- She’s the only one who knows where the scotch tape is.
- Mostly to clean the house.
- To help us out of there when we were getting born.
~answers by elementary school children
Well, I can think of a lot more of my own (maybe not as cute though), but in a week we should all be thankful to that person who brought us into the world and raised us without the help of an instruction manual. I recently read that the U.S. fertility rate was 1.94, which translates to a long term population decline (it takes a 2.1 fertility rate to maintain our population). This is not good since low fertility populations don’t innovate as much since their consumption tilts towards health care and their capital shifts to preserving and extending life (partly why I see more health service uses moving into retail centers). Another recessionary trend is that more kids are living at home longer (back with mom & dad). Keep in mind that kids living at home don’t make babies. We will see a recession caused birthrate drop in the short term. The moral to the story is to pay attention to demographic trends if you are going to be a long term real estate investor.
Our San Diego economy is trying desperately to reverse these trends by logging a 7.7% unemployment rate – well below the 9.3% of last year. There were 8,300 jobs added between February and March of this year (32,600 for the 12 month period).
In January, I alluded to the fact that there have been some changes in the Americans with Disabilities Act (ADA) laws as they relates to building owners and leases. California Civil Code Section 1938 now reads:
1938. A commercial property owner or lessor shall state on every lease form or rental agreement executed on or after July 1, 2013, whether the property being leased or rented has undergone inspection by a Certified Access Specialist (CASp), and, if so, whether the property has or has not been determined to meet all applicable construction-related accessibility standards pursuant to Section 55.53.
In my January letter, I referenced the following article by a local ADA specialist attorney:
With July fast approaching it is critical that every property owner addresses this issue. I recommend that you contact a Certified Access Specialist and have an inspection done (some sources will be listed at the end of the letter). You should consult with your property manager or an architect. Furthermore, you will want to work with a contractor and/or paving contractor to get into compliance. If you use AIR lease forms through us, please know that we will be using the latest forms which have added the following language:
Accessibility: Americans with Disabilities Act.
(a) The Premises: have not undergone an inspection by a Certified Access
Specialist (CASp). have undergone an inspection by a Certified Access Specialist (CASp) and it was determined that the Premises met all applicable construction –related accessibility standards pursuant to California Civil Code 55.51 et seq. have undergone an inspection by a Certified Access Specialist (CASp) and it was determined that the Premises did not meet all applicable construction-related accessibility standards pursuant to California Civil Code 55.51 et seq.
(b) Since compliance with the Americans with Disabilities Act (ADA) is dependent
upon Lessee’s specific use of the Premises, Lessor makes no warranty or representation as to whether or not the Premises comply with ADA or any similar legislation. In the event that Lessee’s use of the Premises requires modifications or additions to the Premises in order to be in ADA compliance, Lessee agrees to make any such necessary modifications and/or additions at Lessee’s expense.
If you do not use the AIR forms please consult your attorney and have your lease revised accordingly (or direct us to add the above language to your lease form). Please also consider adding this language to your existing leases when you are negotiating lease extensions, rent reductions, or other terms with your existing tenants.
If you are a tenant, you should have the premises inspected (including common area compliance) before you sign a lease.
I am just forewarning all sides that it will be ugly after leases are signed and a city requires that the parking lot be upgraded because of the tenant’s interior improvement and both sides point to each other to pick up the tab.
Here are some resources to help you in dealing with this issue:
Greg Izor / Izor & Associates
Manda Wallbridge / Smart Design
Trevin Schall / Lahaina Architects
CGP Construction Services
George Weir Asphalt
Well, “Mama didn’t raise no fool” so it’s time to address the law (so it doesn’t address you) and to honor our mothers. Here’s to mothers…hope you enjoy the story.