The Marin Lawyer
SB 1186 NEW
ACCESSIBILITY
INSPECTION
LEASE
DISCLOSURE
REQUIREMENT
LEAVES
UNANSWERED
QUESTIONS
By Scott Rogers and Ted Klaassen
© 2012
Senate Bill 1186 was recently enacted to reduce the
mounting wave of accessibility
lawsuits threatening to swamp
the California courts and to encourage California businesses to
better comply with the Americans With Disabilities Act and
state accessibility laws. In addition
to enacting detailed new reTheodore K Klaassen
quirements for attorneys dealing
with construction-related accessibility claims and giving
incentives to owners to comply with such accessibility
standards, SB 1186 imposes a new disclosure obligation
on commercial property owners and/or lessors.
SB 1186 adds new Civil Code Section 1938 which
provides as follows:
"A commercial property owner or lessor shall state
on every lease form or rental agreement executed
on or after July 1, 2013, whether the property being
leased or rented 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 pursuant to [Civil Code] Section 55.53."
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Note that SB 1186 is expressly not intended to require
a property owner or lessor to hire a CASp. However, the
new disclosure requirement could create traps for unwary
owners and lessors and may force some into obtaining a
CASp inspection.
Although the new requirement sounds simple enough,
Section 1938 does not define "commercial property." The
definition may have been intended to be synonymous with
"site," which is defined in Civil Code Section 55.52(a)(9)
as being a "place of public accommodation." However, no
cross-reference is made. Consequently, we are left to surmise the breadth of the application of the new requirement
Also note that no exemption is provided for short-term
leases or rental agreements so that even month-to-month,
or possibly transient, occupancy agreements would appear
to be included.
Also uncertain is whether commercial property managers, as opposed to owners and lessors, are bound by the
disclosure requirement. The use of the phrase "owner or
lessor" suggests that someone other than the actual property
owner who leases a commercial property will be obligated
to comply. This makes sense in the case where the property or leasing manager leases or rents the property in its
own name rather than in the name of the actual property
owner. However, where the lease or rental agreement is in
the name of the actual property owner and the disclosure is
not made, or is made incorrectly, it may be possible that the
property or leasing manager who negotiates the lease also
incurs liability for violation of the disclosure requirement.
In addition, the scope of an owner's or lessor's potential liability for violation of the disclosure requirement is
unclear. Civil Code Section 1938 is completely silent in
that regard. No guidance is provided as to whether the tenant will have an action for damages, the right to terminate
the lease and/or some other remedy.
New Section 1938 is also silent as to whether the disclosure requirement applies in the absence of knowledge
by an owner or lessor of any prior CASp inspection of the
property. As the disclosure requirement does not afford an
owner or lessor the option to qualify its disclosure as being to the best of its knowledge, it will be incumbent upon
a property owner or lessor to determine whether a CASp
inspection was previously made.
With regard to new acquisitions, this may complicate
the due diligence process and/or require an additional representation or warranty. Where few, if any, representations
or warranties are available and/or only incomplete property
records can be accessed in the course of the buyer's due
diligence (as is commonly the case in acquisitions from
banks of recently foreclosed properties), the buyer may
have no practical alternative than to obtain a CASp inspec(Continued on page 12.)
The Marin Lawyer
(SI31186, continued from page 6.)
tion. This may also be true with regard to an owner's or
lessor's current property holdings as to which it may not
know whether a CASp inspection was previously done.
In any event, it is certain that the addition of Civil
Code Section 1938 will require that appropriate changes be
made to all lease and rental forms for commercial properties in California. Care should be taken to assure that all
lease and rental forms are updated prior to July 1, 2013,
and that all leases and rental agreements drafted before
July 1, 2013, but executed on or after that date include the
required disclosure.
Scott Rogers is a partner in the Palo Alto office of
Rutan & Tucker, LLP where he specializes in real estate
finance, equity and lease transactions, title insurance and
real estate litigation. He is the former Chair of the Real
Property Section of the State Bar of California. Scott obtained both a ID. and M.B.A. from UCLA.
Ted Klaassen is senior counsel in the Palo Alto office
of Rutan & Tucker, LLP where he represents developer,
investor, corporate, and institutional clients in a broad
spectrum ofreal estate transactional and litigation matters.
Ted earned his journalism degree from the University of
Missouri and his law degree from the University of Southern California.
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