“Let your tenant take care of their own ADA requirements!” After all, isn’t the lease agreement written in such a way that it puts all liability on the tenant for what they do inside their leased space? For a number of years now I have been telling landlords to first worry about their own exterior common area and to merely keep a watchful eye on what your tenant does. Well, times are changing and I am witnessing some disturbing outcomes of several ADA lawsuits here in California and Florida that are changing my view on this topic.
For years I have heard commercial landlords say that they are not concerned about whether their tenant spaces are accessible because their leases place the obligation for complying with accessibility laws such as Title III of the ADA on the tenants. A recent decision from the federal district court in Northern California makes clear that landlords should consider a more proactive approach.
In this California case the court restated the basic proposition that while the ADA allows landlords and tenants to allocate the responsibility for complying with the ADA between themselves, landlords and tenants are both liable for violations in leased spaces with respect to persons with disabilities who are denied access. In addition, the court held that both the landlord and the tenant were responsible for the entirety of the plaintiff’s attorneys’ fees and costs awarded by the court. The court left open the possibility of an apportionment of awarded fees and costs only in situations where there is significant disparity in the time spent pursuing claims against the various defendants.
This case serves as a reminder that landlords should pay more careful attention to the state of accessibility in their tenant spaces even if their leases have provisions requiring the tenant to indemnify the landlord for any losses and pay its defense costs. Landlords cannot always rely on their tenants to provide them with a timely or competent defense for a number of reasons. Some tenants lack the financial resources, diligence, and/or knowledge to retain and manage outside counsel. Some choose to hire outside counsel who have no expertise in ADA Title III matters. Faced with litigation deadlines that cannot be postponed, landlords may wind up having to take matters into their own hands and hire their own counsel to represent their interests. Needless to say, landlords trying to recoup these fees from tenants later can be a challenge at best.
Here are some things landlords or managers can do to greatly reduce overall risk:
- Update all lease agreement language to include a provision that requires all tenants to obtain their own CASp (or state appropriate) accessibility inspection of their space and submit copy to landlord.
- Require all tenant improvement, remodel or new construction documents be reviewed by landlords ADA consultants prior to permit submittal with the building agency
- Require all tenants to detail out the total valuation of their project and list the accessible barriers they will remove to meet the 20% additional required by the building agency.
- Landlords should have vacant spaces inspected prior to new tenant move-in to ensure compliance with current standards and to ensure the tenant is leasing a compliant space.
- Landlords should have their common areas inspected and have a detailed list of their own barriers slated to be removed with estimated costs in case the building agency requires items outside of the tenants space be addressed to meet the 20% additional rule.
Isn’t it time we all take additional steps to protect our properties, while reducing our exposure to unnecessary risks and financial burden?