What real estate lawyers need to know about the ADA

By James O’Brien, Pryor Cashman LLP

Most real estate lawyers are aware of the Americans With Disabilities Act (ADA), but few attorneys negotiating a lease for their tenant-client actually advise them to undertake an ADA inspection prior to executing the lease. By not doing so, tenants may unwittingly be signing on to substantial modification costs.

Most pre-printed commercial lease forms contain a provision stating that the tenant shall comply with all present and future laws, orders and regulations of all state, federal, municipal and local governments, departments, and commissions. 1 In addition, it is difficult to find a modern commercial lease whose rider does not specifically place the burden of complying with the ADA squarely on the tenant.

By signing such a lease, a tenant agrees to absorb the cost of bringing the existing space into compliance with the ADA. That may not be an issue where the tenant plans to gut the store and build out a new space. In that case, a tenant’s architect and engineers should be able to design entranceways, aisles, counters, bathrooms, etc. to be ADA compliant.

James O’Brien

The real problem, however, is where a tenant does not intend to do a major renovation. A typical example is a restaurant tenant that takes over space that previously was used as a restaurant. The tenant plans no substantial modifications, intending merely to update the décor. The front door is hard to push open, however, the exterior landing is cracked and uneven, and there are three short steps from the landing to the floor of the restaurant. The space is old and the hallway to the bathrooms is too narrow to allow a wheelchair to turn. Worse yet, the bathrooms, which recently were updated and appear fresh and clean, are utterly non-compliant. From the attractive twisting door handles to the lack of interior turning room to the placement of grab rails, sinks, and toilets, the bathrooms fail every ADA test.

The fact that the previous tenant operated in that space for years without issue will be of little consolation when a disabled plaintiff commences a lawsuit. The ADA was established to address a critical need – to make public accommodations accessible to disabled people. The Act’s drafters, however, were shortsighted in omitting a notice provision requiring a would-be plaintiff to first make a demand to cure violations, and providing a reasonable cure period before allowing a plaintiff to commence an action. Instead, the first notice of any ADA issue comes in the form of service of a lawsuit.

While the ADA does not provide for damages, 2 it does allow plaintiffs to recover their costs and attorneys’ fees if they prevail. And to prevail in an ADA action, the plaintiff need only prove one instance of noncompliance; that a counter, for example, is 34” when it is supposed to be 36,” or the grab bar in the bathroom is 3” too short. Since the ADA provides for legal fees, the objective in any ADA case is to minimize plaintiffs’ fees; a task oftentimes easier said than done.

ADA actions are typically brought in federal court. Federal rules of procedure require certain mandatory disclosures, and most judges require a joint Case Management Order that sets forth, among other things, the scope and timing of discovery, followed by a preliminary conference.

While that alone will generate fees, discovery is the real engine that drives fees, and it is to be avoided. An ADA complaint typically recites a list of “barriers to access” that are not sufficiently detailed. To determine what ADA violations exist, it usually is necessary to conduct an expert inspection– an expense the defendant will have to pay in the settlement.

The objective in a typical ADA litigation is to negotiate a settlement quickly, which will entail identifying which barriers will be remediated, when and how that work will be done. Also to be negotiated will be plaintiff’s legal fees, which is often a stumbling block to settlement. In short, an ADA lawsuit is at best a nuisance and at worst a major expense in terms of time, money, and lost business. Of course, in a perfect world, all public accommodations would be made accessible.

It may not make aesthetic or economic sense, however, to a potential tenant to undergo the expense of repairing the entranceway, installing a wheelchair lift for the stairs and remodeling the bathrooms. Lease negotiations may not resolve those items and a tenant may or may not decide to accept the space, and the risk of an ADA lawsuit, knowing the extent of the repairs needed. But entering into a lease without a clear understanding of exactly what ADA issues exist is agreeing to a potential modification the extent of which is unknown.

The simple answer is to hire an attorney or inspector to conduct an ADA inspection prior to executing the lease so that a tenant may understand exactly what needs to be done to bring the premises into compliance with the ADA.

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