Whether it’s a brutal thunderstorm, hurricane or wildfire, there’s no shortage of natural disasters that can disrupt your operations. These severe weather events can have major effects on any business. But if you own or operate a multifamily property, there’s an extra layer of preparation to factor in: tenants’ needs.
How to prepare for natural disasters
Business resiliency best practices can minimize the impact of a natural disaster and help you:
- Address your renters’ evolving needs. “With more people working remotely, tenants’ needs may be different now,” said Nick Donohue, Head of Business Continuity, Commercial Banking, JPMorgan Chase. “Severe weather isn’t just disrupting a resident’s evening, but also their workday.” You may want to prioritize internet access along with water, heat and power, especially if many of your tenants work remotely.
- Shift to digital financial operations. Paper-based processes have many flaws: They’re time-consuming, often costly and leave you at greater risk for fraud. Plus, paper documents can easily be damaged or destroyed during a natural disaster. Consider upgrading your technology and adopting digital processes for rent payments, payables and receivables.
- Examine your vulnerabilities. Whether it’s outdated systems, inexperienced staff or structural concerns, take time to identify your weaknesses. Also, look beyond your immediate areas of weakness and consider the third-party providers you rely on, such as utility providers, and account for their vulnerabilities too. In many cases, you can reduce the impact of these weaknesses or even eliminate them prior to a business disruption.
- Prepare your staff and residents. Communicate with everyone at your properties to prepare for emergencies. Educate your staff on how to prepare for natural disasters and how to manage the potential impacts on your tenants. Best practices include developing evacuation routes and shelter plans, and conducting fire, hurricane, tornado and power outage drills. You can also ready residents for severe weather by distributing emergency preparedness information in advance.
- Protect yourself with insurance. Emergency preparedness includes obtaining property insurance. Commercial flood insurance can also protect your buildings; in some high-risk areas, it’s mandatory. Just as insurance can help you in an emergency, it can also help your residents. You can encourage—and sometimes require—them to purchase renters’ insurance when they sign their lease.
The Federal Emergency Management Agency offers resources to help you prepare for natural disasters and tips to minimize the impact of flooding, wildfires and severe winds, including:
- Regular maintenance, such as clearing gutters and sealing gaps in exterior walls and roofs with fire-resistant caulk
- Physical property changes, such as building a safe room, elevating your property and creating a fire-resistant zone around the building
- Interior and exterior updates, such as installing storm shutters, exterior wall coverings and flood vents
Put your resiliency plan to the test
Regular testing can take many forms, including manual or automated call tree testing and tabletop exercises. Tabletop exercises bring together relevant people across your apartment buildings—staff, third-party providers, tenants—to discuss how to respond to a specific disruption.
If a storm hits, damaging your property and leaving tenants without power, you may consider:
- Extent of the damage: Do you need to evacuate tenants or close off any areas? How long will it take to make repairs? Is the damage covered under your insurance policy?
- Contacting tenants: Do you have updated contact information? How will you reach tenants if they can’t access their phone or email? Do you have an alternative contact?
- Measures to take during a power outage: Do you know what utility providers to call for updates? Do you have a generator to use until power returns?
Conducting these tests on a typical day is important. “It helps build muscle memory, so your organization and stakeholders are ready if a disruption occurs,” Donohue said.
We’re here to help
Looking for more emergency preparedness guidance? Our Commercial Term Lending team can draw on extensive experience and local market knowledge to help you prepare for natural disasters and other disruptions with the right financial solutions for your business.
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