires when the tenant is no longer actively using them or at the end of the lease—at the tenant's expense. There's a Model Lease Clause on p. 4 that you can adapt and use in your leases that gives you this option.

To get a copy of the 2002 edition of the NEC, call the NFPA at (617) 770-3000 or go to http://www.nfpa.org and search for NFPA 70.

What's Abandoned Wire?

The NEC defines “abandoned wire” as any installed wire that's:

• Not “terminated at both ends at a connector or other equipment”—that is, not connected to either the main system or any equipment and thus not in use; and

• Not tagged or marked to identify the wire and where it goes to and comes from, so that it can be used in the future.

The types of wires covered by this requirement include telecommunications cables (copper, fiber, and coaxial cables), and fire alarm and power cables, notes Lederer.

What Problems Do Abandoned Wires Create?

Most office buildings have some abandoned wires, says Lederer. Wires are typically abandoned when:

• A tenant moves out;

• The owner or a tenant upgrades an electrical and/or telecommunications system; or

• Former service providers—such as cable companies, telephone companies, satellite or fixed wireless providers, paging and cellular companies, fire and security alarm companies, or Internet service providers—stop providing service in the building, go out of business, go bankrupt, or their service contracts expire.

Accepted practice has been to install new wires and simply leave the old ones in place, says Lederer. Removing and disposing of the old wires can be costly, he explains. And removal can disrupt or interfere with other wires currently being used—especially if the wrong wire is inadvertently cut, he adds. But as a result, some buildings now have such a tangled mass of wires that the ceiling tiles can't be lifted to gain access to the plenum.

Abandoned wires can create even more serious problems, says Lederer. Previously, wires in the plenums often weren't contained in protective conduit or in metal raceways, he explains. So there's concern that in the event of fire, the cloth or plastic coating on these outdated wires could facilitate the fire's spread.

Also, as more and more wires are installed, you may run out of plenum or riser space to accommodate new wires, or you may have too much unused spaghetti in the plenum, Moerdler says. The result: You may have to pay to install additional risers or remove unused wiring in the plenums or risers to accommodate a new tenant, he adds.

Why Comply with New NEC?

It's important that your building comply with this new NEC requirement for the following reasons:

Conform to state and local laws based on NEC. The NEC itself isn't legally binding, but it's frequently the basis for state and local laws, explains Lederer. In fact, the 1999 edition of the NEC was adopted by most states and incorporated in numerous local building and fire codes. And it's likely that the 2002 edition of the NEC will be similarly received, he says. So check with your attorney to see if your state or local government has adopted the new NEC, he suggests. When your state or local government adopts the new NEC—which it's likely to do if it hasn't already done so—you'll have to make sure your building complies with its requirements in the future, notes Lederer. Otherwise, you could face fines.

Protect against lawsuits if a fire occurs. If abandoned wires contribute to a fire in your building, someone could get hurt or property could get damaged or even destroyed—and you could get sued. A court will then have to decide if you were negligent. To do so, the court will probably compare your actions to the “standard of care” expected of building owners when dealing with abandoned wires, says Lederer. And the court may look at the new NEC to establish the national standard of care, he says. So if your building doesn't comply with the new NEC requirement, this could convince a court that you were negligent.

Satisfy insurer. Some insurers require the buildings they insure to comply with the NEC, notes Lederer. If your building doesn't comply with this new NEC requirement and abandoned wires contribute to a fire, your insurer may deny your claim for coverage of the costs, including any legal costs or damages you might have to pay, he warns.

Get Option to Require Wire Removal at Tenant's Expense

To prevent a tenant from abandoning old wires in your building's plenums or risers (or in the tenant's space), cover these 10 points in your lease, says Moerdler:

Require removal at your option. You'll want the option—but not the obligation—to have any or all of the tenant's wires removed when the tenant is no longer actively using those wires or at the end of the lease, says Moerdler. You may decide that some or all of those wires are valuable to you or to the next tenant and that you want to keep them. So give yourself a set time—say, 30 days—after the lease ends—or don't restrict yourself to a deadline if the tenant is no longer actively using those wires during the lease—to decide whether to keep any or all of the wires [Clause, par. a]. Getting this time gives you a better opportunity to make an informed decision.

The tenant may want you to make your decision before the lease ends or when the tenant submits plans for your approval when installing the wires. Depending on the tenant's clout, you may have to give in on this, says Moerdler. But you won't know at installation what wiring will continue to be useful when the lease expires, he notes.

Practical Pointer: If you decide to keep any or all of the tenant's wires in place, make sure that they're terminated at both ends at an appropriate connector or other equipment and tagged for future use, says Lederer. Otherwise, they'll be deemed abandoned under the NEC, he warns.

