Limitations on Predatory ADA Lawsuits & New Disclosure Requirements for Commercial Landlords

AUTHOR: DANIEL H. CHO

PUBLISHED: 10/31/12


In an effort to curb the high number of predatory ADA lawsuits being brought against property and small business owners in California, on September 19, 2012, Governor Jerry Brown signed into law Senate Bill 1186 (“SB 1186”), a bipartisan bill sponsored by State Senators Bob Dutton and Darrell Steinberg. Among its many effects, SB 1186 significantly limits certain tactics often used by the attorneys behind these types of lawsuits, adds additional requirements aimed at deterring frivolous lawsuits brought under the guise of the ADA and implements certain lease disclosure requirements for commercial landlords. Some of the highlights of SB 1186 include:

  • The requirement that demand letters or complaints sent to property or business owners include a written advisory detailing certain obligations and rights available to such owners.  The advisory, among other things, includes resources for property and business owners to obtain information regarding their ADA obligations and compliance requirements.  The advisory also clarifies that owners at the receiving end of such demand letters or complaints are not required to pay any money in connection with such letters or complaints unless and until a court has found the property or business owners liable.
  •  The requirement that demand letters or complaints sent to property or business owners describe in plain language the basis for the ADA claim.  In theory, this requirement will help cut through the “legalese” that is often included in such letters to confuse owners into paying money prior to final judgment.
  • A prohibition against including specific demands for money in demand letters based on ADA claims.  The demand letters may, however, include a generic statement stating that the property or business owner “may be civilly liable for actual and statutory damages for a violation of a construction-related accessibility requirement.”
  • The requirement that all demand letters include the State Bar license number of the attorneys drafting the letters.
  • The requirement that copies of all demand letters be submitted to both the California Commission on Disability Access (“CCDA”) and, until January 1, 2016, the California State Bar.  A copy of any complaint would also be required to be sent to the CCDA.

   A significant reduction in the minimum liability for properties in violation of construction-related accessibility standards to:
$1,000 for each offense if the owner has corrected all construction-related violations that are the basis of the claim within 60 days after being served with the complaint; and
$2,000 for each offense if the defendant is a small business and has corrected all construction-related violations that are the basis of the claim within 30 days after being served with the complaint.    

In addition to the foregoing changes, one additional element of SB 1186 that is particularly relevant for commercial landlords is the requirement that commercial landlords disclose on their leases or rental agreements whether their buildings or properties have been inspected by a certified access specialist and, if so, whether such buildings or properties have been determined to be in compliance with applicable construction-related accessibility standards.  This requirement would apply to leases or rental agreements entered into on or after July 1, 2013.  It’s unclear, however, what penalties, if any, would apply if a landlord fails to make such disclosure.

If you have any questions regarding SB 1186 or would like to discuss how SB 1186 impacts your business, please contact our office.

ABOUT AUTHOR:

Mr. Cho specializes in commercial real estate law, with an emphasis on leasing, purchase and sale transactions, financing and development. His practice involves the representation of major corporations, national and regional developers, small to mid-size companies and individuals in a broad range of real estate transactions and projects throughout the United States, including the acquisition and disposition of developed and undeveloped real property, office, retail, industrial and ground leasing, acquisition and construction financing, and the negotiation, preparation and review of easements, license agreements, CC&Rs, construction contracts, commercial agreements and other due diligence matters....


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