NEW DISABILITY ACCESS LEGISLATION TAKES EFFECT NEXT WEEK: READ THIS TO BE PREPARED

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:

1. 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.

2. 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.

3. 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.

4. 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.”

5. 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.

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IF YOU OWN OR PLAN TO OWN COMMERCIAL REAL ESTATE, YOU WILL NEED TO BECOME FAMILIAR WITH “CASpS” AND THE ROLE THEY WILL PLAY

If you own and/or are a landlord of commercial real estate in California, you need to be aware of a law change taking effect on July 1, 2013.  That change is set out in Civil Code Section 1938, which reads 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.”

 What Does The Quoted Statute Mean?

 Beginning on July 1, any new commercial realty leases and rental agreements for premises in this state will have to contain a disclosure as to whether the property involved has been inspected by a Certified Access Specialist (“CASp”) and, if so, what the outcome was.  It is not clear from the legislation whether this obligation will also be interpreted as requiring disclosures starting on July 1 for amendments to pre-July 1 leases and rental agreements where the earlier lease papers did not contain the pertinent information.

Notably, the statute does not require the hiring of a CASp but only disclosure of whether one was employed (and what he or she found).  This disclosure will not substitute for or eliminate the need to comply with other existing state regulations (like those in the Unruh Act).  Nor would it obviate compliance with local ordinances or federal mandates (such as those prescribed by the Americans With Disabilities Act).

 What Is A CASp, What Does A CASp Do And How Does One Find Such A Person?

The Construction-Related Accessibility Standards Compliance Act, which has been on the books since 2009, and related legislation specify (1) the criteria for being certified as a CASp, (2) what a site inspection by a CASp will entail and (3) what are the guidelines for determining whether the site meets “applicable construction-related accessibility standards.”  The CASp will inspect not only the individual premises leased but also common areas, such as bathrooms, elevators and building lobbies.

The legislative scheme contemplates that there will be “private CASps” as well as those employed by local government agencies, each such agency to have at least one CASp.  (Bureaucracy at work!)

To find out the names of CASps in your area, you may consult a list published by the State Architect.  The current list can be found at the following link:  https://www.apps.dgs.ca.gov/casp/casp_certified_list.aspx

What Are The Advantages And Disadvantages Of Electing To Retain A CASp And To Obtain An Inspection Report From The CASp?

 Because it is optional, will it be worthwhile to retain a CASp?  Some of the pros and cons are set out below:

 Advantages

If you have the inspection and pass, you will get an inspection certificate from the CASp.  That will reflect diligence and, hopefully, compliance with disability access requirements.

1. If you have the inspection and some access violation is found, your potential punishment — a fine — will be considerably less costly than if the violation is discovered by other governmental sources.
2. The inspection is likely to give tenants comfort about the building being in compliance with disability access requirements.
3. The inspection can be cited as evidence if private litigation is ever initiated by property purchasers, tenants and/or invitees on disability access issues.  It will help in asserting defenses to these types of claims.

Disadvantages

1. “Opening up Pandora’s box.”  This could include, for example, learning of a problem as to which you would have to inform potential buyers of the land involved.
2. Possibly raising the level of tenant concerns about disability access issues and possibly inviting nuisance lawsuits if violations are detected.
3. Cost for the inspection, inspection certificate and any accompanying reports from the CASp.
4. Cost to comply if violations are discovered.

Conclusion

All owners and lessors of commercial real estate will need to revise their leases and rental agreements to comply with the disclosure obligations of the legislation.  For help in that area or in evaluation of whether to hire a CASp, it is advisable to obtain counsel from an experienced real estate attorney conversant with these matters.  Joe Cobert has the experience and expertise to give guidance as to these unique items.