By Jones Osborn II

Anyone purchasing or leasing a commercial building--or even lending money on one--should consider the Americans With Disabilities Act (the "ADA"). This is a federal law enacted in 1990 which can require substantial and expensive changes to buildings and other structures. In general, this law requires such things as wheelchair-accessible entryways, passages and bathrooms, elevators in certain circumstances, Braille signage, lowered telephone and drinking fountains, and so on.

Types of Property. The ADA classifies property as one of three types: (1) places of public accommodation, (2) commercial facilities, and (3) residential dwellings.

Places of public accommodation include such things as hotels and motels, restaurants, bars, movie theaters, shopping centers, schools, and other places where the public gathers. These uses require the highest level of accommodation for those with disabilities. A plan must be adopted by the owner to bring the building into compliance with the ADA over a period of time, regardless of whether other renovations are planned for the building.

Commercial facilities include all privately-owned places of business to which the public is "invited." An example might be the front office of a manufacturing facility. These normally have less stringent compliance requirements until the building is renovated, at which time the requirements become much more burdensome.

Residential dwellings are homes, apartments and condominiums. Normally, these are not subject to the ADA. However, if someone has a home office which is open to customers or other members of the public, the ADA applies. The same is true of rental and sales offices in an apartment or condominium complex.

Compliance. Buildings constructed since 1991 are generally in compliance with the ADA. However, buildings constructed before then may not be in compliance. If that is the case, and if the building is a commercial facility, the law generally requires the building to be brought into compliance if compliance is "readily achievable." Obviously, this is a vague standard and it is not clear how much expense and disruption the owner or lessee must incur to comply with the ADA. However, it is generally thought that the owner is not required to incur disproportionate expense to bring the building into compliance.

When the building is altered or renovated, however, the burden becomes much greater. In this case, the building must be brought into compliance "to the maximum extent feasible." This means that cost is largely irrelevant. Fairly minor alterations or renovations can trigger very expensive compliance requirements. Therefore, be careful when doing work on a building which is not in compliance--or you may end up doing a lot more work than anticipated.

Elevators can be required in multi-story buildings unless the building (a) is less than three stories and (b) has less than 3,000 feet per story. This exception is not available to medical offices or shopping malls. Therefore, if you are purchasing a multi-story building without an elevator, be very sure you understand the ADA requirements. Elevators can be very expensive to retrofit.

Responsibility. Generally, a landlord is responsible for the public areas of the building, such as sidewalks, parking garages, entryways and lobbies, and the tenant is responsible for its own space. However, this can be changed by agreement of the parties. If you're leasing improved space into which the public may be invited, whether an office, a store, or other facilities, be sure to either check the space for compliance or have the landlord assume full responsibility for any ADA compliance requirements.

When lending money on older buildings, lenders should conduct a compliance survey, since they may end up owning the building in the event of foreclosure. In that event, they could become responsible for ADA compliance.

Enforcement. The ADA may be enforced either by a private suit or by the Justice Department. In a compliance action, the court may enjoin construction that does not comply, or may order the property to be brought into compliance. In addition, in a suit brought by the Justice Department it may seek damages of up to $50,000 for the first violation and up to $100,000 for each succeeding violation.

Conclusion. When purchasing, leasing, or lending money on improved non-residential real estate, particularly if constructed before 1991, consider having an ADA compliance survey performed. These are usually not expensive and can save considerable money down the road. And before remodeling or altering a building--even in a minor way--determine whether you will trigger a duty to bring your building into compliance and if so, the cost.