Do you know what your commercial tenants are doing with their grease?
By Jamie Gingell, Director of Commercial Property Management of Bluestone and Hockley Real Estate Services
Almost 15 years ago, as a newbie property manager, I received a scary letter from the fire marshal about one of the commercial properties in my portfolio. A recent fire inspection had discovered that my restaurant tenant had not been properly cleaning their kitchen exhaust system and there were disgusting pictures of the grease-caked exterior roof vent to prove it—and if it was that bad outside, the inside ducting and hood were surely in much worse condition. This was my introduction to the special needs of restaurant tenants while most leases make the tenant responsible for routine maintenance related to their use of the space, ultimately the landlord needs to protect themselves by verifying that maintenance is being done.
Cooking volumes in restaurants inevitably creates large amounts of grease. Most tenants have kitchen grease bins for used cooking oil, which go into a special collection. This is the most visible restaurant grease, but it’s not all of it by any means—the rest goes up in the air and down the drain, and in both cases this creates buildup that may cause issues for landlords down the line.
Up in the Air- Hood and Exhaust Vents
Commercial kitchens require ventilation systems—a hood above the cooking area, an exhaust fan on the roof or exterior wall and ductwork connecting the two. Over time, grease residue will build up on the inside, so regular cleaning is required for the whole system, not just the visible parts of the hood. Fire code calls for a particular frequency of cleaning, depending on the type and/or volume of cooking.
- Solid Fuel Cooking Operations (wood-burning pizza ovens, for example) – Monthly cleaning
- High-Volume Cooking Operations (24-hour or wok cooking)- Quarterly cleaning
- Moderate-Volume Cooking- Semi-annual cleaning
- Low-Volume Cooking (infrequent or seasonal use)- Annual cleaning
Landlords and their property managers should also pay attention to the exhaust cleaning vendor their tenants are using and the quality of work performed. I once took over management of a retail center where a long-term restaurant tenant had caused permanent damage to the roof membrane because their cleaning vendor would habitually blow the grease up and out of the roof vent, spattering it across the roof surface.
Down the Drain- Grease Traps and Sewer Lines
Even if a tenant is handling cooking grease properly and not deliberately pouring anything down the drain, some grease will end up there anyway (i.e. washing dishes, etc.). Grease traps will help keep fats and oils out of the sewer by giving them time to separate from water, but thorough cleaning on a regular basis is required; a grease interceptor stops working if it’s more than 25% full. The City of Portland requires food service establishments to establish and maintain a consistent cleaning schedule—not just “as needed”. Monthly cleanings are recommended, but the city grease inspector can require more if that’s not sufficient. Please visit the following link for additional information: https://www.portlandoregon.gov/bes/article/346862.
Don’t let the existence of a “grease inspector” lull you into a false sense of security—these systems are never 100% effective in any case, so over the long term you will need to keep an eye on your pipes. And while grease traps are required in new construction or tenant improvements, a long-term restaurant tenant may not have one in place at all.
The danger here may not be as extreme as the fire hazard in the ventilation, but a sewer backup due to grease buildup in the lines will cause a landlord considerable expense and frustration. These problems will only be magnified if other tenants in the building are affected—which is common since most multi-tenant retail buildings are not separately metered for water.
Tenant Responsibilities, Landlord Enforcement
Local laws and regulations require restaurant tenants to maintain all of these systems properly, but enforcement of these codes by authorities may come too late to prevent a fire or flood, so it is important to have a proactive enforcement program.
The first proactive step a landlord can take is to have a good lease agreement in place. The most recent BOMA (Building Owners and Managers Association) Retail Lease from 2018 specifically calls out maintenance of “grease traps and interceptors, and exhaust hoods and venting” as a tenant responsibility, in section 10(b)(vi). This section also specifies that the tenant is responsible for “repairs outside the Premises if the need for the repair arises from Tenant’s use of the Premises,” which is an excellent way to shut down arguments about charging restaurant tenants for jetting the shared building sewer line, or restoration costs for other tenants impacted by a sewer backup. If a restaurant tenant is coming up for renewal, one might consider moving to this new lease form. A special addendum regarding grease could protect you even further. A renewal negotiation is also an excellent time to evaluate the current system and to require tenants to install a grease trap if one is not already in place.
Next, your property manager should make arrangements with the restaurant tenant to provide proof of quarterly hood/vent and grease trap cleaning. Either their vendor can submit copies of service reports to you directly or the tenant can forward them. It is important to track service dates and have a scheduled reminder to request reporting from any restaurant that hasn’t yet provided it on schedule. Most property management software has a task tracking system for this purpose.
An annual preventive sewer scope is a relatively inexpensive way to buy peace of mind or to discover problems before they become emergencies. The cost can be charged to a restaurant tenant if an issue is identified and otherwise passed through in the building’s common area maintenance (CAM) charges as all tenants benefit from keeping the main sewer line clear.
Finally, pay special attention when restaurant tenants are moving out. All fixtures and equipment remaining in the space after moveout, including the full exhaust system and grease traps, should be professionally cleaned. A restaurant tenant ceasing operations can also cause sewer problems that weren’t previously apparent, due to hot water no longer flowing through their pipes, so a preventive sewer scope is a good idea.
Summary
Restaurant tenants cause grease and grease buildup can severely damage and even destroy your building if left unchecked. Requiring tenants to prove that they’re maintaining systems correctly is critical to a successful investment. Proactive administrative work on a routine basis could save tens of thousands in reactive emergency maintenance in the future!