The Pros and Cons of CA's New Disability Bill

Giebeler: “Overall, SB260 is very narrow and may often be of no help, particularly for businesses with more than 50 employees that will not qualify for any of the new protections.”

SAN DIEGO—California’s new Senate Bill, SB269 , should reduce certain types of predatory lawsuits and claims related to disability -access requirements, but it may target businesses for future litigation, Hecht Solberg Robinson Goldbert & Bagley LLP ‘s Jonathon Giebeler , CCIM, tells GlobeSt.com. We spoke exclusively with Giebeler about the new bill, how it benefits the commercial real estate and disabled communities and the drawbacks to the bill. GlobeSt.com: Please explain what SB269 does. Giebeler: California Senate Bill 269, effective as of May 10, amends California’s existing law related to disability access requirements for commercial properties to provide additional protections to businesses that are sued for property-related disability access violations. Under existing law, businesses, which include both commercial property owners and tenants, are subject to minimum statutory damages for violations of disability access requirements at properties they own or occupy. If a business has its property inspected by a certified access specialist (or “ CASp ”) to confirm whether the property complies with disability access requirements, the business may be entitled to certain protections, including reductions in the minimum statutory damages for violations. In practice, however, even with the CASp program in place, businesses in California have continued to be plagued by predatory lawsuits by professional plaintiffs who allege accessibility violations and then aggressively push for quick cash settlements. SB269 provides additional protections to businesses by effectively waiving minimum statutory damages for small businesses that correct certain technical violations within 15 days, and by providing a longer 120-day safe harbor to businesses that have had a CASp inspection and are in the process of correcting violations. In addition, SB269 requires the public disclosure of properties that have been inspected by a CASp, and requires local agencies to expedite project review when permits or approvals are necessary to perform corrective work. GlobeSt.com: How does it benefit the commercial real estate community and the disabled community? Giebeler: The new law should reduce certain types of predatory lawsuits and claims related to disability access requirements and encourage businesses to correct violations quickly after a CASp inspection. The primary potential benefit of SB269 is reducing claims brought against small businesses based on technical violations of disability access requirements. SB269 creates a presumption that if these violations are corrected within 15 days after written notice (or service of a complaint) they do not cause a plaintiff “difficulty, discomfort, or embarrassment” and therefore do not warrant minimum statutory damages, which are generally $4,000 for each offense. This should limit the shakedown nature of many claims which threaten to seek minimum statutory damages for very minor violations unless a business agrees to a cash settlement. However, the new rule applies only to small businesses, defined as a business with an average of 25 or fewer employees and less than $3.5 million annual gross receipts over the prior three years and applies only to claims based on specified technical violations related to certain interior signs, missing exterior building signs, the color of parking signs and parking-lot striping, faded or deteriorated parking lot striping and the condition of surfaces on ramps. The second part of SB269 has a broader application and protects businesses from accessibility-related claims brought within 120 days after a property is inspected by a CASp.  This may encourage businesses who have had a CASp inspection to act quickly to correct any violations identified by the inspection. SB269 creates one-time 120-day “safe harbor” for violations of disability access requirements if a business has 50 or fewer employees (again on average for the prior three years) and had its property inspected by a CASp before receiving notice of the violations. Under the new safe-harbor rule, if a business corrects all of the violations that are the basis of a claim within 120 days after the date of the CASp inspection (and did not otherwise know about the violations before the inspection), then no minimum statutory damages will be awarded. Additionally, the 120-day period can be extended by 60 days (to 180 days total) if a building permit was required to correct the violations and has been issued and the business is in process of correcting the violations. Finally, to ensure a business is able to quickly correct violations identified by a CASp inspection, SB269 requires local agencies such as the local building department to expedite a project’s review if required to correct violations of disability-access requirements, and the applicant provides an inspection certificate indicating a CASp inspected the property and, if plans are required for the project, also had a CASp inspect the plans. GlobeSt.com: What are the negative effects of this bill? Giebeler: The new public disclosure requirements of SB269 will likely be seen as negative by many businesses. SB269 now requires the State Architect ‘s website to list businesses that have been inspected by a CASp and provide the date of the inspection. Initially this requirement applies only to business with 50 or fewer employees; however, beginning January 1, 2017, the disclosure requirement will apply to all businesses. In addition, if a business has 50 or fewer employees and a CASp inspection identifies disability-access violations, a notice of the CASp inspection must be posted at all public entrances to the building for up to 120 days or until the violations are corrected. While the public-disclosure requirements may encourage business that have had a CASp inspection to correct any violations quickly and may also keep professional plaintiffs at bay for the initial 120-day safe-harbor period, businesses may rightfully worry that public disclosure of the inspection will make them targets for future litigation because the safe-harbor rule is generally a one-time exception that expires 120 to 180 days after the date of an inspection, and in any case, does not apply to business with more than 50 employees. This may end up actually discouraging businesses from having their properties inspected by a CASp. GlobeSt.com:  What else should our readers know about this bill? Giebeler: Commercial property owners and tenants should be aware of changes implemented by SB269 and take advantage of the new protections to the extent possible, but at the same time, owners and tenants should know that overall SB260 is very narrow and may often be of no help, particularly for businesses with more than 50 employees that will not qualify for any of the new protections. Also, because of the public-disclosure requirements, if a CASp inspection is done, any violations in accessibility requirements that are identified should be corrected as quickly as possible.