ADA Issues in Commercial Leases

Commercial leases are sometimes not specific on how to allocate the costs that may arise in addressing the costs for ADA compliance.
While we as real estate agents are not the appropriate experts to determine if there are ADA issues at a given property - that should be addressed by an architect - or certified specialist - we may consider advising our Clients indicating that it should be addressed in the Lease.

Frequently leases are silent or allocate the cost to the Tenant - which may not be fair or reasonable.
A more even handed approach may be to allocate ADA compliance costs as follows:
1) Common Area Costs to the Landlord - as capital expenditures - not reimbursed as an operating expense by the Tenant(s)
2) Premises Costs to Tenants - except in the situation where the lease is full service gross - like a Class "A" office
For NNN leases of the entire property it may be appropriate for the Tenant to be responsible for all ADA compliance costs. . .

Regardless, if the lease is silent about ADA compliance costs - and those costs come up - there may be litigation concerning who should pay - and it may be years after the lease commences.

Our current Disclosure regarding ADA is as follows:
2.    AMERICANS WITH DISABILITIES ACT: The Americans with Disabilities Act is intended to make many business establishments equally accessible to persons with a variety of disabilities; modifications to real property may be required.  State and local laws also may mandate changes.  The real estate brokers in this transaction are not qualified to advise you as to what, if any, changes may be required now, or in the future.  Lessor and Lessee should consult the attorneys and qualified design professionals of their choice for information regarding these matters.  ALLIED COMMERCIAL REAL ESTATE, herein referred to as “Broker” cannot determine which attorneys or design professionals have the appropriate expertise in this area. 

While our disclosure may help reduce our liability, because of the recent proliferation of ADA lawsuits, we may want to further advise our clients, whether they are landlords or tenants:
1) have the property inspected by an ADA expert - under new proposed legislation, landlords will need to disclose in their leases whether the property has been inspected by a Certified Access Specialist under the California Certified Access Specialist Program (CASp).
2) have any leases address allocation of compliance costs between tenant and landlord.

Attached are some legal articles dealing with ADA access for your use.

  1. Addressing ADA Issues in Commercial Leases in California
  2. Who is responsible for ADA Compliance - Landlords or Tenants?
  3. Landlords, Tenants & Accessibility When Its time to Draft Lease Provisions

DISCLAIMER: This Article is designed to be of general interest. The specific techniques and information discussed may not apply to you. Before acting on any matter contained herein, you should consult with your personal legal adviser.

Information provided by:

Steven D. Roppel
Senior Vice President

Allied Commercial Real Estate
3100 E. Cedar Street, Suite 7, Ontario, CA  91761
Direct: (909) 297-0881 | Direct Fax: (949) 666-7439
License 01151111| Corporate License 01519318