Commercial Landlords Subject to New Accessibility Disclosure Requirements

Commercial Real Estate by Ashlee D. Gonzales, Esq.

Multiple attempts have been made by California legislators in the past several years to limit the growing number of predatory Americans with Disabilities Act (“ADA”) lawsuits in California, whereby landlords and business owners are being sued for ADA accessibility violations. According to U.S. Congressman Ken Calvert, California has 40 percent of the nation’s ADA lawsuits, but only 12 percent of the country’s disabled population. California legislators’ task is difficult, given that they must walk a fine line between limiting the abuse of ADA accessibility claims and ensuring the disabled achieve equality under the law.

Earlier this month, Governor Jerry Brown approved Assembly Bill 2093 (“AB 2093”) in an effort to counter the growing number of suits. AB 2093 is an extension of Senate Bill 1186 (“SB 1186”), passed in 2012, which requires commercial landlords to disclose to prospective tenants whether their property has been inspected by a California Certified Access Specialist (“CASp”). SB 1186 was passed with the intent to initiate the ADA compliance conversation between landlords and prospective tenants.

AB 2093 bolsters SB 1186’s objective by expanding the disclosure requirements for construction-related accessibility. For leases or rental agreements executed after January 1, 2017, the commercial lessor will be required to disclose to a prospective tenant whether or not the property has been inspected by a CASp. Depending on the property’s accessibility inspection history and ADA construction-related compliance, the lessor’s disclosure requirements change.

If the commercial property has been inspected by a CASp, and meets current construction-related accessibility standards, the lessor must provide a copy of the current CASp certificate and inspection report to the prospective tenant. AB 2093 expands SB 1186, by allowing the prospective tenant to obtain a copy of the CASp certificate, rather than merely requiring the lessor to mention the existence of the certificate in the lease. This requirement will provide assurance to prospective tenants that the commercial property is in compliance, and lessen the likelihood of being upended by an ADA lawsuit.

In instances where the commercial property has been inspected by a CASp, but has not been altered or modified to meet ADA requirements, the landlord must provide a copy of the inspection report to the prospective tenant at least 48 hours before the execution of the lease. The 48 hour disclosure period will allow for the prospective tenant to decide whether or not they want to enter into the lease, and should they decide to, to negotiate with the landlord regarding the assignment of responsibility for any necessary repairs. AB 2093 establishes the presumption that repairs necessary due to non-compliance are deemed the responsibility of the landlord, unless contractually agreed to otherwise. This reform encourages commercial property owners and tenants to proactively handle compliance problems, instead of being forced to deal with them as the result of an ADA lawsuit. If the inspection report is not provided, the tenant will then have 72 hours from the date of execution to rescind the lease or rental agreement pursuant to the information contained in the CASp inspection report.

When the commercial property has not been inspected by a CASp to assess accessibility compliance, the lessor must state in the agreement or lease that, upon request by the prospective tenant, the commercial property owner cannot prevent an inspection. Additionally, if an inspection is requested by the prospective tenant, the parties must then mutually agree as to the time and manner of inspection, payment of applicable fees, and the cost of making required repairs.

Many property owners, business owners, and local residents are curious to see how effective this new bill will be. Given that ADA violations result in thousands of dollars in damages to landlords and business owners, the bill should create some incentive to property and business owners alike to proactively combat compliance issues. The bill appears to be effective and equitable on its face, given that it brings awareness to compliance without limiting access. Commercial property owners may also wish to consider a review of their current lease or rental agreement form pursuant to the passing of this bill.

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