Commercial Real Estate Building Security

Building security has always been an important issue in our industry for the usual and customary reasons. Liability and property damage risks and exposures were relatively defined. However, the events of 9/11/01 dramatically changed that paradigm and the way in which building security is viewed.

Warnings and alerts from government officials have suggested the possibility of terrorists using high rise buildings to assemble and/or detonate weapons of mass destruction. The implications of this are significant. In addition to conventional exposures, the scope of a potential loss has been expanded to include extensive interruption in business, increased litigation, and adverse public relations. In addition to the “target” building, surrounding properties would also be affected. Because of the amount and scope of information being shared by various agencies and media, there is “actual notice” of increased exposures to property owners and managers. This creates an increased standard of care or duty owed to take every reasonable precaution to protect tenants and unit owners from harm. While it is generally recognized that it is impossible to prevent all incidents of terrorism, there are steps that can be taken to mitigate the possibility of such an incident. Five specific areas to consider are:

• New tenants
• Service vendors
• Visitors/guests
• General security
• Communication

Following is a synopsis of the issues and suggestions on steps building owners and managers can take.

New Tenants

The Fair Housing Act requires that application and qualification procedures are consistent and non-discriminatory.

• Verify the identification provided by prospective residents.
• Require original documents, not photocopies, to prove identity.
• Verify prior addresses against credit, criminal, and reference checks.
• Resolve “gaps” in previous addresses of record.
• Verify the accuracy of visa and work history records provided.
• Note any individual or group renting multiple units at the same time.

Service Vendors

• A clearly defined and comprehensive procedure of “due diligence” should be undertaken to determine the integrity of vendors engaged by the building. Consider requiring contractors to screen their employees for prior criminal history, and have them bonded.
• Vendors engaged by a unit owner or tenant should be required to provide valid identification and purpose for all visits. Appointments and scope of work should be pre-confirmed with the unit owner or tenant.
• Management should inspect the work of vendors, particularly in non-public areas.

Visitors/Guests

• “Unexpected” visitors should be required to demonstrate the purpose of their presence and provide acceptable identification.
• No guest/visitor should be given access to the building without prior identification and approval of a unit owner or tenant.

General Security Measures

• Unit Inspections
  
  

  -	Do random inspections as permitted by law.
  -	Inspect all vacant units regularly.
  -	Be aware of prohibited materials or unauthorized occupants when inspecting common areas and grounds.
  -	Conduct daily tours of the perimeter.

  
  
• Be aware of students who do not attend classes.
• Enforce “no solicitors” policy.
• Tour parking lots for unauthorized or unattended vehicles.

Communication

• Employees
  
  

  -	Make all employees aware of the issues and procedures.
  -	Advise all employees and vendors to be observant of any suspicious behavior or activities.
  -	Report all incidents to the building management immediately.

  
  
• Residents
  
  

  -	Develop and issue an information letter inviting and encouraging residents to support and participate in building security by reporting anything unusual or suspicious.

  
  
• Law Enforcement/Government Agencies
  
  

  -	Be cooperative, but respect resident privacy.
  -	Report any suspicious circumstances or incidents to local or federal authorities.
  -	The USA Patriot Act provides protections to owners and managers who cooperate with law enforcement in terrorism investigations.

Summary

The issues and vulnerabilities discussed here aren’t new nor unique. What has changed is the increased importance of developing and following procedures, and creating a heightened awareness of the need for building security. If adequate policies and procedures are already in place, making sure they are operational and effective is critical. Here are some common elements that apply to all situations:

• Security policies and procedures should be designed, developed, and measured by senior level personnel with the appropriate levels of expertise.
• Senior management must proactively monitor this process.
  
• Policies and procedures need to be documented, communicated, and measured regularly in terms of implementation, understanding, and effectiveness.
  
• Security must be an equal among priorities and clearly communicated by senior management.
  
• Designated individuals must have responsibility and accountability for security at each location.
  
• All building personnel must integrate security into their daily responsibilities. Any unusual incident/behavior should be reported to building management immediately.
  
• Provide a written notice to all unit owners and tenants of the importance of their participation and cooperation in building security. Everyone should be aware of what’s going on around them and any unusual situations should be reported to building management.

While not a panacea for the complex and ever emerging challenges created by terrorism threats, implementing effective preventive measures can make a significant, positive impact on the ability to protect lives, property, and business. Please address questions or requests for a full copy of the NMHC building security bulletin to:

Claims Department
The Distinguished Programs Group
6 East 43rd Street, 15th Floor
New York, NY 10017-4609
888-355-4626
212-297-3131 (fax)
dpgclaims@distinguished.com