Legal Updates & Alerts

Important Changes Affecting Commercial Real Estate in California

March 21, 2013
Commercial owners and tenants in California should be aware of new requirements with respect to disability access and energy use that take effect in 2013.

Disability Access
Under existing California law, landowners may voluntarily obtain inspections of property for compliance with state and federal disability access requirements from a third-party "Certified Access Specialist." Depending on its contents, the inspection report may provide protection against future lawsuits alleging access violations. Beginning July 1, 2013, all new commercial leases across the state must disclose whether or not the leased premises are the subject of such a report, and if they are, the lease must disclose the results of the inspection. The new law does not require that the inspections be performed.

Additionally, starting January 1, 2013, a San Francisco city ordinance requires that upon execution of a new lease or an amendment of an existing lease for commercial premises between 5,001 and 7,500 square feet in San Francisco, either the premises must meet disability access standards for public restrooms and ground floor exits and entrances, or the lease must disclose non-compliance to the tenant. The law extends to premises of 5,000 square feet or less starting June 1, 2013. The rules apply only to premises used for "public accommodation," but this term is very broadly defined and can include general office uses.

The San Francisco ordinance also requires both tenant and landlord to sign a form "Disability Access Obligations Notice," and the landlord must provide the tenant with a pre-printed "Access Information Notice" pamphlet. Furthermore, the lease or amendment must expressly allocate between the landlord and tenant who will be responsible for making any alterations to the property necessary to meet disability access requirements, and must require each party to notify the other if it makes alterations that might impact disability access.

Energy Use
Since 2009, California electric and gas utilities have been obligated to maintain energy consumption data on non-residential buildings that they serve, and to report this data to the federal EPA. Starting July 1, 2013, any landowner seeking to sell, lease or finance a non-residential property in California of 50,000 square feet or more must disclose the property's EPA energy use data for the prior 12 months to the potential buyer, tenant or lender. Similar disclosure requirements for smaller properties will take effect in 2014.

Tonkon Torp's real estate lawyers represent many landowners and tenants with respect to California real property. If you have any questions about these new requirements or any other aspect of California real property law, please contact a member of our practice group so we can put you in touch with one of our California-licensed attorneys.