The situation
Illustrative example. Not a real job or customer.
A hypothetical single-story flex building near Commerce City is divided into six units, each with a small front office and a rear shop or storage area with a roll-up door. A fire starts overnight in a cabinet shop's finishing area in the middle unit and is put out by sprinklers and firefighters. The demising walls between units stop at the ceiling grid in the office areas, and smoke passes over them. By morning, the two neighboring tenants, a print shop and a small parts distributor, find soot and a strong odor in their spaces.
- The landlord's property manager is called by the fire department and arrives to secure the building.
- Each neighboring tenant photographs its own space before touching anything and notifies its insurer.
- The landlord's insurer sends an adjuster for the building; each tenant's insurer handles contents and business interruption separately.
- A restoration provider hired by the landlord assesses all three units, using wipe tests to map residue on each side of the demising walls.
- The print shop's presses are covered, and the tenant arranges a manufacturer's check before running them.
- The parts distributor sorts packaged stock; items with sealed packaging are cleaned, and open stock with odor is set aside for the adjuster.
- As part of reconstruction, the landlord's contractor reviews how the demising walls are built above the ceiling.
In this example, the two neighbors reopen in stages after cleaning. Coordinating three insurers takes longer than the cleaning itself. The landlord sends all tenants a contact sheet and a fire-door reminder afterward.
Who handled what in the example
| Party | Responsible for | Insurer involved |
|---|---|---|
| Landlord | Building shell, demising walls, roof, sprinklers, common systems | Landlord's property policy |
| Cabinet shop (origin unit) | Its equipment, stock and improvements | Tenant's own policy |
| Print shop (neighbor) | Presses, paper stock, office contents | Tenant's own policy |
| Parts distributor (neighbor) | Inventory and office contents | Tenant's own policy |
Decision points
- IfA neighboring tenant had started cleaning on its own before photosThenShowing the amount of residue to its insurer would have been harder.
- IfThe landlord's restoration provider had not mapped residue in each unitThenArguments about whose policy covered what would have dragged on.
- IfThe print shop had run its presses before inspectionThenSoot drawn into the machines could have caused further damage.
Questions for tenants of a shared building
- Do the demising walls go all the way to the roof deck, or stop at the ceiling?
- Does the lease say who arranges cleanup when damage starts in another unit?
- Does my policy cover business income if a neighbor's loss closes my space?
- Who is the landlord's after-hours emergency contact?
General information for Commerce City, not a quote or professional advice. In an emergency, call 911.