SACRAMENTO—GlobeSt.com takes a look at the landlord and tenant implications as a result of the expansion of California Civil Code Section 1938, in part two of two articles. Beginning January 1, 2017, revisions to current California law will expand the disclosure requirements and the responsibilities of landlords and rights of tenants regarding the compliance of commercial real property with disability access laws.

Landlord Considerations

The Certified Access Specialist (CASp) program was designed to encourage compliance by providing benefits in litigation. The changes to Section 1938 can, however, create strategic issues for landlords who are in the process of negotiating a commercial lease, GlobeSt.com learns from Miller Starr Regalia attorneys.

To begin, the inspection report is only the first step necessary for landlords and tenants to avail themselves of the protections offered by Section 1938, ultimately, all necessary corrections will need to be made to obtain the litigation defense benefits.

“A property inspected by CASp and brought into compliance will allow the owner to minimize damages, i.e., reduce the cost of litigation in case of a lawsuit,” David Kanel, real property transactional attorney at Miller Starr Regalia in Walnut Creek tells GlobeSt.com.

A clean CASp certificate can make the property more desirable in a competitive market. Conversely, obtaining the report can have an adverse effect on marketability prior to completion of the necessary corrections. Therefore, care must be taken in deciding whether or not to undertake a CASp inspection if lease negotiations are likely to occur in the near future.

Although the new law allows the parties to negotiate the responsibility for repairs, that responsibility is initially presumed to rest with the landlord, and the law requires the landlord to advise the tenant accordingly. Tenants might attempt to use the legal presumption to their advantage in negotiations. Regardless, the outcome of the negotiation is a matter of bargaining leverage and adds to the time and expense of lease negotiations. Of course, if the landlord chooses to forego the CASp inspection based upon these strategic considerations, the landlord will lose the benefits of the CASp program unless the tenant agrees to assume responsibility for the report and any necessary repairs.

Tenant Considerations

The new law creates strategic concerns for the tenant as well. For example, because the allocation of responsibility for repairs is negotiable, a tenant lacking bargaining power may end up with the responsibility to correct any violations. A tenant might therefore want to consider whether or not it wants to obtain a report on his or her own, according to Miller Starr Regalia.

Accepting delivery of property in its “as-is, with all faults” condition might result in the tenant later becoming responsible for corrections if a CASp inspection is conducted during the lease term after a lawsuit is filed. It might be more beneficial from a lease negotiation standpoint for the tenant to know what will be required and to negotiate responsibility for corrections before entering into the lease.

Because the tenant will also likely be named in any disability access lawsuits, the tenant similarly stands to benefit from the advantages of a clean CASp certificate, says Miller Starr Regalia. If the tenant has bargaining power with the landlord, the tenant might want to bring disability access issues into the forefront before signing the lease.

“A CASp report must be given to the tenant,” Kanel tells GlobeSt.com. “It expands on what is in the lease and provides disclosures so the tenant is fully aware of what is involved.”

Landlord Considerations

Tenant Considerations

“A CASp report must be given to the tenant,” Kanel tells GlobeSt.com. “It expands on what is in the lease and provides disclosures so the tenant is fully aware of what is involved.”

Instant Insights /

Landlord and Tenant Views of Civil Code 1938 Change

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