Americans with Disabilities Act (ADA) - by Edward Smith Jr.

This column is offered to help educate agents new to commercial and investment brokerage and serve as a review of basics for existing practitioners.

As real estate agents and brokers we need to know the ADA laws that pertain to our business. We may also need to educate our clients and others about these regulations. The intention is to make buildings and other things accessible to people with disabilities.

The Americans with Disability Act is a Civil Rights Law, which is enforced by the US Department of Justice. It focuses on various forms of discrimination caused by outright intentional exclusion, architectural, transportation and communication barriers, and failure to make modifications to existing facilities. In this article we will look at some of these regulations.

ADA Title 1: Requires employers with fifteen (15) or more employees to provide qualified individuals with disabilities an equal opportunity to benefit from the full range of employment-related opportunities available to others; to do so these buildings must be ADA accessible.

You are listing a one-story office building for sale that is currently occupied by an architectural firm with eleven (11) employees, the layout includes nine (9) drafting tables that are each 10” long and two (2) desks for clerical assistants. The firm’s lease is ending. The building is not in ADA compliance; it is not required to be. Looking at the property you could find another architectural firm to buy it, but probably it will be bought by an office user, if the drafting tables were removed you would have the room for about twenty (20) desks.

You explain the law to the owner and suggest they make the building ADA accessible before you start marketing the space. The owner says no, I am selling the building “as is”. You tell the owner that unless you make it ADA compliant you will be losing a large portion of your “buying pool”. You end up listing the property as it is.

Another broker contacts you who is representing a buyer, you agree to co-broke. Their buyer is an office user with twenty-three (23) employees. Price is agreed and a contract is signed, subject to an engineer’s report and obtaining a bank mortgage, both of which are successfully accomplished. However, at closing, the buyer’s attorney tells the owner your building is required to be ADA accessible, and it is not. My client will still buy it, but you must reduce your price by $50,000 so we can make it ADA compliant.

Did the other broker, the engineer or bank appraiser know about the ADA regulations (they should have) and advise the buyer about them? Maybe they did, and the buyer is now using this issue to get a better deal.

Under Title II state and local governments are required to give people with disabilities an equal opportunity and to follow specific architectural standards in the new construction and alteration of their buildings. If you are hired by a municipality to find them additional space, do not bother to show them anything that is not ADA compliant, unless the current owner agrees to make it so as part of the deal.

“Public Accommodations” are any buildings that are open to the public and as such must be ADA accessible. Under this Title III section, public accommodation must remove architectural barriers and communication barriers that are structural in nature, in existing facilities, where such removal is readily achievable. The readily achievable standard does not require barrier removal that requires extensive reconstruction or burdensome expense.

The ADA requirements for new construction and alterations cover commercial facilities, which include nonresidential facilities, such as office buildings, factories and warehouses, whose operations effect commerce. This category sweeps under ADA coverage a large number of potential places of employment that are not covered as places of public accommodation.

ADA laws are designed to prohibit discrimination. “No individual shall be discriminated against on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages or of any accommodation in any place of public accommodation by any private entity who owns, leases (or leases to) or operates a place of public accommodation.” The landlord and the tenant are both responsible to see that the premises are ADA compliant.

The Americans with Disabilities Act now requires that all websites be accessible. The word “website” does not appear anywhere in the Americans with Disabilities Act. In fact, when the ADA was signed into law by then President George W. Bush on July 26, 1990, there was no internet and websites did not exist. However, the U.S. Courts have interpreted “Places of Public Accommodation” to also include the internet and specifically websites.

The goal is to make the content of websites usable for people with vision or hearing impairments and to those who have cognitive, learning, or other physical disabilities.

In 1999 Web Content Accessibility Guidelines (WCAG) were developed, expanded in 2008 and again in 2018. Currently WCAG has 38 requirements (many of a technical nature) required for website compliance.

Some things you need to do, provide alternative text (alt-text) for all images (description of what image is). Alt-text captions allow site readers to describe your images audibly. Ensure your site can be navigated using a keyboard alone. Not all users are able to interact with a touchscreen or grip a mouse.

Documents need to be in a text-based format at all times, even when you also offer a PDF. Complex image documents can’t be understood by software that reads text aloud for visually impaired website users. Use descriptive text for links, write links so that someone can tell what the linked page is about — not “click here” or “learn more” but “fact sheet 121 Main St. Anytown” or “Income and Expense Statement”.

The key is to make sure your website is accessible to everyone, including people with disabilities. You want a site that is easy to navigate with content that is clear and understandable.

Some modifications to make buildings ADA accessible are relatively inexpensive. Someone with arthritis could have difficulty turning a round doorknob, one could replace it with a handle to open the door, eliminating a potential problem. Designating handicap parking spaces. Widening doorways to allow wheelchair access. Insulating the hot
water pipes under a sink in the bathroom would prevent a person in a wheelchair from getting burned. Other items could be more expensive like installing access ramps or putting curb cuts from your parking lot into your sidewalk or putting in an elevator.

Under ADA an elevator would be required if the building is three or more stories, or if it were a two-story building with square footage of each floor more than 3,000 s/f. However, elevators are mandatory for shopping centers and shopping malls or a professional office of a health care provider.

If you are selling a property with a swimming pool be aware the ADA now requires lifts, to help disabled people get in and out of the pool.

When educating your clients whose buildings are not ADA compliant, stress the positive. They don’t have to “gut” their building and do everything at once, as long as they can demonstrate, if they are challenged, that they have been doing some ADA improvements each year. Also remind them that one in five Americans have disabilities, as do over half of people over age 65. People with disabilities have over $178 billion to spend.

A full tax deduction, up to $15,000 per year, is available to any business for expenses of removing qualified architectural or transportation barriers. Expenses covered include costs of removing barriers created by steps, narrow doors, inaccessible parking spaces, restroom facilities, and transportation vehicles.

A tax credit is available for small businesses with revenue under $1,000,000 the prior year or 30 or less full-time workers. This special tax credit is available to help smaller employers make accommodations required by the ADA. An eligible small business may take a tax credit of up to $5,000 per year for accommodations made to comply with the ADA. The credit is available for 50% of the cost of “eligible access expenditures” that are more than $250 but less than $10,250. The credit may not be used for new construction. It may only be used to adapt existing facilities to comply with ADA.

A small business may take both the tax deduction and tax credit each year. For example: $20,000 cost of access improvements (bathroom, ramp, widening doors) would be covered by the $5,000 maximum tax credit and a $15,000 tax deduction.

Penalties for ADA violations can result from private suits or suits by the Department of Justice. If one loses the suit they would be required to then make the property ADA accessible, pay all the court costs and be fined up to $50,000 for a first offense, $100,000 for any subsequent violation.

On their website (www.ADA.gov) they have a short publication you can print out, “ADA Primer for Small Business”, you may want to do so for clients with buildings that are not ADA compliant. It gives them a good idea of what they need to do.

Remember we know the law, our clients may not, be prepared to educate them.

Edward Smith Jr. CREI, ITI, CIC, GREEN. MICP, CNE, e-PRO and CIREC program developer, is a commercial and investment real estate instructor, author, licensed real estate broker, speaker, and a consultant to the trade.