Starting on January 1, 2013 a new set of rules will take effect that impact commercial landlords and small business tenants in San Francisco. Under disability access law, both landlords and tenants of public accommodations have the legal obligation to assure compliance. Although this has been the law for more than twenty years, many commercial landlords and tenants of small businesses have been unaware of the applicable requirements, which has led to confusion, conflict and litigation. With the goal to heighten awareness and to assist the parties of commercial leases to sort out disability access issues between themselves, the Board of Supervisors enacted Chapter 38 of the San Francisco Administrative Code, entitled "Commercial landlords; access improvement obligations and notice to small business tenants regarding disability access" (hereinafter "Chapter 38"). Chapter 38 imposes obligations on both landlords and tenants regarding ground floor disability access and disability access to public restroom facilities. This article focuses on how the new rules impact landlords when making or amending leases of commercial real property comprised of 7,500 square feet or less for use as a public accommodation.
Starting January 1, 2013, any new commercial lease or any amendment to an existing commercial lease for a space of 7,500 square feet or less that is used as a public accommodation will trigger a duty to comply with Chapter 38 (For spaces of 5,000 square feet or less the effective date is June 1, 2013). Under federal law, a "public accommodation" is, essentially, any business open to the public, including retail, health care, professional office, lodging, entertainment venues, social service agencies, schools, gymnasiums, museums and recreation facilities. Thus, commercial uses not open to the general public, such as call centers, are exempt from Chapter 38, but businesses open to the general public such as hotels, bars, restaurants, stores and offices are covered. (FN1)
After the effective date, commercial landlords of public accommodations will have two options to achieve compliance with Chapter 38.
First, the landlord may effectuate building alterations as necessary to assure that ingress/egress and public bathrooms comply with applicable ADA requirements before making or amending a commercial lease. Also, the landlord must provide a notice regarding the disability access obligations, which may be accomplished by utilizing the "safe harbor" language of Chapter 38.2(b).(FN2) The notice must be signed by the landlord and tenant. Thus, even if the landlord brings the premises into compliance with the ADA, all leases and amendments must be preceded by a signed safe harbor notice. Next, a copy of the brochure entitled "Access Information Notice" authored by the City (and available on the Assessor-Recorder's Office website www.sfassessor.org ) must be provided to the tenant in the tenant's language. Confirmation of the tenant's receipt of said brochure should be procured to demonstrate compliance, such as sending it via certified mail or by obtaining a signed confirmation of receipt from the tenant. Finally, the landlord must include a provision in every lease and amendment subject to Chapter 38 specifying who is responsible for making and paying for ADA improvements to the property and that both parties will use reasonable efforts to notify the other of any alterations to the premises which might impact accessibility. This obligation may be satisfied by utilizing the "safe harbor" language of Chapter 38.2(b).
The second option for landlords to comply is to provide notice to a prospective tenant of the disability access obligations and that the property may not meet ADA requirements. This additional requirement may be satisfied by adding safe harbor language of Chapter 38.3(c) to the notice. [FN3] Again, the notice must be signed by the landlord and tenant. Next, a copy of the brochure entitled "Access Information Notice" authored by the City (and available on the Assessor-Recorder's Office website www.sfassessor.org) must be provided to the tenant in the tenant's language. Again, the landlord should retain proof that the notice has been given. Finally, the landlord must include a provision in every such lease and amendment specifying who is responsible for making and paying for ADA improvements to the property and that both parties will use reasonable efforts to notify the other of any alterations to the premises which might impact accessibility.
Thus, even if the tenant agrees to bring the property into compliance with the ADA, the landlord must still perform according to Chapter 38 regarding issuing a notice of disability access obligations, getting the notice signed, and providing a copy of the Access Information Notice brochure before any applicable lease or amendment is executed. The lease or amendment must specify which of the parties is to make the premises ADA compliant, pay for such modifications, and that the parties agree to notify each other of any alterations which may impact access.
Chapter 38 also includes provisions to assure that the City will expedite ADA building alteration permits.
Interestingly, there is no provided mechanism for the City to review leases for compliance, nor is there a built-in penalty provision for a failure to comply. However, the burden is on the landlord to assure compliance with the notice and lease drafting requirements, and thus the tenant could have an advantage in any ADA litigation if the landlord has not complied. Depending upon the bargaining posture of the parties, one efficient course for a commercial landlord of a small business is to place the burden of ADA improvements as well as the cost for such improvements on the tenant, so long as notice requirements have been met.
Andres Sanchez and Michael C. Hall / Law Offices of M C Hall & Associates©