"Most real estate lawyers are aware of the Americans With Disabilities Act (ADA), but few attorneys negotiating a lease for their tenant-clients actually advise them to undertake an ADA inspection prior to executing the lease," James O'Brien, Jr., Co-Chair of Pryor Cashman's ADA Defense + Consulting practice, wrote in a recent article for Real Estate Weekly. "By not doing so, tenants may unwittingly be signing on to substantial modification costs."
Commercial Leases and ADA Compliance
Most commercial leases place the onus of complying with ADA regulations squarely on the tenant. This obligation may not present an issue for a tenant who intends to gut renovate an existing space, but in a scenario where a tenant plans to make only minor modifications to the premises, preexisting violations that are left unchecked can provide the basis for a future ADA suit.
The ADA was created to ensure that public accommodations are accessible to disabled individuals. A unique aspect of the Act, which places defendants at a disadvantage, is its omission of any notice provision requiring would-be plaintiffs to make a demand to cure alleged ADA violations before initiating a lawsuit. "The Act's drafters were shortsighted in failing to include a notice provision," O'Brien said. Instead, "the first notice of any ADA issue comes in the form of service of a lawsuit."
Though not entitled to damages, ADA plaintiffs can recoup their costs and attorneys' fees if they prevail. In order to win an ADA suit, a plaintiff must prove only a single instance of noncompliance; that a counter measures 34" when it is supposed to be 36", for example.
Tenant's Counsel Should Strive to Minimize Fees
Because discovery is the engine that drives fees in an ADA litigation, O'Brien cautions that it is to be avoided. A typical ADA complaint contains a list of purported "barriers to access." To determine what violations actually exist, an expert inspection is generally necessary, the cost of which must be paid by the defendant at settlement.
O'Brien recommends negotiating a settlement that specifies the barriers to be remediated, by what date and how they will be corrected as early on as practicable. Additionally, counsel should negotiate plaintiff's legal fees, although this can be a stumbling block to settlement.
Key Takeaways
ADA lawsuits are, at best, a nuisance, and, at worst, a substantial drain on time, money and business. While it may not always make economic sense for a potential tenant to undertake major renovations in pursuit of a 100% ADA compliant space, their safest bet is to hire an attorney or inspector to conduct an ADA inspection before signing a lease so they may understand exactly what is needed in order to bring the premises into compliance.
To read O'Brien's full article in Real Estate Weekly, please click here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.