Western Real Estate Business magazine covers the multifamily, retail, office, healthcare, industrial and hospitality sectors in the Western United States.
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34 • September 2015 • Western Real Estate Business www.REBusinessOnline.com P rior to the enactment of the American with Disabilities Act in 1990, a disabled person had no legal recourse when discriminated against based on his or her disability. Congress passed the ADA to fgura- tively and literally open doors for the disabled community to any place of public accommodation, such as a res- taurant, retail store, etc. While the ADA intended to create equal access for disabled persons, un- scrupulous lawyers and "professional victims" take advantage of the ADA by suing small businesses whose premises do not comply with the tech- nical requirements of the ADA, often simply to extract civil penalties and le- gal fees. Once those fees are extracted, many of these litigants do not even bother to ensure that the barriers to access are removed. Lawmakers have unsuccessfully tried to rein in these abuses in the past. With several new bills pending in the state legislature, California is once again trying to curb ADA abuses and protect California businesses. The fact is, many of these ADA lawsuits are unnecessary. Most small business owners are willing to bring their properties into compliance if given the chance. But once a lawsuit is fled, they must decide whether to pay for a settlement, fght or shut down entirely. Recognizing the overabundance of expensive ADA lawsuits in Cali- fornia, the state legislature passed Senate Bill 1186 in 2012. Some of SB 1186's provisions include: [1] a pro- hibition on requests for payment of money in demand letters; [2] a reduc- tion the amount of damages for cured violations; and [3] prohibiting lawyers from stacking multiple claims for one violation. SB 1186, however, is widely consid- ered inefective because ADA lawsuits continue to threaten California busi- nesses. Several proposed laws seek to fnish the work that began with SB 1186. Senate Bill 67, introduced by Sen. Cathleen Galgiani, extends the time to correct defciencies from 60 to 120 days. Additionally, SB 67 forces those who plan on suing to provide evi- dence of having sufered actual harm, instead of automatically collecting statutory damages. While this provi- sion will limit predatory lawsuits, it may also discourage sincere plaintifs from suing. Sen. Richard Roth's Senate Bill 251 incentivizes small businesses to pro- actively enhance access to disabled patrons by providing tax credits for small businesses constructing im- provements to comply with the ADA. Additionally, SB 251 allows small businesses to cure certain minor viola- tions within 15 days of receiving the complaint, without facing penalties. While this bill has the right focus of incentivizing businesses to take ac- tion, it does not entirely solve the is- sue because of its limits to small busi- nesses. With Assembly Bill 52, Assembly- man Adam Gray seeks to limit pred- atory litigation against businesses by signifcantly reducing damages awarded in a lawsuit from $4,000 per violation to $1,000 per violation. AB 52 also gives small businesses six months to fx violations. Assembly Bill 1230 aims to help small businesses become compliant with the ADA by setting aside $50 million to provide loans to small busi- nesses that remove barriers to access. However, this legislation provides no incentive for business owners to search for ADA violations. And busi- ness owners would still have to ul- timately pay the cost of compliance since the money provided is in the form of a loan, not a tax credit. Assembly Bill 54, spearheaded by Assemblywoman Kristin Olsen, seeks to improve access for disabled pa- trons by providing businesses with a 60-day right to cure certain violations. Additionally, the bill gives tax credits to businesses that have their prem- ises inspected to see whether they com- ply with the ADA by Certifed Access Specialists (CASp). U n f o r t u n a t e l y, none of the pro- posed bills fully en- compass the spirit of the ADA by creating equal enjoyment of places of public ac- commodation for the disabled com- munity. To enhance access for the dis- abled community, the Legislature must incentivize businesses to proactively comply with the ADA. But to get sup- port from businesses, new legislation must also protect businesses from ADA lawsuits. Currently, businesses owners can wait for a lawsuit to be fled before they take measures to determine their compliance with the ADA. New legis- lation should make it easier and even incentivize property owners to iden- tify violations and correct them. Leg- islation should not only provide tax credits to businesses that obtain CASp inspections, but also to businesses that correct the ADA violations found as a result of the CASp inspection. The new legislation should discour- age the use of the courts by predatory lawyers and plaintifs to gain compli- ance with the ADA, without discour- aging injured plaintifs from bringing lawsuits. To do so, the new legislation should require that before a lawsuit may be fled, a business be provided a reasonable notice and opportunity to cure violations. If the violation is timely cured, the plaintif, and not the lawyer, should be entitled to a specifed penalty. The new legislation should also require plaintifs who re- cover penalties, to confrm and docu- ment compliance by the business they provided notice to. The ADA should not be a tool for predatory lawyers and professional victims to proft of of businesses that, usually unknowingly, are in viola- tion of the ADA. The Legislature is making ground on trying to accom- modate the disabled community and protect businesses, but the proposed legislation fails to strike the right bal- ance between the policies of promot- ing compliance, and limiting wasteful lawsuits. David Bolstad is a partner with Safarian Choi & Bolstad LLP. Andrew Berman is a summer associate with the frm. NEW ADA LEGISLATION SEEKS TO PROTECT BUSINESSES In California, new legislation has been introduced to curb ADA abuse. By David Bolstad and Andrew Berman Visit the NEW northmarq.com for daily rates, expert views, recent transactions and much more! 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