Practice Tip: Permitting Short-Term Access to Your Property

If a contractor requires access to your site for any reason, the temptation is great to allow the access without having the contractor sign a document outlining the terms and conditions relating to its access rights. This is especially true if the contractor is entering your property for just a few days or a shorter time period. The problem is that even in a few hours ' or a few minutes, for that matter ' an accident can occur on your premises and you can find yourself defending claims brought by third parties when you did nothing to cause the damage or injury.

Of course, practicality is important. On the one hand, you want to protect yourself from liability that you did not cause. On the other hand, you do not want to give the contractor a long or intimidating document that he or she will take to a lawyer and cause you to incur unnecessary legal costs negotiating an agreement. A simple solution would be to have both owner and contractor sign a brief letter agreement to cover the major issues that can arise:

• Identifying the site, name of the contractor, time the contractor is allowed to be on the site and activities permitted on the site;
• Providing that the contractor will indemnify, defend and hold the owner harmless for damage caused by the contractor;
• Requiring that the contractor take out insurance and provide the owner with an Insurance Certificate naming the owner as an additional insured;
• Stating that the contractor must promptly notify the owner if an accident occurs;
• Containing language protecting the owner from the dissemination of confidential information to outside parties; and
• Acknowledging that the party signing the agreement letter is an independent contractor.

Model Indemnification Letter

Reference is made to a water tower known as [insert name of location] (“Tower”) situated on a certain parcel of land located in [insert address of site] (“Premises”), which is owned by [insert name of owner]. [Insert name of company requesting access] (“Indemnitor”) is requesting permission to perform a “Drive Test” of the Premises and the Tower (“Permitted Activities”) on ______, 20__, to determine if it is practicable to construct, maintain and operate necessary telecommunications facilities on a portion of the Premises. The Permitted Activities shall consist of [insert activities contractor will be performing]. The testing process is expected to be completed within 2'3 hours. Indemnitor agrees that no other activities other than the Permitted Activities are authorized by [insert name of owner].

By acknowledging and accepting the terms set forth herein, Indemnitor hereby agrees to enter upon the Premises on the date(s) set forth above upon the following conditions:

Indemnitor hereby agrees, at its sole cost and expense, to indemnify, defend (by counsel reasonably satisfactory to [insert name of owner]) and hold harmless [insert name of owner] and its shareholders, members, partners, directors, officers, employees, consultants, contractors, subcontractors, agents, and invitees (collectively, the “Indemnified Parties”) from and against any and all actions, suits, claims, demands, causes of action, and proceedings for the full amount of all losses, costs, damages, liability, and expenses (including, without limitation, all attorney fees and disbursements) for any accident, personal injury, death or property damage whenever and by whosoever asserted, in any way arising out of, or relating to, or connected directly or indirectly with: (a) the performance of the Permitted Activities by Indemnitor or any of its employees, contractors, subcontractors, agents, or persons or entities acting on behalf or at the direction of any of the foregoing (“Indemnitor's Representatives”), (b) any business operation of Indemnitor in connection with the Permitted Activities, and (c) use of the Premises by Indemnitor or any of Indemnitor's Representatives. Indemnitor expressly accepts the Premises and the Tower in its “AS IS” condition.

In the event Indemnitor receives notice from any third party that a claim or lawsuit may be initiated against any of the Indemnified Parties in connection with (a), (b) or (c) above, Indemnitor agrees to give immediate written notice of same by certified mail, return receipt requested, to [insert name of owner's counsel].

Neither Indemnitor nor any of Indemnitor's Representatives shall commence the Permitted Activities as set forth herein until Indemnitor has delivered Certificates of Insurance evidencing the Required Coverage (as defined below) contained in this letter agreement and bearing notations evidencing the payment of premiums and coverage and amount approved by [insert name of owner].

Required Coverage, pursuant to this letter agreement, is as follows:

a) Indemnitor shall provide Worker's Compensation Insurance and Employer's General Liability Insurance as required under the Worker's Compensation Law. [This provision may differ depending on the State where located.]

b) Indemnitor shall maintain Commercial General Liability Insurance, listing [insert name of owner] as an additional insured, in the minimum amount of $2,000,000 on a combined single limit basis, with a company or companies licensed in the state where the Premises is located.

