The creation and disposal of medical waste should be addressed in a lease for medical office space. Generally, medical waste regulatory acts define what medical waste is and establishes methods for handling and disposing of waste. Each medical entity that is subject to such the act is typically required to register with a state agency, such as the public health department, and have a documented medical waste management plan. These acts contain specific requirements for the packaging, containment, handling, disposal and incineration of medical waste. Regulatory requirements typically treat medical waste differently from that of hazardous wastes.  Accordingly, the types of hazardous wastes provisions in standard office leases usually include a supplement with a provision that specifically addresses medical wastes and the obligations of the landlord and tenant with respect to the disposal of the waste.

Commonly, the tenant that generates the medical waste is also liable for properly handling and disposing of the medical waste.  Careful drafting by an attorney is necessary to ensure that the lease properly delegates the responsibility for disposing of this waste.

Even when the landlord assumes the responsibility for removing the medical waste from the building, the tenant often is required to store the waste it has generated within the premises until the landlord’s medical waste disposal company picks up the waste for the building. These obligations must be carefully detailed. Tenants should consider requiring the landlord to hold the tenant harmless once the landlord takes possession of the waste, such as when the waste is placed in a common area designated by the landlord to receive medical waste.

A very critical aspect of identifying each party’s responsibilities is determining what is meant by “medical waste” or “infectious medical waste” as the obligations for handling each may be somewhat different. Generally, medical waste is a more inclusive than infectious waste.

A lease should require the tenant to immediately separate any medical or infectious medical wastes, upon production or generation, from other types of office waste and place such waste in a container that is marked “biohazard,” “infectious medical waste” or the like. The drafted lease can further specify that the container be leak-proof, moisture-proof, puncture-resistant, or has the strength to resist, tearing, ripping, or bursting in the course of normal usage or handling.

Landlords commonly prefer that the tenant contract directly with an appropriately licensed medical refuse company which operates in compliance with all federal, state and local laws, rules and regulations pertaining to the removal and destruction of medical waste. This limits the liability of the landlord should a tenant fail to remove medical wastes. Our office has seen landlords protect themselves by adding language regarding the failure of a tenant to remove medical waste whereby including a provision that gives the landlord the right to remove the medical waste and then bill the tenant for the costs of removing such waste.

If the landlord agrees to dispose of medical wastes generated by the tenant, then the lease may create liability for the landlord beyond just the care of the medical waste itself. Such liability is based on the landlord’s control over the premises. If the landlord allows medical waste to be stored outside of a tenant’s space, then the landlord assumes liability for the ultimate disposal of such waste. Thus, the landlord needs to give contractual control over the medical waste storage areas to the tenants and prohibit storage of medical waste in common areas or other areas under the landlord’s control.

Additional issues can arise upon termination of a lease if the tenant has not removed all of its medical wastes. Under a nuisance theory, a landlord may be liable for hidden dangers of which a new tenant has not been informed.

If landlord is responsible for disposal, it is imperative that the landlord provide such information to janitorial services in a building. The landlord needs to ensure that these workers are adequately trained to recognize the containers that are marked for medical waste and to avoid handling the containers marked for medical waste. Additionally, such workers should be informed to recognize medical waste that may have been inadvertently left open and how to place such medical waste in an appropriate container or more likely a scenario; notify the tenant to do so. Indemnification provisions should deal with this as well.

Conclusion

Given the danger of medical wastes to the lease space, property and community if improperly disposed by a tenant or landlord, our office recommends working with a knowledgeable medical real estate brokerage and attorney to assist with several strategies of dealing with consequences of medical waste on real estate transactions.