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October 12, 2016

On January 1, 2017, Commercial Landlords to be Subject to Additional Disclosure Obligations Regarding Construction-Related Accessibility Standards

A new California law will soon impose additional disclosure obligations on commercial landlords. Existing law (California Civil Code § 1938) requires a commercial landlord to state in every lease or rental agreement entered into on or after January 1, 2013, whether the premises being leased or rented have been inspected by a Certified Access Specialist (CASp) and, if so, whether the premises comply with construction-related accessibility standards. AB 2093 modifies California Civil Code § 1938. Under the new law, commercial landlords are still obligated to state in every lease or rental agreement whether the premises have been inspected by a CASp, but they are no longer obligated to state whether the premises comply with accessibility standards. Instead, commercial landlords are now subject to additional disclosure requirements depending on whether a CASp report has been prepared and whether any violations of accessibility standards are noted in the report. The new requirements apply to every commercial lease or rental agreement executed on or after January 1, 2017.

Although AB 2093 contains internal inconsistencies and ambiguities regarding the circumstances under which a CASp report is required to be provided to a prospective tenant, if the premises have been inspected by a CASp, the safest approach for commercial landlords is to provide a copy of the CASp report for the premises to the prospective tenant 48 hours prior to the execution of the lease or rental agreement. If the CASp report is not provided at least 48 hours prior to the execution of the lease or rental agreement, the tenant has the right to rescind the lease or rental agreement within 72 hours following execution. The landlord may require the prospective tenant to agree to maintain the confidentiality of the information in the CASp report, except to the extent disclosure is required to enable the tenant to remedy any accessibility violations the tenant agrees to correct. If any accessibility violations are noted in the report, the new law presumes that it is the landlord’s responsibility to correct the violations (unless landlord and tenant agree otherwise).

If the CASp report concludes that the subject premises meet applicable standards (and a “disability access inspection certificate” has been issued), the commercial landlord must provide a copy of the disability access inspection certificate (and any inspection report not already provided to the tenant) within 7 days of execution of the lease or rental agreement. If the subject premises have not been issued a disability access inspection certificate (because the premises have not been inspected or do not meet applicable standards), the lease or rental agreement must include the following specific language highlighting the tenant’s right to obtain a CASp inspection:

“A Certified Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construction-related accessibility standards under state law. Although state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the premises.”

The attorneys in Boutin Jones’s Real Estate Group will continue to monitor the development of this new requirement and will provide future updates in this space when appropriate.

Please contact any member of the Boutin Jones Real Estate Group if you have any questions about this article.