Cost of compliance: as the Justice Department considers proposed changes to the Americans with Disabilities Act, real estate industry members voice concerns about potential cost and compliance

Journal of Property Management, March-April, 2006 by Darnell Little

As the Americans with Disabilities Act of 1990 reaches its 15th anniversary, the United States Justice Department is working on the first major overhaul of the act, which requires public facilities be built or altered to provide easier access for the physically disabled.

The act initially mandated owners of commercial buildings to design and develop restrooms, lobbies and public entrances and exits, among other things, with the physically disabled in mind. But proposed changes will affect everything from the width of entranceways and the height of support rails to the amount of wheelchair space required in assembly areas.

Although the Justice Department may not finalize the proposed changes for a few more years, property owners are already feeling their impact. Building owners embarking on new construction or renovation projects must decide if they want to apply the new standards now, before they are finalized, or use the existing rules until the proposed changes become law.

"[Property owners] have a legal obligation to observe the current standard," said Lois Thibault, coordinator of research for the Access Board, the federal agency responsible for drafting the updated Americans with Disabilities Act rules. "The new guidelines could be called a best practice, and one would encourage them to look to the future and perhaps begin implementing them now."

EMBRACE the future now

Many property managers have already taken Thibault's suggestion to heart and have begun implementing the proposed standards.

"I think if we're going to be spending the money today, the prudent thing to do would be anticipate these regulations will come into play and start making those adjustments," said Linda Aronson, vice president of property management services at Dallas-based Trammell Crow Company, AMO. "It's prudent to start budgeting for them so there are no surprises down the road."

Steven W. Nourse, an Americans with Disabilities Act consultant in Washington state, said he advises his clients to address the new proposals now instead of waiting for finalization. A proactive approach will serve them better in the end, he said.

"If you only build to the existing code, it seems to me you're always running behind," Nourse said. "You're always going to be chasing something; you're always going to be remodeling something. It seems to me that the proactive way of doing it is [to] build to a little stricter design. Build to a more accessible design, and I think you're going to have [fewer] problems down the road."

However, updating existing design and construction projects is not easy. Many real estate industry members are concerned about how much time the Justice Department will allow to revise development plans and implement the proposed changes once they are finalized.

The Justice Department is currently proposing the possible changes be made within 18 months of officially being adopted. But to many industry leaders, 18 months is not a reasonable time period, said Chuck Achilles, vice president of legislation and research for the Institute of Real Estate Management.

He said a 24- to 36-month adoption period is much more reasonable considering lengthy permit processes, construction costs and other factors going into designing new buildings or revamping old ones.

"The Department of Justice needs to be cognizant there is a time period when adapting properties [to these standards]," Achilles said. "It's very costly and not something you can do easily. This isn't sewing buttons on a shirt. Twenty-four to 36 months is more realistic."

Existing buildings face CHANGE

In addition to potential tight deadlines, property managers and owners must consider cost. The Access Board estimates the proposed regulations will add $26.7 million a year to the cost of new construction. Whether the new regulations will apply only to new construction or whether they will one day apply to all existing buildings is a consideration still before the Justice Department.

Kurt Padavano, chief operating officer of New Jersey-based Advance Realty Management, is one of many industry members calling for the government department to exempt existing buildings from any new standards until those buildings undergo major alterations or renovations.

"This is a huge issue for the industry in terms of cost and in terms of implementation and compliance," he said. "There needs to be a grandfathering or a safe harbor exception for all of the buildings [for which owners] have taken the steps to comply with the current act's rulings. They have invested the time and invested the money to go through the process of surveying their buildings, developing a plan and implementing changes to the access and features of the building under the old rules, so they shouldn't now have to re-spend that time and money to bring them to some new standard."

Property owners are concerned about retroactivity and the scope of the proposed changes when it comes to buying existing housing right now, said Mike Beirne, executive vice president of New Jersey-based management and investment firm, the Kamson Corporation.