Commercial Leasing

As a commercial landlord, it can be too easy to sign a lease for a longer term, and then just rely on the built-in rental increases as time passes. If a tenant has a 5-year lease with a 5-year option to extend, you may not even think about updating the lease for 10 years after it was signed.

During that 10-year span, many new laws and regulations will have become effective that could impact the tenancy, the property under lease and the lease itself.

For example, California Assembly Bill No. 2093, signed into law in September 2016, amended California Civil Code 1938 related to disability access. No doubt enacted in response to the preponderance of ADA lawsuits that have been filed in recent years, AB 2093 requires for all leases executed on or after January 1, 2017, language be added to the lease stating whether or not the premises have been inspected by a Certified Access Specialist (CASP).

If there has been an inspection, then the landlord is required to provide the tenant with a copy of the inspection certificate or report. The law further provides a presumption that the landlord is responsible for making any repairs or modifications needed to correct violations of construction-related access standards. However, this presumption can be modified by the parties in writing, and it should be handled in the lease.

If no inspection has been performed, the lease needs to state that upon the request of the tenant, the landlord may not prohibit a CASp inspection of the premises and that the parties must mutually agree on the arrangements for the inspection, including the cost of the inspection and making any needed repairs. In order to comply with this component of Civil Code section 1938, all new commercial leases should have the following language included:

“A Certified Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construction-related accessibility standards under state law. Although state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the premises.”

If you are entering into a commercial lease, or getting ready to renew or amend an existing lease, make sure that your lease complies with this law. If you want to avoid the presumption that the landlord pays for repairs, your lease would need to be modified to reflect any tenant obligations. A link to Civil Code section 1938 is provided below.

http://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=1938.&lawCode=CIV