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New Disability Access Law Imposes Notification Requirements For Commercial Leases




by:
Lydia Lake
Pamela L. Westhoff
Sheppard, Mullin, Richter & Hampton LLP - Los Angeles Office

 
April 24, 2013

Previously published on April 22, 2013

What you need to know:

On July 1, 2013, pursuant to newly enacted California Civil Code Section 1938, owners of commercial real property must state on every lease form or rental agreement whether the property leased has undergone inspection by a Certified Access Specialist (commonly referred to as a “CASp”) and, if so, whether the property has or has not been determined to meet all applicable construction- related accessibility standards pursuant to California Civil Code Section 55.53.

If a commercial property has not been inspected by a CASp, the new statute does not require such an inspection; it merely requires disclosure of whether or not an inspection has been performed and the results of any such inspection. As discussed in more detail below, the intent appears to be to provide an incentive for commercial property owners to reduce their exposure to liability in ADA lawsuits by encouraging owners to obtain a CASp inspection.

Owners of property in San Francisco of 7,500 square feet or less (5,000 square feet or less after June 1, 2013), must also comply with Chapter 38 of the San Francisco Administrative Code. These requirements will be the subject of a separate posting shortly.

Background:

If a disabled person encounters an accessibility violation at a place of public accommodation, current law allows that party to immediately bring an action against a property owner without any prior notice or opportunity to cure. A plaintiff may seek recovery of compensatory damages for injuries resulting from ADA violations and minimum “statutory damages” per violation of $4,000, whether or not any injury was sustained by the plaintiff. It is quite common for a plaintiff to allege multiple violations at a single property (for instance, in the retail context, violations could include failure to provide appropriate signage, improper dressing room dimensions, merchandise located at improper heights, narrow access ways, etc.). As a result, ADA lawsuits have become quite costly, especially to small business owners, even for minor violations without injury to a plaintiff.

In response to the high volume of lawsuits based on alleged ADA violations, many of them by so-called “professional plaintiffs,” Governor Brown signed SB 1186 (Steinberg) into law. The purpose of SB 1186 is to reduce the number of ADA lawsuits and provide a means by which California property owners can reduce their financial exposure to such lawsuits. SB 1186 revises the existing laws related to actions under the ADA to ban pre-lawsuit demands for money and to provide for reductions in statutory damages in ADA lawsuits if certain conditions are present, most of which relate to whether the subject property has been inspected by a CASp for compliance or not as further discussed below. It also strengthens disciplinary measures for attorneys who fail to comply with the procedural requirements of SB 1186. California Civil Code Section 1938 was enacted as part of SB 1186 and requires that on or after July 1, 2013, commercial leases or rental agreements disclose whether or not the property leased has been inspected by a CASp and, if it has, whether the property is in compliance with all accessibility standards.

Benefits of a CASp Inspection:

As stated above, the new law doesn’t require a commercial property owner to obtain a CASp inspection. However, the underlying objective of the legislation is to “encourage” landlords to bring premises up to current accessibility standards by putting their tenants on notice of potential departures from those standards. Nevertheless, if you are not aware of any accessibility issues at your property and are comfortable that no issues are present, there are several benefits to having a CASp inspection performed. A property owner who corrects an alleged violation within 60 days of service of the complaint alleging the violation would only be liable for statutory damages of $1,000 per offense (compared to $4,000 per offense) if the property owner has either obtained a CASp inspection or received approval of new construction or improvements by the local building department on or after January 1, 2008. Additionally, a property owner who has had property inspected by a CASp and has either received a report evidencing compliance with applicable accessibility codes and regulations, or has remedied any noted violations in such report, is entitled to an early evaluation conference and an immediate 90-day stay of proceedings relating to any purported accessibility claims. Many CASp inspectors will provide an inspection sticker that a commercial property owner may display, which should reduce a property owner’s exposure to such lawsuits. Keep in mind however, that even though you are not required to obtain a CASp inspection to comply with the new law, if you do obtain a CASp inspection and it discloses violations, you will need to correct any violations to receive all of the benefits of SB 1186.

If you are uncertain as to the compliance of your building with accessibility standards, but wish to obtain a CASp inspection to obtain the benefits listed above, it is desirable to engage counsel to obtain such inspection on your behalf so that any report generated from such inspection can be deemed “Attorney Work Product” and can be insulated from public disclosure in the event of a dispute with a tenant.

For more information:

Property owners and lessors should be mindful of the effectiveness of California Civil Code Section 1938 on July 1, 2013. We have prepared appropriate lease disclosure language for our clients. Please contact us with any questions or for more information relating to the specific requirements thereof.

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The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.
 

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