Retain ‘Upscale’ Nature of Building

Q: The office building I own is located in an up-and-coming neighborhood that consists of retail, office building, and residential apartment properties. It’s a so-called “upscale” shopping and living area, and I’d like to keep the appearance of my building attractive. However, a prospective tenant needs to install rooftop equipment to make its business function in the space it would lease from me. It’s a valuable tenant, but I want to make sure its equipment doesn’t bring down the building’s appearance. How can I do this?

A: If your lease allows the tenant to install equipment on the roof of the building, make sure it also gives you the right to shield, or screen, the equipment in a way that’s acceptable to you. If your lease doesn’t give you this right, you could wind up with an unscreened and unsightly satellite dish, air conditioner, or other rooftop equipment that’s an eyesore.

Visible rooftop equipment can cause trouble for you. Simply letting tenants install their equipment–with no controls—could give them leeway to bring in large and unattractive items and could drive away other tenants and customers. You may also get complaints from neighborhood residents and businesses who don’t like the altered look of your roof. This is especially common in urban areas that are a mix of retail, office building, and apartment building real estate. If you try to force a tenant to remove the equipment, you can generally expect a tough fight. Not only does the tenant need the equipment to do business, but removal is very expensive.

Protect yourself from potential complaints by having the option to make tenants screen their equipment from view. Blocking a satellite dish or air conditioner with a screen or fence is a great way to make your building look better. But you’ll need to include language in the lease clause that deals with the tenant’s roof rights, which specifically gives you the right to demand the installation of a screen. Don’t rely on general language that says the tenant must abide by any requirements you establish. If you later tell the tenant to screen in the device, it may claim—and a court may agree—that the general lease protection doesn’t give you the right to demand the screen. So ask your attorney about tailoring the following language that outlines requirements for rooftop screening for a lease that allows a tenant to install rooftop equipment.

Model Lease Language

Tenant must install and pay for screen. If Landlord has granted permission for Tenant to use the roof for the purpose of erecting a [name equipment, e.g., satellite dish], and Tenant uses the roof for said purpose, Tenant, at its sole cost and expense, shall install any screening device requested by the Landlord at any time to ensure that the [name equipment, e.g., satellite dish] cannot be viewed by the public, and:

i. Screen must comply with all laws. Such screening device shall comply with all governmental and quasi-governmental laws, rules, and regulations, along with any requirements regarding the construction, maintenance, and removal of such device that Landlord may establish from time to time; and

ii. Prior approval of plans. Tenant shall obtain Landlord’s prior written approval of all plans and specifications for such screening device.