On July 1, 2013, new laws took effect in California to curb “abuse” of disability access claims. Property owners should be aware of the following:

1. Notice to Tenants. The law requires that commercial leases and rental agreements executed on or after July 1, 2013, state whether or not the rental property has undergone inspection by a Certified Access Specialist (“CASp”) and, if so, whether the property has or has not been determined to meet all applicable construction-related accessibility standards. With respect to adding the provision to the lease, it is not recommended that the provision be added without reviewing other portions of the lease, as it is likely that the provision will impact other provisions in the lease.

Property owners should consider whether or not to obtain a CASp inspection report, which may reduce their potential damages for a disability access claim (see below) or which may discover issues that must be corrected if the owner wants to obtain the benefit of the new law.

2. Reduction of Damage Amounts for Violations. SB1186 reduces the minimum statutory damages from $4,000 to $1,000 for each offense by an owner who (a) has a CASp inspection report and has met applicable standards, or (b) has new construction after January 1, 2008 approved by the applicable agency, if the violation is corrected within 60 days of being sued. Intentional violations are an exception to this rule.

A small business owner (25 or fewer employees and less than $3.5 million in gross receipts) could have minimum statutory damages liability reduced from $4,000 to $2,000 for each offense, if violations are corrected within 30 days of being served the complaint.

3. Notice to Owners. A property or business owner receiving notice of a potential claim should be aware that they are now entitled to certain notice rights and time to cure violations under SB1186, prior to being subject to a lawsuit. A claimant may be required to give a notice to the business owner specifying the exact physical condition which is the basis of the complaint. The owner will have a very short period of time to respond or to rebut the claim. Either the owner or the claimant can demand a mandatory evaluation conference with the other party to take place 90 to 120 days after the request for such a conference.

4. Demand Letters. The new law provides that while demand letters alleging a claim for disability access may request settlement negotiations, such demand letters may not make a specific demand for money. Also, anyone claiming that there is a violation of laws regarding disability access must state in their demand letter facts sufficient to allow the owner to identify the basis for the claim, including an explanation of the specific access barrier, the dates of alleged violations, and the manner in which the barrier was encountered. Attorneys filing these suits must report the claim to applicable agencies and provide a copy to the State Bar. Property and business owners receiving demand letters for money arising from disability claims should be aware that such letters are illegal under SB1186 and that attorneys sending such letters in violation of SB1186 may be subject to discipline.

“This information is for educational purposes only and not intended to constitute legal advice. Every project and property is unique. Please seek legal counsel for advice specific to your project.”