Tenants may insist on the right to install special equipment on the roof of the building so they can operate their business within the space they lease from you. While resisting these demands may drive away prospects, you also need to impose certain controls to protect not only the building’s infrastructure and utilities consumption but also its aesthetics. Among other things, reserve the right to make the tenant physically shield or screen the equipment so that it doesn’t create a public eyesore that mars your building’s image and appearance.  

Problem: Unsightly Tenant Rooftop Equipment Can Harm Your Business

Solar panels, cooling towers, antennas, electrical cabling, generators, and other rooftop equipment that businesses rely on tends to be large, bulky, and unattractive. So, giving tenants carte blanche to install whatever rooftop equipment they deem necessary may turn your swan of a building into an ugly duckling that drives away prospects, tenants, and customers, especially if the property is located in an upscale neighborhood. But once that equipment is in place, getting the tenant to remove it will be neither simple nor inexpensive. Forced removal of essential business equipment may also constitute a material default under the lease, allowing the tenant to stop paying rent, leave the space, and sue you for damages. 

Some landlords try to guard against these risks by imposing restrictions on the equipment’s height—for example, no higher than the building’s parapet. But trying to anticipate how high equipment can go isn’t always a practical strategy. Thus, while a parapet-based height maximum might shield the equipment from public view, it may be too low to accommodate the equipment the tenant needs. 

Solution: Get Right to Screen Tenant’s Equipment

A better strategy for preserving building appearance is getting the right to have the tenant block rooftop equipment from public view by installing a screen, fence, or other physical barrier. But you need to expressly provide for such screening, attorneys caution. Simply relying on general lease language that requires the tenant to comply with the rules governing building use and appearance that you establish may not be enough. “There’s no assurance that a court or arbitrator will interpret this provision as requiring the installation of physical structures like fences and screens,” notes a Miami attorney. 

How to Draft an Effective Lease Clause

Make sure your rooftop equipment screening lease clause, like our Model Lease Clause, includes at least the following three protections:

1. Tenant must install screen at its sole expense. Require the tenant to install the screening devices or structures the landlord demands at its sole cost and expense. If you have in-house contruction staff, you may want to require that they do the work and specify that the tenant will reimburse you. However, you may also have to agree to share some of the costs if the tenant is in a strong negotiating position [Clause, par. 1].

2. Screen must comply with all applicable laws. State that the installation, construction, use, maintenance, repair, and removal of required screening devices or structures must comply with all applicable governmental and non-governmental laws, regulations, rules, and standards, as well as the rules that the landlord may establish. Don’t be surprised if tenants demand that you insert the word “reasonably” before “establish” [Clause, par. 1(a)].

3. Landlord must approve proposed screen in advance. Make the tenant get your written approval of all proposed screening devices and structures before installing them. Otherwise, the tenant may end up installing a screen, fence, or other structure that’s even uglier than the equipment it’s intended to conceal [Clause, par. 1(b)].