At the Arnall Golden Gregory breakfast briefing “Hot Topics for Commercial Property Owners and Managers,” a panel of AGG attorneys discussed Americans with Disabilities Act (ADA) litigation, arbitrating a lease audit, and lease issues for luxury retailers.

Partner Knox Withers said plaintiffs’ lawyers drive by properties looking for ADA violations, then send demand letters to landlords and property owners.  An audience member said his business received a $9,500 settlement offer from a lawyer who identified ADA violations at a 50-year-old property.

These types of “shakedowns” to avoid lengthy ADA litigation are an emerging issue in commercial real estate.  Mr. Withers advised that landlords make sure they have in place policies and procedures that require ADA-compliant accessibility.  That accessibility covers not only entrances and bathrooms, but even point-of-sale terminals.

Partner Rick Mitchell said ADA shakedowns are extending to websites with brick-and-mortar stores.  If a site includes videos, does it also have closed captioning for the hearing impaired?  Website designers need to be aware of Web Content Accessibility Guidelines (WCAG), Mr. Mitchell said.

On another issue, partner David Marmins described arbitration of lease audits, and focused on a matter he is handling involving a class A Atlanta office building where a tenant purchased an audit that identified alleged overcharges. 

The dispute involves capital expenditures vs. repair costs that can be passed through to tenants, parking deck operating expenses, and grossed up real estate taxes.

Mr. Marmins said arbitration can be slightly cheaper than conventional litigation, but because the process is condensed, monthly charges can be high. 

The benefits of arbitration are an arbitrator will be more responsive than a judge because of a much smaller caseload, an arbitrator is more knowledgeable about the law than a jury, and the right to appeal a decision is severely limited.

Associate Jenna Cooley discussed specialty issues that arise when preparing a lease for a luxury retailer.  Parking, for example, might focus on the number of reserved spaces allotted to the store, or control of the valet service, or providing dedicated spaces for electric vehicles (only Teslas allowed?).

Ms. Cooley said properly writing co-tenancy provisions in a lease is vitally important in case a retail center underperforms and the luxury retailer wants a rent reduction.

What if the luxury retailer fails to open on time?  Does the lease provide for a penalty? Partner Russ Arouh pointed out that lease negotiations over various possible scenarios are really about establishing who has leverage.

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Arnall Golden Gregory was selected to The National Law Journal's prestigious “Midsize Hot List” because of its success in helping aspiring businesses resolve pressing issues related to regulation, litigation, globalization, privacy and growth in real estate and other industries.  With 160 attorneys in Atlanta and Washington, DC, AGG provides exceptional partner relationships, deep industry knowledge, flexible service, and value to help clients grow and protect their businesses and achieve their definition of success.