By Janet M. Johnson
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Property Insurance for Work Letters A lease can require either the landlord or the tenant (or both) to carry property insurance on a building (and permanent improvements or additions to that building). Multitenant office or retail leases typically require the landlord to carry property insurance on the building and often will not require the tenant to carry property insurance on anything other than its machinery, personal property, and equipment. The lease, however, will typically allow the landlord to charge the tenant for the tenant’s pro rata share of the premiums for the landlord’s insurance through pass-throughs of operating expenses (or increases in a base year amount of operating expenses) or common area maintenance expenses. Janet M. Johnson is a partner at ArentFox Schiff LLP in Chicago, Illinois.
Published in Probate & Property, Volume 37, No 6 © 2023 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.
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November/December 2023
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The Most Important Things to Know When Insuring Lease Work Letter Construction Projects, Part Two: Property Insurance
his is the second part of a two-part article on insurance for construction projects under commercial lease work letters in which either the landlord or the tenant is responsible for engaging the contractor to perform the work. This part focuses on property insurance for commercial buildings (property insurance), including tenant improvements to a tenant’s premises (leasehold improvements). Part One focused on commercial general liability (CGL) insurance.