The policy of insurance for the Required Coverage must require a minimum of 10-day cancellation notice to [insert name of owner] via certified mail, return receipt requested, and endorse [insert name of owner] as an additional insured. The Certificate of Insurance must bear a notation of the 10-day cancellation notice as indicated above and endorse [insert name of owner] as an additional insured.

Indemnitor agrees that all reports, plans, studies, and other documents and materials (including underlying data) and all recommendations, whether written or oral, developed in the course of providing the Permitted Activities, are confidential between Indemnitor and [insert name of owner], and except as specified herein, Indemnitor may not reveal or disclose such work product, without permission from [insert name of owner], or unless ordered by a court of competent jurisdiction. No information or material shall be disseminated to the general public, the news media, or any person or organization prior to express approval by [insert name of owner].

It is understood that Indemnitor is an Independent Contractor and is not to be considered an employee of [insert name of owner], or assume any right, privilege or duties of any employee.

Kindly acknowledge your agreement to the terms hereof by signing below and returning a signed copy of this letter to me.

Sincerely yours,

[insert name of owner]

By:

Title:

I hereby certify that I have the authority to agree to the foregoing terms and conditions on behalf of the Indemnitor.

Accepted and agreed to:

______________________

By:

Title:

Conclusion

Although a simple indemnification letter agreement is a nice way to deal with most contractor short-term access requirements, it is not recommended that such an agreement be used when a contractor is performing any activities that could have adverse consequences relating to environmental liability. Having a contractor sign a more lengthy and detailed contract dealing with such matters would certainly be in order under those circumstances.

A word of caution: This letter agreement should not be used in all situations. Contractors rarely offer much resistance to the letter agreement described above. In most instances, a contractor wishes to enter a site and quickly carry out its purpose. Depending on the transaction and whether your own coverage is adequate, you might consider omitting the requirement that a contractor provide you with an Insurance Certificate if a contractor resists your request for this document. Although such a choice is a business decision, it also is a function of who the contractor is, how badly the contractor wants to enter your property and how long he will be staying there. In any event, it is important that you have an agreement that is signed by an authorized representative of contractor upon which you can rely on in the event the contractor causes injury to persons or damages your site.

Mark Morfopoulos, a member of this newsletter's Board of Editors, is a commercial real estate attorney in White Plains, NY.

If a contractor requires access to your site for any reason, the temptation is great to allow the access without having the contractor sign a document outlining the terms and conditions relating to its access rights. This is especially true if the contractor is entering your property for just a few days or a shorter time period. The problem is that even in a few hours ' or a few minutes, for that matter ' an accident can occur on your premises and you can find yourself defending claims brought by third parties when you did nothing to cause the damage or injury.

Of course, practicality is important. On the one hand, you want to protect yourself from liability that you did not cause. On the other hand, you do not want to give the contractor a long or intimidating document that he or she will take to a lawyer and cause you to incur unnecessary legal costs negotiating an agreement. A simple solution would be to have both owner and contractor sign a brief letter agreement to cover the major issues that can arise:

• Identifying the site, name of the contractor, time the contractor is allowed to be on the site and activities permitted on the site;
• Providing that the contractor will indemnify, defend and hold the owner harmless for damage caused by the contractor;
• Requiring that the contractor take out insurance and provide the owner with an Insurance Certificate naming the owner as an additional insured;
• Stating that the contractor must promptly notify the owner if an accident occurs;
• Containing language protecting the owner from the dissemination of confidential information to outside parties; and
• Acknowledging that the party signing the agreement letter is an independent contractor.

Model Indemnification Letter

Reference is made to a water tower known as [insert name of location] (“Tower”) situated on a certain parcel of land located in [insert address of site] (“Premises”), which is owned by [insert name of owner]. [Insert name of company requesting access] (“Indemnitor”) is requesting permission to perform a “Drive Test” of the Premises and the Tower (“Permitted Activities”) on ______, 20__, to determine if it is practicable to construct, maintain and operate necessary telecommunications facilities on a portion of the Premises. The Permitted Activities shall consist of [insert activities contractor will be performing]. The testing process is expected to be completed within 2'3 hours. Indemnitor agrees that no other activities other than the Permitted Activities are authorized by [insert name of owner].

