If you own commercial rental real estate in California, you need to be aware of new state legislation becoming operative next week in connection with disability access for your tenants. Even if you comply fully with ADA and other federal disability access guidelines, the new California rules will apply.
The new legislation, AB 2903, relates to and amends Civil Code Section 1938. When enacted in 2013, Section 1938 read as follows:
“A commercial property owner or lessor shall state on every lease form or rental agreement executed on or after July 1, 2013, whether the property being leased or rented has undergone inspection by a Certified Access Specialist (CASp) and, if so, whether the property has or has not been determined to meet all applicable construction-related accessibility standards pursuant to Section 55.53.”
The statute as enacted in 2013, which we discussed in an issue of The Joe Cobert Report dated on May 7 of that year, did not mandate that the owner or lessor (hereafter the “landlord”) actually hire a CASp or perform an inspection. It only required disclosure to the tenant in the lease document itself whether, in fact, a CASp had been retained.
Up to now, Section 1938 has been easy to comply with. We all added the disclosure language to our commercial leases and not many of us percentage-wise actually hired CASp inspectors. Even though the new law still does not mandate hiring a CASp, its requirements have specified changes to Section 1938 as to any commercial lease executed on or after January 1, 2017. We summarize those changes below:
- If the subject premises has been inspected by a CASp, and if the landlord is aware of alterations since the inspection which have “impacted compliance” with accessibility standards, the landlord must provide to prospective tenants — prior to execution of the lease — a copy of any report prepared by the CASp.
- If there is a report and it is not provided to the prospective tenant at least 48 hours before lease execution, the tenant has 72 hours after execution to rescind based upon information in the report.
- Unless otherwise agreed to by the prospective tenant, making repairs or modifications necessary to correct access violations is presumed to be the responsibility of the landlord.
- If the subject premises has received an inspection report showing that it meets applicable California access standards, the landlord must deliver to the prospective tenant — at least seven days before lease execution — a current “disability access inspection certificate.”
- If no disability access inspection certificate has been issued for the subject premises, the following language must be set out in the lease itself:
“A Certificate Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construction-related accessibility standards under state law. Although state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the premises.”
What does all this mean for you if you own commercial realty in California? Whether or not you intend to hire a CASp, you will be affected in regard to all rental agreements executed beginning on January 1 for any type of non-residential real property. We invite our members to contact Joe Cobert to discuss the specifics of how the new law will impact you, what are apparent loopholes and ambiguities in the legislation and more. We will also furnish updates about Section 1938 in future issues of this newsletter.