Defining ADA Responsibility in Lease

Q I know that under the Americans with Disabilities Act (ADA), buildings open to the public must be accessible to people with disabilities. If any part of the building I own, including space leased by a tenant, does not comply with the ADA, who is responsible for bringing the building or space into compliance—the tenant(s) or me?

A Title III of the ADA contains the “barrier removal” requirement, which states that any person who owns, leases, or operates a “place of public accommodation” must remove architectural and communication barriers that are structural, where such removal is readily achievable.

The ADA defines “readily achievable” as “easily accomplishable and able to be carried out without much difficulty or expense.” The individual or entity responsible for compliance with the barrier removal requirement may be obligated to:

• Make curb cuts in sidewalks;

• Install ramps and widen doors;

• Add designated parking spaces;

• Install grab bars in bathroom stalls;

• Install faucets that are operable with one hand; and

• Install hands-free soap dispensers.

Your responsibilities as an owner in complying with the ADA vary based on the scope of work, if any, being done to the space, says New York attorney Jeffrey A. Moerdler. If you or a tenant is doing a substantial renovation, such as a complete initial build-out of a tenant's space, or doing a major renovation of a tenant's space, this will trigger a requirement to bring the space into compliance with the ADA.

For example, suppose a tenant is leasing a retail space that has a street-level entrance with several steps. If the tenant is only painting and carpeting in the space and not touching the steps, you probably won't have to build a ramp. If the tenant is doing a major renovation or altering the steps, a ramp will need to be installed. Both the tenant and you are responsible for complying with all ADA rules and regulations, says Moerdler.

The courts in most states will not allow owners or tenants to pass off their ADA compliance obligations through a lease, says Miami attorney Donald J. Hayden. But it's not uncommon for owners and tenants to allocate compliance responsibility in the lease. Generally, this means that the tenant will take responsibility for compliance within the premises (other than for alterations done by the owner), and the owner will take responsibility for the common areas of the building (unless the requirement to comply in the common areas was triggered by the tenant's use of its space).

When negotiating the ADA portion of a lease, give special attention the following provisions:

Representations and warranties. A typical commercial tenant will probably ask the owner to include a clause in the lease representing that the space the tenant will be leasing and any space associated with it is or will be ADA-compliant upon the tenant's taking possession of the premises. If the owner is doing any work in the space, this clause would include that work.

Requirement to comply with “all applicable laws.” This provision essentially means that the tenant must not violate the law while operating its business in the leased space. However, absent a specific provision in the lease addressing ADA compliance, owners will take the position that this provision requires the tenant to make changes to the premises for purposes of ADA compliance.

If the “compliance with laws” provision does not separately address structural alterations required to comply with laws, you can use this provision to require the tenant to make structural alterations to comply with the ADA.

Note, however, that a tenant may insist that the lease makes clear that you are responsible for improvements necessary to comply with ADA standards, at least as to the common areas of the building and any other space outside the premises, as well as any work you do in the premises.

Indemnification provisions. You might argue that the tenant is responsible for defending any lawsuits that arise from ADA violations and/or must reimburse you if the courts determine that you are responsible for compliance. This is known as indemnification—that is, holding the owner harmless for any damages due to violations.

In most states, however, the law does not allow owners to seek indemnification for damages and personal injury that they caused. Therefore, if you fail to comply with ADA regulations, and someone is injured and you get sued, the courts probably won't let you hide behind an indemnification provision.

Repair and maintenance provisions. In most leases, the tenant is responsible for repairing and maintaining its space—which requires it to bring any noncompliant areas up to the current standards.

Insider Sources

Donald J. Hayden, Esq.: Baker & McKenzie LLP; 1111 Brickell Ave., Ste. 1700; Miami, FL 33131; (305) 789-8966; donald.j.hayden@bakernet.com.

Jeffrey A. Moerdler, Esq.: Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, PC; 666 3rd Ave., New York, NY 10017; 212 692-6700; jamoerdler@mintz.com.