By acknowledging and accepting the terms set forth herein, Indemnitor hereby agrees to enter upon the Premises on the date(s) set forth above upon the following conditions:

Indemnitor hereby agrees, at its sole cost and expense, to indemnify, defend (by counsel reasonably satisfactory to [insert name of owner]) and hold harmless [insert name of owner] and its shareholders, members, partners, directors, officers, employees, consultants, contractors, subcontractors, agents, and invitees (collectively, the “Indemnified Parties”) from and against any and all actions, suits, claims, demands, causes of action, and proceedings for the full amount of all losses, costs, damages, liability, and expenses (including, without limitation, all attorney fees and disbursements) for any accident, personal injury, death or property damage whenever and by whosoever asserted, in any way arising out of, or relating to, or connected directly or indirectly with: (a) the performance of the Permitted Activities by Indemnitor or any of its employees, contractors, subcontractors, agents, or persons or entities acting on behalf or at the direction of any of the foregoing (“Indemnitor's Representatives”), (b) any business operation of Indemnitor in connection with the Permitted Activities, and (c) use of the Premises by Indemnitor or any of Indemnitor's Representatives. Indemnitor expressly accepts the Premises and the Tower in its “AS IS” condition.

In the event Indemnitor receives notice from any third party that a claim or lawsuit may be initiated against any of the Indemnified Parties in connection with (a), (b) or (c) above, Indemnitor agrees to give immediate written notice of same by certified mail, return receipt requested, to [insert name of owner's counsel].

Neither Indemnitor nor any of Indemnitor's Representatives shall commence the Permitted Activities as set forth herein until Indemnitor has delivered Certificates of Insurance evidencing the Required Coverage (as defined below) contained in this letter agreement and bearing notations evidencing the payment of premiums and coverage and amount approved by [insert name of owner].

Required Coverage, pursuant to this letter agreement, is as follows:

a) Indemnitor shall provide Worker's Compensation Insurance and Employer's General Liability Insurance as required under the Worker's Compensation Law. [This provision may differ depending on the State where located.]

b) Indemnitor shall maintain Commercial General Liability Insurance, listing [insert name of owner] as an additional insured, in the minimum amount of $2,000,000 on a combined single limit basis, with a company or companies licensed in the state where the Premises is located.

The policy of insurance for the Required Coverage must require a minimum of 10-day cancellation notice to [insert name of owner] via certified mail, return receipt requested, and endorse [insert name of owner] as an additional insured. The Certificate of Insurance must bear a notation of the 10-day cancellation notice as indicated above and endorse [insert name of owner] as an additional insured.

Indemnitor agrees that all reports, plans, studies, and other documents and materials (including underlying data) and all recommendations, whether written or oral, developed in the course of providing the Permitted Activities, are confidential between Indemnitor and [insert name of owner], and except as specified herein, Indemnitor may not reveal or disclose such work product, without permission from [insert name of owner], or unless ordered by a court of competent jurisdiction. No information or material shall be disseminated to the general public, the news media, or any person or organization prior to express approval by [insert name of owner].

It is understood that Indemnitor is an Independent Contractor and is not to be considered an employee of [insert name of owner], or assume any right, privilege or duties of any employee.

Kindly acknowledge your agreement to the terms hereof by signing below and returning a signed copy of this letter to me.

Sincerely yours,

[insert name of owner]

By:

Title:

I hereby certify that I have the authority to agree to the foregoing terms and conditions on behalf of the Indemnitor.

Accepted and agreed to:

______________________

By:

Title:

Conclusion

Although a simple indemnification letter agreement is a nice way to deal with most contractor short-term access requirements, it is not recommended that such an agreement be used when a contractor is performing any activities that could have adverse consequences relating to environmental liability. Having a contractor sign a more lengthy and detailed contract dealing with such matters would certainly be in order under those circumstances.

A word of caution: This letter agreement should not be used in all situations. Contractors rarely offer much resistance to the letter agreement described above. In most instances, a contractor wishes to enter a site and quickly carry out its purpose. Depending on the transaction and whether your own coverage is adequate, you might consider omitting the requirement that a contractor provide you with an Insurance Certificate if a contractor resists your request for this document. Although such a choice is a business decision, it also is a function of who the contractor is, how badly the contractor wants to enter your property and how long he will be staying there. In any event, it is important that you have an agreement that is signed by an authorized representative of contractor upon which you can rely on in the event the contractor causes injury to persons or damages your site.

Mark Morfopoulos, a member of this newsletter's Board of Editors, is a commercial real estate attorney in White Plains, NY.