Get notice when wires become inactive. Since you don't want to be put in the position of policing the tenant's use of its wires, require the tenant to notify you, in writing, if and when it's no longer actively using any of its wires, says Moerdler. Also require the tenant to include with the notice a plan or other reasonable description of the type, quantity, points of commencement and termination, and routes of the wires so you can properly determine if you want to keep the wires, he adds. And have the tenant send you the notice and plan or description soon—say, within 30 days—after it stops actively using its wires so you can take appropriate action to ensure the new NEC requirement is complied with, Moerdler advises [Clause, par. b].

Practical Pointer: It's important to ask for an up-to-date wiring plan, Moerdler says. Your lease's alterations clause may have required the tenant to deliver plans for its wiring at the installation of the wiring and for any later changes to the wiring, he notes. But despite what the alterations clause says, in reality, tenants regularly change their wiring (for example, when installing a new phone system or rewiring their computer network) without giving owners updated plans, Moerdler says. So you can't rely on the plan that the tenant gave you when it installed the wires, he warns.

Get right to decide who does removal work. If you opt for removal of any or all of the tenant's wires, get the right to decide who will do the removal work—you or the tenant, says Moerdler [Clause, pars. a(ii) & a(iii)]. Otherwise, the tenant will want to make that decision. You may prefer to do this work yourself—especially if you're dealing with a tenant that has moved out of the space or is preparing to leave. There's no incentive for the tenant to do a complete or clean job—just a cheap one, Moerdler warns.

Require tenant to pay for wire removal. Make the tenant pay for all the costs of removing the wires, regardless of who does the removal work, suggests Moerdler [Clause, pars. a(ii) & a(iii)]. Don't let the tenant off the hook if you're doing the work.

Practical Pointer: Expect a savvy tenant to worry that if the work is totally in your hands, the costs will be excessive, says Moerdler. In response to this concern, you can agree to make the tenant pay for “reasonable” costs only, he advises.

Say you can hold security deposit if wires will be removed after lease ends. If the tenant's wires will be removed after the lease ends, give yourself the right to continue to hold the tenant's security deposit. You may need to use this security deposit if the tenant doesn't pay you for the cost of removing the wires, says Moerdler. So get the right in the lease to hold on to the security deposit until the earliest of the following events:

• You opt to keep the wires;

• The tenant reimburses you for the cost of removing the wires (when you're doing the work); or

• The tenant pays to remove the wires (when it's doing the work) and actually completes the work [Clause, par. d].

Practical Pointer: The tenant may want the lease to address what will happen if the lease ends and if your time to decide on keeping the wires expires before you make your decision, says Moerdler. For instance, the tenant may want the lease to say that you'll have to keep the wires and return the security deposit to the tenant, he explains.

Allow draw from security deposit. Make sure you can use the security deposit to reimburse yourself for the wire removal costs if the tenant doesn't, and to pay any fines imposed if the tenant's wires violate the NEC or any applicable laws, Moerdler advises. Get the right to reimburse yourself from the security deposit if the tenant fails to pay you within a set time—say, 30 days—after you've given it notice of the amount due and all the bills and receipts for the work, he suggests [Clause, par. e].

Get right to sue for unpaid wire removal costs. Don't let your access to the security deposit limit your right to collect all of the wire removal costs. You want the right to sue the tenant for the rest of the costs if the security deposit doesn't cover all of them, says Moerdler [Clause, par. f].

Require clear title to wires. If you decide to keep any or all of the tenant's wires, protect your ownership from any claims, says Moerdler. Have the tenant agree in the lease that in such circumstances the wires are yours and that the tenant will leave you with wires that won't be subject to a mechanic's lien or any other encumbrances [Clause, par. c(i)].

Say wires must be in good condition. Also, require the tenant to promise that it will leave the wires in good working order, properly labeled and capped or sealed, and in a safe condition, says Moerdler [Clause, par. c(ii)]. You don't want the tenant to leave you with unsafe or damaged wires.

Practical Pointer: A tenant may resist this promise because it may not want to be responsible if its wires are later found not to work, says Moerdler.

Have wire removal option “survive” lease. Since you'll want the wire removal option to continue after the lease ends, say in the lease that the option and all the obligations it imposes “survive” the end of the lease, says Moerdler. Otherwise, after the lease ends, the tenant may claim that the wire removal option is no longer in effect and refuse to fulfill its removal obligations or pay for the wire removal, he warns [Clause, par. g].

CLLI Sources

Gerard Lavery Lederer, Esq.: Miller & Van Eaton, PLLC, 1155 Connecticut Ave. NW, Ste. 1000, Washington, DC 20036-4320; (202) 785-0600; glederer@millervaneaton.com; http://www.millervaneaton.com.

Jeffrey A. Moerdler, Esq.: Partner, Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, PC, 666 Third Ave., New York, NY 10017; (212) 692-6700; jamoerdler@mintz.com.