Commerical Lease Disclosure Requirements
Effective July 1, 2013, a new lease disclosure requirement in the California Civil Code section 1938 affects owners and lessors of commercial property.
Part of the new Senate Bill 1186 intended to limit unwarranted lawsuits brought under the Americans with Disabilities Act (ADA), provides 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 had an inspection performed by a Certified Access Specialist (CASp), and if so whether or not the property has been determined to meet all applicable construction-related accessibility standards."
Questions have surfaced from concerned property owners wondering how to comply with this new provision. Some owners are concerned with potential consequences of not having a completed a CASp inspection while others question how far this inspection has to go?
Many have asked whether this provision requires that the exterior “Common Areas” only need to be inspected or if the interior tenant spaces are to be included in this process?
As we continue to seek clarity and answers to our questions, we have reached out to various sources including the California Commission on Disability Access (CCDA) so that we can keep our clients up to date.
Properties Covered: California civil code section 1038 specifically addresses “commercial properties”, which under California Civil Code 1995.020 means all properties other than residential purposes. The CCDA has confirmed that the provision is not applicable to residential leases.
July 1, 2013 Effective Date applies to all leases or rental agreements of commercial properties executed on or after July 1st, 2013.Pre-July 1, 2013 Leases-Post July 1, 2013 Amendments and Modifications. The California Commission on disability Access has advised that a lease that is entered into prior to July, 1, 2013 but is amended or renewed on or after July,1, 2013 falls within the provisions and requirements of Civil Code section 1938; therefore any such lease amendment or renewal must state whether or not a CASp inspection has been done.
This new lease provision does not require that a private property owner hire a CASp inspector to evaluate their property. Not having an inspection completed is not admissible to prove that person’s lack of intent to comply with the law and it may raise questions from the prospective tenant and could result in delays in negotiating and finalizing a lease. However, if a private property owner decides not to have an inspection done then they cannot take advantage of the benefits that come along with the CASp program.
The benefits of having a CASp inspection done are numerous. Here are just a few benefits to an owner:
It will identify all of the barriers that exist on a property so that budget numbers can be placed on each item being removed.
This report allows for the creation of a plan to remove these barriers over a period of time that does not create a financial burden for the property owner.
It provides for a clear distinction between what is a “Readily Achievable” barrier and what is NOT.
If a property owner creates and follows their barrier removal plan then they are considered a “Qualified Defendant” in the eyes of the court.
If an access suit is filed, this process allows for a “90-day stay” to be placed on the plaintiff’s case and provides for early resolution.
The average cost of a CASp inspection report is usually half of the $4,000 minimum statutory awards amount here in California. It really doesn't make any sense to not have a CASp inspection report done on any commercial property.
The responsibility of all property owners to maintain their properties and remove barriers exists whether they want to know about the barriers or not. It's time we all became pro-active and not re-active when it comes to access on our properties.