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New Disability Access Law Reform and its Impact on Small Business and Commercial Property Owners in California

Thumbnail image for sacramento.jpgIn September 2012, Gov. Jerry Brown signed Senate Bill 1186 into law, which attempts to reform California’s disability access laws. The law is aimed at helping businesses comply with the American Disabilities Act (“ADA”) and hopes to curb ADA lawsuits against small businesses in California. In addition, according to Senate President Pro Tem Darrell Steinberg, D-Sacramento, one of the bill’s sponsors, SB 1186 will provide incentives for business owners to fix the violations and enhance accessibility. Though the new legislation tightens disability access laws to further reduce past abuses and protect business and property owners against frivolous lawsuits, the law also imposes additional obligations on building property owners and tenants. Below is a summary of some of the provisions contained within SB 1186.

Demand Letters and Advisories

Effective January 1, 2013, SB 1186 places limits on the contents of demand letters sent by lawyers to property owners or tenants alleging that a business premise is not fully accessible. First, pursuant to the new law, lawyers are prohibited from sending “demand for money” letters to business owners or tenants, requesting payment from business owners in exchange for an agreement to not file a lawsuit. These demand letters must also state sufficient facts for a “reasonable person” to identify the basis of the claim. More specifically, these letters must:

• State the particular barrier their client faced;
• Indicate the date the barrier was encountered;
• Describe how the barrier interfered with their client’s full access or deterred them from visiting the business;
• Include the attorneys’ California State Bar Number; and
• Be sent to both the State Bar and the California Commission on Disability Access

In addition to any demand letter sent, SB 1186 also requires attorneys to send an advisory letter, listing any alleged construction-related violations, at least 30 days before filing a lawsuit. The Judicial Council will update a form that may be used by attorneys to comply with the new advisory requirements by July 1, 2013. In the meantime, attorneys will likely send these advisories in the form of a letter. These advisories must provide certain information to property owners, including but not limited to the owner’s legal rights and obligations, websites where information can be found on how to comply with disability laws, and a statement advising the owner to seek advice of legal counsel and contact their insurance carrier.

If you receive a demand letter or advisory, it is important to make sure that the letter satisfies each of these requirements. If an attorney fails to comply, he or she may be subject to disciplinary action by the State Bar of California.

Reduction of Statutory Damages

For a small business (e.g., businesses with 25 or less employees and less than $3.5 million in gross annual receipts) faced with unintentional, construction-related accessibility violations, SB 1186 allows liability to be reduced from a minimum of $4,000 to $2,000 if the violations are corrected within 30 days of being served with a complaint.

In addition, SB 1186 allows the damage amount to be reduced from $4,000 to $1,000 for each unintentional violation if the business can demonstrate that the construction-related violations that form the basis of the complaint are corrected within 60 days of service of the complaint and one of the following also occurred: (1) the business is in a location that was completed after Jan. 1, 2008; or (2) the business received an inspection by a Certified Access Specialist (“CASp”) — a person certified by the State to be an expert in disability access laws and regulations.

Commercial Lease Terms

Finally, SB 1186 requires that any lease of commercial property (whether or not it is a place of public accommodation) executed on or after July 1, 2013, state whether the property being leased or rented has undergone inspection by a CASp and, if so, whether any violations were found. Although the consequences of failing to provide this information in a lease are unclear, it is possible that failure to make the requisite disclosure could lead to civil suits by commercial tenants. As a result, property owners should incorporate these new requirements in their lease forms to ensure compliance with this new requirement.

Imposition of a New Tax

A $1 tax will be imposed on any application for a local business license or equivalent license or permit. All revenue will be used to fund the expanded CASp program.

If you have any questions about SB 1186 and/or are concerned about how this new legislation will affect your commercial property and/or small business, our Northern California business and real estate attorneys can help. You can contact one of our lawyers using our online contact form, or by calling us at 925-463-1073.

Sources:

Jerry Brown signs bill targeting abuses of disability access law, The Sacramento Bee

SB-1186 Disability access, California Legislative Information